Private listings can impact an agent’s bottom line. But make no mistake, the topic is a controversial one, especially in these times when attorneys have no shortage of real estate lawsuits to represent one side or the other.
“The recent commission lawsuits and updates to the Clear Cooperation Policy have only reinforced the importance of transparency and open-market exposure,” notes Libby McKinney Tritschler, with Team ASA at William Raveis in Southport, Connecticut. “While private exclusives are still technically an option, we’re advising clients more carefully, making sure they understand the trade-offs involved.
“The general stance here, and certainly among many of my colleagues, has become more cautious when it comes to private exclusives.”
Pre-marketing properties is logical in certain circumstances, many agents agree.
“My broker encourages maximum exposure for listings, but there are some exceptions, like if there’s a hospice in the home situation or for the security of a well-known person or elderly owner living alone,” says Pam Rosser Thistle, with Berkshire Hathaway HomeServices Fox & Roach, REALTORS® in Philadelphia. “I will insert my opinion here. I believe private exclusives as a general practice are an example of systemic racism. They exclude underserved groups from the home-buying process in an already challenging environment.
“I would be curious to see the demographic statistics of buyers of private exclusives versus open market sales. Post-commission settlement, there are more options, which is helpful to sellers, notably giving them time to prepare the home for sale. But the option to ‘restrict marketing only to my broker’s network,’ I am hearing from sellers when I am invited to listing meetings that they do not want this. In most cases, it is detrimental to the seller (less exposure) and advantageous to the listing broker, which is a breach of an agent’s fiduciary responsibility.”
Compass strategizes exclusives
One company that openly embraces private listings as a major aspect of its business is Compass. While properties are not all formally exclusives throughout the selling process, they start that way as a strategy to produce the best price.
“There is a cohesive, interwoven tapestry in support of the Compass Private Exclusives,” says Suzy Minken, an agent with Compass in Short Hills, New Jersey. “It’s an integral part of our business. On our Compass app it will show us how many Private Exclusives and Compass Coming Soons are in the area. And we have a weekly social media post that shows the current count of properties that are Private Exclusives and Coming Soons. It permeates everything we do.”
There are other benefits for Compass and any other company that can successfully handle a property as a private listing all the way to closing. For one, it enables the brokerage to bank the commission from both the buyer and seller (though Compass has claimed the proportion of these double-ended deals is not “financially meaningful” to a company its size). And if they accumulate enough private listings, they attract buyers, as those homes aren’t listed anywhere else. The many “us-only” homes can theoretically make the company attractive to agents at other brokerages.
All that has not come without issues. Compass faced scrutiny over its private listings policy, going so far as to initiate legal action when an MLS barred its listings. The company has also made efforts to show it is still cooperating with other companies, allowing rivals to access its listings under certain conditions.
Compass introduced its 3-Phased Marketing Strategy last November. It gives a seller the option to extend the marketing runway of their home before going directly onto the MLS. In Phase 1, the home is listed as a Private Exclusive and is marketed to all Compass agents and their clients.
“The advantage to sellers is to get feedback about the home’s appeal and the list price without accumulating days on market (DOM) and any public display of price drops in the event the list price needs to be fine-tuned,” says Minken.
In Phase 2, the home goes on the Compass website as a Coming Soon listing, visible to all consumers and agents, while still maintaining the advantage of not showing DOM, price drops or other negative insights. Phase 3 is when the home is fully launched on the MLS and other internet sites.
“That’s when the seller has enjoyed the benefits of essentially a built-in focus group, and much like a great movie trailer, the property will have generated a level of excitement,” says Minken, claiming that when NAR adopted its new MLS policy giving sellers additional listing flexibility, and Zillow announced that it would ban any publicly marketed listings that weren’t on the MLS within 24 hours, Compass agents were well ahead of these shifts, helping clients navigate an evolving market with clarity and confidence.
At the same time, in its lawsuit against Zillow, Compass claimed that the new Zillow rules caused significant disruption to its business.
Jeffrey Decatur, a longtime broker associate with REMAX Capital in upstate New York, understands the ins and outs of private listings but favors immediate posting of homes for sale to the MLS except in rare circumstances.
“Unless someone has a security concern for why they would like their listing withheld, I believe in the power of numbers in the MLS and believe that a seller should have maximum exposure, and be listed on the MLS,” he says. “I also believe that the seller should have the option to list said property and hold off showings for a number of days of their choosing. It can be beneficial in a seller’s market to list a property and start showings several days later. It gives everyone involved some time to prepare.
“Buyers can get their schedule and financing in order and sellers have a few days of back-to-back showings and time to prepare, instead of the hurried drop everything and have showings because something just hit the market and won’t be available in 48 hours.”
Decatur will explain the benefits of the MLS to a seller and finds they usually rethink a private listing if they were considering it.
“If a seller wants to maximize dollars in the shortest time possible, then (maximum) exposure is crucial,” he says. “If they have a security concern or business reason not to publish their listing, I make sure to manage expectations and tell them the pros and cons again and again so there is no confusion.”
Both Tritschler and Minken cite specific examples of how a private listing can benefit the seller.
“If I’m working with a seller at a luxury price point, and I know the specific buyers currently searching in that range, I can leverage my network and reach out directly to them,” says Tritschler. “That can make a private exclusive feel seamless. But we have to weigh whether that really serves the seller’s best interest. At the company level, we receive clear guidance on the rules, compliance issues and how to position private listings properly. Still, it’s ultimately up to the agent and the seller to make a strategic decision.”
Minken explained how a private listing was perfect for a specific seller.
“One of my clients recently embraced the idea of a Private Exclusive for the sale of their home because they wanted to test an aspirational price,” she says. “The market began to shift toward a more healthy balance, so it was important to get feedback from buyers about the price and the home. We subsequently took a price reduction prior to going live on the MLS to reflect the buyers’ concern about the home’s location on a double yellow-lined road. And it didn’t take long before we had an offer accepted.
“It’s really about creating a tailored plan for each seller, one that puts their priorities first and helps maximize the value of their home. The real estate industry is evolving, and today’s homeowners aren’t looking for a ‘one-size-fits-all’ approach. They want flexibility, control and a strategy that works for their unique situation.”
