Rival real estate behemoths in the U.S. are engaged in a contentious battle for exclusive property listings.
In the frenzy of the real estate market, a divisive issue is stirring up controversy - private listings. Here's a lowdown on this heated debate that's shaking up the way homes are bought and sold in America.
What's the deal with private listings?
Privacy isn't an alien concept when it comes to home-selling. Celebrities and other high-profile individuals, understandably, might want to keep the location of their abode under wraps. However, in a market where demand vastly outweighs supply, private listings can potentially grant select buyers early access to in-demand homes.
Compass, a significant player in the real estate brokerage scene, has been known for its off-market listings strategy - a strategy that has drawn criticism for being exclusivity-driven and potentially undermining consumer trust in real estate agents.
Other critics argue private listings unfairly influence sellers to strike deals with buyers represented by other Compass agents, resulting in the brokerage doubling down on commissions.
Both sides of the fence
Compass denies the accusations of pushing sellers into private deals. Instead, they claim that home sellers should be given a choice in how their homes are marketed. They assert their "3-phased marketing strategy," which tests a home's sales price in private, generates interest with "coming soon" listings, and eventually shares the listing publicly on all platforms. Statistically, 94% of Compass' private listings ultimately ended up selling on the public market.
Opponents, though, like eXp Realty's CEO, Leo Pareja, believe that removing inventory from public view and limiting it to a small group of buyers hurts both buyers and sellers. He claims that fewer than 1,000 transactions for his company last year were private exclusives out of 350,000.
Battle of the bigwigs
Last week, Ryan Schneider, CEO of Anywhere Real Estate, which includes notable brands like Coldwell Banker, Century 21, and Sotheby's International Realty, spoke out in favor of transparency and public distribution of nearly all listings. In April, Anywhere Real Estate subsidiary Corcoran rolled out Corcoran Reserve, a private listing network for sellers seeking greater privacy and discretion.
Douglas Elliman, another brokerage, plans to launch its private listing network, but maintains that it's just one of multiple selling strategies for home sellers. Despite advocating for the broad distribution of listings, Anywhere Real Estate found itself in an ironic situation when, just weeks after launching Corcoran Reserve, it criticized Compass' self-serving debate as not beneficial for consumers.
The Zillow factor
In a development that complicates Compass' strategy, both Zillow and Redfin have announced new rules that restrict private listings. These rules don't directly outlaw private listings but require them to be published within a day on Zillow, or they will not be published at all. Starting late May, "coming soon" listings need to be published on Zillow within 24 hours if advertised on other real estate websites. Redfin adopted a similar policy shortly afterward.
Compass' CEO, Robert Reffkin, defends keeping listings off platforms like Zillow and Redfin initially, claiming they publish price cut history and the number of days homes sit on the market, which negatively impacts a home's sales price.
Caitlin Bigelow, a San Francisco seller, personalized this controversy. Her Compass real estate agent suggested a private listing despite the initial buyer falling through. While she believes private listings are generally unfavorable, she still thinks they offer initial visibility within the Compass network. During the "private" listing phase, Bigelow received an offer that was $95,000 over her list price. In retrospect, she feels accepting an offer before the listing was available to the public may not have been the best decision. After re-listing her condo publicly, she ultimately netted $100,000 more than the private offer would have granted her.
In conclusion, the battle over private and exclusive listings is a war waged on the chessboard of transparency, competitiveness, and fairness in the residential real estate market. As both buyers and sellers navigate this fractured landscape, the question remains: Are private listings a step forward, or a step back?
- Compass, a real estate brokerage known for its off-market listings strategy, defended its approach, stating that it provides home sellers with a choice in marketing options, including private listings, a 3-phased marketing strategy, and public listings.
- In contrast, CEO Leo Pareja of eXp Realty believes that private listings limiting inventory and restricting it to a select group of buyers can be detrimental to both buyers and sellers.
- The technological giants, Zillow and Redfin, have taken a stance against private listings, setting new rules that require them to be published within 24 hours on their platforms or be omitted entirely.
- In the fray, any enthusiasm by Compass over private listings is met with criticism from competitors, like Anywhere Real Estate, who believe such strategies are not beneficial for consumers and undermine trust in the real estate agents market.
- The debate is further complicated by individual experiences, such as that of Caitlin Bigelow, who accepted a private offer worth $95,000 over her list price but eventually sold her condo publicly for $100,000 more, prompting her to question the wisdom of private listings.
