Real Estate News
Critics say a new marketing strategy that keeps listings in-house will hurt some home sellers.
When a real estate brokerage comes up with a new marketing plan, it usually doesn’t make the news. But Compass Real Estate’s new three-phase marketing approach has agents talking nationwide and critics calling it a money grab.
The first phase of the marketing plan is the most provocative. According to a Compass spokesperson, agents are encouraged to suggest to their sellers that their property be listed on an online portal visible only to Compass agents — who can show the property to their clients — instead of the Multiple Listing Service, which can be accessed by all realtors and the public.
According to its website, Compass has 1,187 agents in Massachusetts. It had the second-largest sales volume in the state ($7,209,393,457) in 2024, according to the Boston Business Journal.
A Compass spokesperson said these private, exclusive listings are meant to give the listing agent time to test the price, gain critical pricing insights from other agents, and generate early demand. The house can be sold during this phase, ensuring the commission remains in-house or is just shared with agents from an outside brokerage who are co-listed on the deal.
In Greater Boston, the median sales price of a single-family home is around $950,000, according to the Greater Boston Association of Realtors. Agents’ commissions aren’t public, but the usual charge is 5 percent to sell a home, which they generally split with the agent whose client bought the home. If the agent who lists the property also sells it — or if another agent from the same brokerage sells it — then the entire $47,500 commission is shared with the same brokerage. This sometimes happens naturally, but critics say keeping listings private is an effort to hog the whole commission and it’s certainly not in the seller’s best interest.
Real estate attorney Robert L. Bell, of Bell and Izzi in Melrose, said coaching sellers to keep their listings private — even for a short period — is at least an insult and possibly a violation of an agent’s fiduciary duty to their clients.
“Agents have a responsibility to act in the interest of their customers, and the whole profession is rife with compromises of that principle,” he said. “[Compass executives] know they can get both sides of more deals if they start doing more private listings. That’s what pocket listings, dark listings, private exclusives, and ‘coming soon’ is all about: Getting both sides of the deal.”
A Compass spokesperson responded in an email, “In 2024, 94 percent of homes pre-marketed as Compass Private Exclusives or Compass Coming Soon ended up on an Multiple List Service, showing that price discovery is the key consumer benefit and that most pre-marketed homes are still widely marketed. The end goal of Compass 3-Phased Marketing, if the homeowner chooses, is to go live on the MLS and third-party internet portal sites.”
But two major real estate portals, Zillow and Redfin, have come out against this practice and said they will not advertise any property that has been privately marketed, even after it’s listed on the MLS. Other online listing services, including eXp Realty and Nexthome, soon followed.
In a statement, Zillow said sellers whose homes were privately listed in the last two years lost out on more than $1 billion, and home sellers of color were affected disproportionately.
“These off-market listings not only harm sellers, but they limit exposure to potential buyers, possibly deepening inequities that have long existed in real estate,” said Orphe Divounguy, a Zillow senior economist. “We must maintain transparency in the housing market so we don’t go back to the dark ages of real estate.”
A Compass spokesperson said he questioned the value of Zillow for some home sellers. He said Zillow listings include information that can influence buyers to make lower offers, like listing the number of days on the market, a history of price changes, and factors like walkability scores, climate risk estimates, and Zillow’s estimate of a home’s value, which can be below the list price.
Compass chief executive Robert Reffkin wrote in a statement, “Zillow is abusing its market power and effectively telling homeowners, ‘We know what’s best for you, and if you disagree, we will ban you and your agent.’”
In the second phase of the Compass plan, the home is showcased to all agents and all consumers on the Compass website, without the risk of exposure from the MLS and portal sites where days on market and price drops are publicly displayed.
The third phase is when the property is listed on the MLS. Usually, those homes are also fed into portal sites like Zillow and Redfin, but homes previously marketed privately may be excluded from those sites going forward.
MLSPIN, which is the predominant MLS in Massachusetts, requires every agent who takes an off-market listing to submit and sign a form that reads in part, “The decision not to list the Property with the MLS is solely the decision of the Owner(s)/Seller(s), initiated by the Owner(s)/Seller(s).”
“If a non-MLS form has been signed by the seller, then the listing is in compliance with MLS PIN rules. It is the seller’s choice,” Melissa Lindberg, chief strategy and partnership officer at MLS PIN.
Even ardent critics of Compass’s new initiative concede that listing a property off-market does make sense for a very small percentage of buyers. Celebrities or people with valuable art on their walls might not want nosy strangers traipsing through their homes. Landlords sometimes don’t want their tenants to know when their building is on the market. Stalking or domestic violence survivors may not want a public sale.
While some off-market listings are understandable, recommending the practice can raise issues of fair housing. If only a small subset of people are able to see a listing, what groups are being excluded and why?
Zillow’s chief industry development officer, Errol Samuelson, said in a statement, ”When all buyers don’t have the same access to home listings — and are forced to navigate barriers, possible bias and incomplete inventory — it undermines consumer trust and weakens the market.”
Meanwhile, Compass created a special book of off-market listings that it calls Private Exclusives. The books are updated weekly and are available to Compass agents, or agents from other brokerages who can view them if they physically go into a Compass office. Rory Golod, Compass VP of Growth and Communications, said outside agents have come into the group’s offices to see the books, and they’re made available this way because of NAR rules.
Gibson Sotheby’s International Realty chief executive Colleen Barry said sellers are generally happy when their homes sell quickly, but those who sell off-market can never know how much more money their home would have fetched if it were listed on the open market.
“As we all know from a free market economy, the best way to get the highest and best offer is to put it out to the greatest number of people,” she said. “Because we just don’t know where that most qualified buyer is going to come from, particularly in a marketplace like ours, which is truly international.”
Barry cited a Bright MLS study of 442,829 comparable home sales in the Washington, D.C., Philadelphia, and Baltimore markets over two years. That study showed the median sale prices for homes marketed through the MLS were 16.98 percent higher overall. She said that’s a lot of money those sellers unknowingly left on the table.
“There are very few circumstances where I can imagine a seller saying ‘That doesn’t matter to me.’ That’s my greatest fear,” she said. “If people aren’t being told the true nature of the risks that they’re taking on by not putting their home on the open market. Are they making the best decisions for themselves and their families?”
In a white paper addressing the issue of private listings, Douglas R. Miller, the executive director of Consumer Advocates for American Real Estate, said: “Zillow’s stance reflects a growing awareness that the traditional brokerage model too often prioritizes internal deal flow over client outcomes. When inventory is withheld for the benefit of internal agents or affiliate relationships, the consumer loses.”
Correction: This story was updated to reflect which organizations have access to Compass’s Private Exclusives.
Clarification: This story has been updated to reflect that MLS says listings are in compliance with its rules if the seller has signed a non-MLS form.
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