Homebuyers Say Secret Listings Benefit Brokers, Fueling Frustration

Homebuyers are expressing growing unease with the practice of "pocket listings," or private property sales that bypass public real estate platforms, believing the system disproportionately benefits real estate agents. A recent Zillow report reveals that 72% of buyers suspect that homes sold privately without broad marketing primarily serve the interests of agents.

Furthermore, approximately 40% of potential buyers stated they would feel deceived if a property meeting their needs was sold without their knowledge. This sentiment underscores a broader industry debate about access to properties and the transparency of the market. While private listings can offer sellers enhanced privacy and control, critics argue they restrict competition and can leave buyers unaware of available homes.

Zillow's chief economist, Mischa Fisher, noted that these practices can exacerbate the challenges homebuyers already face, particularly in an environment of high prices and limited inventory. He suggested that buyers possess a strong sense of fairness and are attuned to potential conflicts of interest in the real estate process.

The financial implications of private listings are also a point of concern. A separate Zillow analysis from May indicated that homes sold through private channels typically sold for 1.3% less than comparable publicly listed properties, amounting to an estimated loss of $4,230 per transaction for sellers. Over a three-year period from 2023 to 2025, this practice is estimated to have cost sellers collectively $1.36 billion.

Despite these concerns, some brokerages, like Compass, advocate for phased marketing strategies that begin with private showings before a public launch. They argue this approach allows sellers to gauge market interest, test pricing, and make strategic adjustments without the immediate pressure of public market exposure, such as accumulating days on market or recorded price reductions.

However, opponents contend that limiting property exposure to a select network of agents can reduce the pool of potential buyers and diminish the competitive bidding that often secures the best price for sellers. This disagreement has escalated into legal disputes, including an antitrust lawsuit filed by Compass against the California Regional Multiple Listing Service (CRMLS). Compass alleges that CRMLS unlawfully restricts how sellers can market their properties, asserting sellers should have the freedom to market homes outside the shared listing system. CRMLS, in turn, argues its rules are designed to maintain an open and transparent marketplace, and it has also initiated legal action against Compass.

These ongoing conflicts highlight a fundamental divergence in perspectives on whether restricted access to listings empowers sellers or disadvantages potential buyers. Amidst these industry battles, real estate agents continue to play a crucial role for many buyers. The Zillow report indicated that 85% of buyers utilized an agent in their purchase, with 78% believing the agent's commission was justified for the services rendered. For buyers struggling with affordability and inventory shortages, the potential of missing out on homes due to private sales adds a significant layer of complexity and frustration to the home-buying journey.