W
hen Caitlin Bigelow's San Francisco condo deal fell through, she felt relief rather than disappointment. Her Realtor from Compass had suggested listing the home as a "Compass Private Exclusive," which meant it wouldn't be publicly advertised on websites like Zillow or Redfin. Instead, the listing would be announced internally at Compass, making it available only to buyers represented by other Compass agents.
Bigelow received two offers through this method, including one for $2.1 million, which was $95,000 over her list price. She quickly accepted, but later felt uneasy about the decision. "Only two people had seen (the home) and we seemed to be hitting our magic number already," she said. "The longer I sat with that, the more I felt like, well, if two people saw it and we hit the number, what if 50 people saw it?"
Bigelow's question highlights a dispute in the residential real estate industry over private and exclusive listings. After a landmark settlement last year by the National Association of Realtors, the issue has become a contentious one.
Summer Goralik, a real estate compliance consultant, notes that there are legitimate reasons for listing homes privately, such as protecting celebrities' addresses or photos. However, with US homebuyer demand outstripping supply, private listings could mean only select buyers get first dibs on in-demand homes.
Compass is not the only brokerage to list homes off-market, but it has become a signature part of its agents' marketing strategy. This practice has prompted backlash from other industry leaders, who argue it's exclusionary and threatens consumer trust in real estate agents.
Leo Pareja, CEO of eXp Realty, says his company only handles private transactions when required in special situations. "Fewer than 1,000 transactions for us last year were private exclusives out of 350,000," he said.
Critics also argue that Compass' strategy unfairly pushes sellers into making deals with buyers represented by other Compass agents, resulting in the brokerage collecting a commission from both sides of the transaction. Compass has denied this accusation, saying many sellers choose to list their homes privately before sharing them more widely on the multiple listing service (MLS).
Compass employs a "3-phased marketing strategy" for home sellers, starting with private listings to test sales prices, followed by a "coming soon" phase, and finally listing on all platforms. As of mid-February, approximately 35% of Compass' listings were listed as "Compass Private Exclusive" or "Compass Coming Soon."
Reffkin has defended the strategy, saying it allows sellers to choose how their home is marketed. However, critics argue that this approach can lead to a fragmented housing market where buyers can only find certain homes for sale depending on their agent.
Last week, Ryan Schneider, CEO of Anywhere Real Estate, weighed in on the dispute, advocating for transparency and broad distribution of listings. In April, Corcoran rolled out Corcoran Reserve, a private listing network for sellers who want to prioritize "greater privacy and discretion." However, Anywhere Real Estate said it doesn't believe this approach has the best interests of consumers at heart.
Douglas Elliman plans to roll out its own private listing network, but says it's just one of multiple selling strategies for home sellers. Pareja has been vocal in his opposition to private listings, saying they're not good for consumers.
Zillow and Redfin have announced new rules that complicate Compass' strategy, requiring home listings to be published on their platforms within a certain timeframe. Reffkin has defended the strategy of keeping listings off these platforms, arguing it allows sellers to avoid negative data points like price cuts and days on market.
Compass has pushed back on accusations that its private listings are designed to increase commission revenue, saying they're following NAR's rules. In March, NAR amended its rule to allow sellers to list their homes in more private ways, including delaying public marketing on the MLS.
On Thursday, Reffkin announced a new plan to share Compass' private listings with other brokerages while still following NAR's rules. Agents from all brokerages can now view Compass' private listings on a one-on-one basis in a physical book at any Compass office.
Bigelow, the seller in San Francisco, said she didn't feel pushed by her Realtor into the decision to privately list her home. However, after her initial "private" buyer fell through, she worked with the same Realtor to list her home on the MLS and Zillow, ultimately netting $100,000 more than she would have received had the initial private offer gone through.
"I think that the off-market exclusive ultimately is bad for people and good for Compass," Bigelow said. However, if she could do it all again, she would still begin her home sales process by listing privately, but wouldn't accept any offers during that period.
