More about private listings and the big portals

I’ve been writing about private listings for a couple months now. Not because I have a vendetta, but because I think the question matters:

Is this strategy protecting you, or protecting the guy selling it to you.

Turns out I’m not the only one asking.

A United States Senator just sent a letter to the CEO of Compass and the CEO of a Chicago MLS called MRED. She’s asking them to explain how “private listings” work, and whether they’re quietly building two different housing markets: one for insiders who get first look, and one for everyone else who gets what’s left over after the good stuff already got picked through.

A House committee sent a similar letter two weeks before that. Both chambers, both parties, same question.

I’m not bringing this up to make a political point. I don’t care what side of the aisle you’re on. I care that when a sitting Senator and a House committee both start asking the same question I’ve been asking my own clients for months, it’s worth pausing on.

Here’s the thing nobody wants to say out loud: private listings are not automatically bad.

I’ve said that before and I still believe it. For the right seller, the right property, the right timing, they can be a legitimate tool.

But a tool only stays a tool if it’s being used for you. The minute it becomes the default, the minute it becomes the way a brokerage keeps inventory in house and chases both sides of a deal, it stops being strategy and starts being leverage taken from your pocket and moved into someone else’s.

That’s the two tier market Elizabeth Warren’s letter is describing. It’s not a conspiracy theory. It’s math. Fewer eyes on a listing means less competition. Less competition means less leverage. Less leverage means less money in your pocket at closing.

But that’s your call to make, not mine. Money isn’t the only thing on the table.

Maybe privacy matters more to you.

Maybe you don’t want a parade of strangers through your house for a month.

Or don’t want to keep it staged and spotless with kids and dogs living in it.

Or don’t want the whole neighborhood watching your business.

Maybe having one or two serious buyers walk through quietly, instead of forty tire kickers, is worth leaving something on the table for.

That’s a real trade, and if that’s the trade you want to make, make it with your eyes open.

That’s not a bad decision. That’s just a decision, and it should be yours, not something you got steered into.

But while you’re deciding that, decide something bigger too.

Because this isn’t just about one listing. Zillow’s fighting for its life. NAR’s still cleaning up after a settlement that rewrote how agents get paid. Compass just swallowed Anywhere. (full disclosure: Anywhere holds my license).

The big guys are getting bigger, and the small shops are getting squeezed whether anybody likes it or not.

When I was a kid, there was a hardware store by my house. Jimmy, who owned it, had to be a hundred years old, maybe eight hundred square feet of floor space with a billion dollars of inventory crammed into it. You needed some obscure quarter inch screw with a weird head, he’d bark “stay here,” disappear into the back for ten minutes, and come limping out with two of them in a little brown envelope. Free of charge, because that’s who he was.

Now when I need that same screw, I go to Home Depot. Not because that old man wasn’t great at his job, he was. He’s just gone, because the model he was running couldn’t compete with reach, inventory, and price at scale. You can love the guy and still go to Home Depot, because loving somebody isn’t the same as them being the right tool for what you need right now.

Real estate is having that same moment. The question isn’t whether the old model was good. It was. The question is whether it’s still the right tool for what you need right now, and that’s on you to answer honestly, not on nostalgia.

So, here’s the question underneath all of it: do you want the reach and the machine of a big vertical brand behind your house, or do you want the guy who’s always taken care of you because he shows up at Thanksgiving?

Both are valid reasons to hire someone. Just know which one you’re actually picking.

And here’s the level under that one. The choice you make on your listing isn’t just about your listing. Right now, you get to choose, open market or private, big brand or small shop, because there’s still a real open market to measure either choice against. But, if pocket listings keep becoming the default instead of the exception, that open market thins out. Less price discovery. Less leverage. Not just for the people who went private, for everybody. At some point “private listing” stops being a choice you make and becomes the only option left, because nobody protected the public market underneath it.

That’s what Elizabeth Warren’s letter is really circling, whether she’d put it that way or not.

It’s not just “did this one seller get a fair shake.” It’s “if this becomes the standard, does the open market survive at all, and does your kid get the same choice you had when they sell this same house someday.”

So ask your agent, whoever that is, three things:

Why is this home not going straight to the open market?

What am I giving up by not going wide right away?

Who does this actually benefit, me or you?

If they can’t answer clean, you already have your answer.

I’m not here to tell you private listings are inherently wrong. I’m here to tell you the burden of proof just went up, and the stakes are bigger than your closing statement.

Peace