T
he Real Estate Industry's Hidden Listings Problem

    In San Francisco's Potrero Hill neighborhood, a two-bedroom condo at 364 Arkansas Street is listed for $999,000 on Compass' website. However, when you search the same address on Zillow or other popular home-listing portals, it appears to be "off-market." This discrepancy highlights a growing trend in the real estate industry: exclusive listings.

    Compass CEO Robert Reffkin has been leading the charge against traditional listing practices, arguing that sellers should have control over how their homes are marketed. As a result, many agents affiliated with Compass are advising clients to opt for limited advertising campaigns or even hide their homes from public view entirely. This shift poses a significant threat to Zillow and other search portals that rely on an open flow of data.

    The National Association of Realtors (NAR) has been trying to stem the rise of "pocket listings," which are quietly advertised among select groups rather than shared widely. However, Reffkin's efforts have led to a new policy allowing sellers to list homes on the MLS but opt out of sending their data to sites like Zillow for a period of time.

    Compass' proposed three-phased marketing strategy involves debuting homes in its internal database as Private Exclusives, followed by a Coming Soon phase where the listing is shared publicly within Compass' network, and finally an all-hands-on-deck approach where the listing goes live on all typical online outlets. This strategy allows sellers to test the waters before launching their home on the open market.

    The free flow of listings benefits not only giant search portals but also smaller brokerages or independent agents, allowing them to compete with larger companies. However, if large brokerages exert greater control over listings, they stand to gain a clear edge in the marketplace. In a tight market where every day matters, exclusive inventory can be a seductive sell.

    The stakes are high for Zillow and other search portals, which could see their revenue decline as buyers turn to agents who have access to exclusive listings. The industry is at a crossroads, with some arguing that sellers should have control over how their homes are marketed, while others claim that sharing homes everywhere is the best way to achieve top dollar.

    As the debate rages on, it's clear that the future of real estate search will be shaped by the battle for inventory. With Compass' aggressive push into exclusive listings and other large brokerages following suit, the industry may be headed towards a new era where buyers have to navigate multiple platforms to find their dream home.