How Do Private Listings Affect Home Buyers and Sellers?

In the world of real estate, there is a heated debate surrounding whether home sellers and their agents should be allowed to market listings privately or if they should be required to make listings viewable on all platforms right away. This controversy has pitted Compass, the largest U.S. brokerage, against Zillow, the largest online real estate marketplace.

The National Association of Realtors (NAR) implemented the clear cooperation policy in 2020, which mandates that brokers must put homes on the MLS within a business day of publicly marketing their listing. However, in March, the NAR introduced the “Multiple Listing Options for Sellers” policy, which allows sellers to withhold their listing from the MLS for a period of time. Each local MLS system has until September to determine the specific timeline for this delayed marketing option.

The introduction of this new policy has sparked mixed reactions from brokerages and listing sites. Zillow, in particular, has taken a firm stance against private listings, arguing that they do not benefit buyers and can potentially result in sellers losing money. Zillow has implemented a policy where homes initially marketed privately in violation of their guidelines cannot later be listed on the platform.

On the other hand, some argue that private listings offer sellers a level of privacy and control over their property. Clelia Warburg Peters, managing partner at Era Ventures, points out that private listings can help sellers test the market without accruing days on market, ultimately leading to a more optimal sale price.

While private listings may offer benefits to sellers, the general consensus is that transparency in the market is essential for buyers. Zillow’s strong response to the trend of private listings indicates a push towards greater transparency in the real estate market.

Overall, the debate between private listings and immediate MLS exposure continues to unfold in the real estate industry. As Zillow and other major players take a stand against private listings, sellers and agents will need to navigate the evolving landscape of real estate marketing strategies.