The Threat to Homebuyers and Housing: Private Listing Networks

A fair housing market starts with equal access to listings. All homebuyers deserve the same listings and the same information.

Buying a home in Greater Boston is difficult enough.

Buyers also should not have to wonder whether some homes for sale are invisible to them because they chose the wrong real estate brokerage.

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That is the troubling possibility raised by private listing networks, sometimes called pocket listings or office exclusives. These schemes restrict access to some homes and, in some cases, to the information buyers need to judge what those homes are worth. The result is not innovation. It is a retreat from transparency and fairness in a real estate market where consumers can least afford it.

United States Senator Elizabeth Warren of Massachusetts put the danger plainly in an Aug. 6 letter to the leaders of Compass and Midwest Real Estate Data, or MRED. Her inquiry focused on their partnership, but the concerns she raised extend far beyond those two companies. Private listing networks, she wrote, threaten to create a “two-tiered housing market where insiders pay for exclusive access to housing inventory and market data, while everyone else is shut out.”

She is right.

A healthy real estate market depends on broad access to listings. A homebuyer should not need a relationship with a particular brokerage, membership in a private network, or some other inside connection to learn that a home is available.

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The damage does not end with hidden inventory. Private listings can also obscure information buyers routinely use to understand value and negotiate price. Warren specifically identified days on the market and price-change history. Status history matters, too.

Knowing that a home has sat unsold for weeks, returned to the market after going under agreement, or had its price cut can fundamentally change how a homebuyer and their buyer agent evaluate the seller’s asking price and structure an offer. Fragmented listing information can leave consumers without precisely this kind of context.

These are not trivial data points tucked away for real estate professionals. They are bargaining information necessary for a fair and competitive real estate market.

A buyer who knows a property has been on the market for 60 days and has already had two price reductions may negotiate very differently from a buyer who sees only today’s asking price. Remove the history, and the seller has more information than the buyer. Remove some listings altogether, and the buyer cannot make a meaningful comparison or an educated offer.

That information imbalance undermines competition. Warren’s letter warns that buyers confronted with fewer housing options and incomplete data lose bargaining and buying power. She also notes that complete housing data matters beyond the negotiation table because information such as days on market and price history helps inform appraisals and other parts of the mortgage process.

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The consequences can also reach sellers. Warren cited research finding that Massachusetts homes sold outside the MLS brought sellers, on average, $20,171 less than comparable MLS-listed homes, a 3.4 percent difference. Whatever promise of privacy, market testing, or convenience a private sale may offer an individual seller, the obvious reality is difficult to dispute: Maximum exposure is ordinarily a powerful tool for discovering what prospective homebuyers are willing to pay.

Then there is an even more troubling problem: dual agency and same-brokerage transactions.

Private networks can give a listing brokerage greater control over who sees a property and when. Warren warns that this structure can encourage transactions in which the same brokerage represents both sides. The conflict is obvious.

A seller generally wants the highest possible price and the strongest possible terms. A homebuyer generally wants the opposite. A company collecting compensation from both sides has a financial interest in keeping the entire transaction under one roof. Warren’s letter says such arrangements can reduce negotiating power for both consumers while incentivizing increasing brokerage revenue.

Consumers should never have to trade independent, loyal representation for access to housing inventory.

And the combination of private listings and conflicted representation raises another question that cannot be dismissed as an industry dispute: fair housing.

The Fair Housing Act bars discrimination in housing transactions based on protected characteristics including race, color, religion, national origin, sex, familial status and disability. Massachusetts law includes additional protected classes, such as sexual orientation, veteran or active military status, marital status, age, gender identity and expression, source of income, ancestry, and genetic information.

Fair Housing protections extend well beyond the refusal to sell. Housing discrimination can include steering and false information about whether housing is available.

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Warren warns that the nonpublic nature of private listings can make discriminatory practices harder to detect and could contribute to residential steering. If information about available homes is distributed through closed networks rather than broadly shared, it becomes harder for consumers, regulators, and fair housing advocates to know whether everyone is being offered the same opportunities.

That does not mean every private listing or dual-agency transaction is a fair housing violation. It means opacity creates conditions in which unequal treatment is harder to see, document, and challenge. A housing market committed to fair access should move in the opposite direction, toward more visibility, more consistent information, and fewer gatekeepers.

This should matter especially in Greater Boston, where buying a home already requires consumers to make enormous financial decisions under intense pressure. Buyers need more information, not less. They need to know what homes are actually available. They need reliable listing histories. They need meaningful comparable sales data. And they need representation whose loyalty is not compromised by an interest in the other side of the transaction.

The real estate industry sometimes presents private marketing as a question of seller choice. Sellers certainly have legitimate interests in how their homes are marketed. But one person’s marketing preference should not become the foundation for a housing system in which access increasingly depends on which company represents you.

A larger principle is at stake. Real estate listing information is the infrastructure of competition. When that information is broadly shared, homebuyers can compare properties, agents can compete, sellers can reach more potential purchasers, and consumers can make decisions with a clearer understanding of the market. When listings and their histories are fragmented behind private walls, the people who control those walls gain power while consumers lose it. In other words, private listing networks and similar schemes are anti-consumer.

Homeownership is already out of reach for too many people. We should not make the path narrower by building an insider market alongside the public one.

Senator Warren is right to demand answers. The better answer for the housing market, however, is straightforward: Homes offered for sale should be broadly visible, essential listing information should remain transparent, and homebuyers should not have to surrender independent representation to gain access.

A fair market does not require the right connections. It requires a fair chance.

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