S
eattle real estate agent Sam Cunningham listed a remodeled Issaquah home for sale without adding it to the Northwest Multiple Listing Service (NWMLS), instead labeling it as a "Compass Private Exclusive." This move sparked debate in the industry about whether agents should be allowed to market homes without quickly adding them to the centralized listing service most real estate agents and homebuyers rely on. Many prominent Seattle real estate players, including Zillow's Errol Samuelson, argue that private exclusive listings can lead buyers to miss out on their dream homes.

    Compass CEO Robert Reffkin insists that the focus on private listings is about giving sellers more choice in how to market their homes. However, skeptics say it's more about Compass' bottom line and generating buyer leads. To see private exclusive listings on Compass' website, home shoppers must enter their contact information to hear back from a Compass agent.

    Some sellers want to test the market with a smaller pool of potential buyers or avoid the days-on-market counter that can make their property appear older and more vulnerable to low offers. Agents working with these sellers may skirt NWMLS rules or submit listings without displaying them broadly. Off-market listings are reasonable in some cases, but publicly marketing homes only on one brokerage's website raises concerns about select buyers having access.

    The practice has sparked a federal lawsuit from Compass against the NWMLS, which temporarily suspended Compass' access to its data feed. The listing service argues that private exclusive listings are "inherently collusive and anticompetitive." Zillow and Redfin have announced they will not show any listings marketed publicly without being submitted to an MLS.

    Sellers who choose private listings face potential trade-offs, including a lower sale price compared to homes marketed on a multiple listing service. However, Compass claims that its three-phase marketing strategy, which includes beginning with a private exclusive listing, can lead to higher sale prices. The debate highlights the complexities of the real estate industry and the interests of buyers versus sellers.