Ken Johnson, a finance professor and real-estate chair at the University of Mississippi, recalled the pre-digital era, when he used to sell real estate. Home buyers back then were more reliant on brokers to give them information on past sales, which was “very hard,” he told MarketWatch, “because they legally represented sellers.” Now, it’s easy to look up a home’s sales history on one of the portals.
Cutting off a home buyer’s access to a significant share of listings by requiring them to work with a specific company is a big step back for the average buyer, Leo Pareja, chief executive of eXp Realty (EXPI), told MarketWatch. Along with Compass, the company is one of the largest residential real-estate brokerages in the U.S.
“Imagine a world where 40% of the [housing] inventory is controlled by one company. If you’re a buyer and you want access to those properties, you don’t actually have a choice about who you get to work with,” Pareja, who is also a licensed real-estate agent, told MarketWatch.
Pareja said that to him, Compass seems to be motivated by “pure and utter greed.” He added, “If I were being a pure capitalist, I would be on his side … but just because something makes more money doesn’t mean we should do it.”
Compass pushed back on those assertions. Reffkin said that the majority of homes that start out as private, premarketed listings eventually are sold alongside homes represented by non-Compass agents. He also said that Compass shares all of its premarketed listings with the entire brokerage community.
“Unfortunately, there is a persistent false narrative suggesting the motivation behind Compass Private Exclusives is to double-end deals, which couldn’t be further from the truth,” Reffkin added.
Private listings are not new, but they’re gaining cachet
To be sure, homeowners have had the option to sell their homes privately for decades. But making the practice more commonplace may be more of a bane than a boon for sellers.
In one analysis that looked at 100,000 home sales over six months in six states and Washington, D.C., sellers who went the premarket, private route saw “no benefits” compared with those who sold a home the typical way publicly, according to Bright MLS, one of the platforms that displays home listings.
Private listings take longer to sell and offer ‘no price advantages’ as compared to promoting a home that is for sale on public platforms.Bright MLS, which handles listings across the mid-Atlantic region
Private listings take longer to sell and “offer no price advantages” compared with listings that go on the MLS and are then promoted to the public, the company said.
“An increase of office exclusive listings has the potential to harm prospective buyers and sellers by limiting access to information and creating a fragmented inventory system,” they added.
Buyers could be shut out of the housing market
Already, some home buyers and their brokers say they have felt the sting of these private listings.
New York City-based real-estate agent David Bibian works with buyers to find properties in the trendy West Village part of Manhattan. He saw firsthand how his buyers were shut out of seeing certain units that were up for sale, because they were only accessible to buyers who had signed a contract with a Compass agent.
Looking through home listings via the local multiple listing service, “I couldn’t find it on my system,” Bibian, who works with Brown Harris Stevens, told MarketWatch. The buyer ended up signing a separate buyer’s agent contract with the Compass agent, because Bibian did not want them to miss out on the property if they liked it.
“I told the client that I want what’s best for them, so that they can see everything on the market,” Bibian said. “I told him to sign, and then we’ll figure out my part of the commission.”
The buyer did not end up buying the home. But the entire experience left the buyer with a bad taste, Bibian said, because it required the buyer to work with multiple brokers and juggle multiple contracts. A few weeks later, the property showed up on the city’s multiple listing service and on Zillow.
Selling your house? How to decide if you want to go off market versus going public
Should a homeowner who is thinking of selling their property put it on the market for all the world to see? Or should they sell privately?
To be sure, “there are times when there is a need for it,” Jeff Jackson, a real-estate broker aowner of Corcoran Centric Realty, told MarketWatch.
“But what’s kind of been happening is that homes that don’t really have a reason to be off market are being offered privately,” he said, and “that percentage has been growing a lot.”
Here are three questions homeowners who are selling should ask themselves before they decide if they want to go off market, or go public.
Do I want to make the biggest profit?
Jackson said that homeowners who are seeking the top price for their property should go to the public market as soon as possible. Generally speaking, with wider marketing of the home for sale, the owner looking to sell can expect more offers.
Do I want people to know I’m selling my house?
Jackson and Pareja said that homeowners who have a strong reason to be confidential about the sale of their home should consider the private listing route.
Some homeowners who are company leaders – such as chief executives, for instance – may not want their firm to misread the sale of their home as an indication of financial distress, Jackson said. Or a seller who is a celebrity may not want people to know where they live while they’re trying to sell the property.
Pareja also said that homeowners in sensitive roles, such as people in law enforcement who work on criminal cases, also sometimes choose to sell their homes off market for safety reasons. “They want to make sure that their address ends up nowhere,” he said.
Do I want my renters to be disturbed?
Pareja also said that if the owner is selling a rental property, they might consider the off-market route if they want to be sensitive to their current tenants who still have an ongoing lease.
Prospective buyers typically want to view a property before they decide to purchase. But whether they can get access to the home depends on local MLS rules, Pareja said. Some properties may have restrictions or requirements that showings be scheduled in advance.
But in some cases, if a home is for sale, the tenants might end up dealing with people who see the home listing and show up unannounced at their doorstep. In such situations, if the owner believes that the tenant could be disturbed, they could opt to sell the home off market to reduce the potential for disruption.
-Aarthi Swaminathan
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05-04-25 0600ET
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