Real estate sector in Seattle engages in heated disputes over secretive house listings
In the volatile world of Seattle real estate, the debate over private exclusive listings has sparked fury and bafflement alike. When real estate agent Sam Cunningham decided to keep a Issaquah home off the Northwest Multiple Listing Service (NWMLS) earlier this year, he ignited a firestorm, unintentionally becoming a pawn in the fight against the traditional real estate industry.
Cunningham, a Compass broker, labeled the property a "Compass Private Exclusive" and listed it on his brokerage’s website instead. The move had repercussions, launching him and fellow Compass brokers into a tempestuous uproar that's shaking the real estate industry to its core.
Many of Seattle's most powerful real estate players argue vehemently against this clandestine practice, maintaining it undermines the trust and transparency fundamental to the real estate market. The heated debate centers on the role of listing services, the interests of buyers versus sellers, and the question of fairness. For the average Joe or Jane, the outcome could drastically influence the way they navigate the home buying and selling process.
Without a comprehensive overview of homes for sale in their local market, potential buyers could miss out on their dream homes, cautions Errol Samuelson, the chief industry development officer at Seattle-based Zillow. "Your perfect dream home might be the home that you never got to see," he warns.
The controversy began when Compass aggressively marketed private listings, spurring a federal lawsuit and a flurry of industry discord. Despite local prohibitions, Seattle-area Compass agents began listing private exclusive properties on their website, much to the ire of the NWMLS, which ultimately cut off the company's access to its data feed. Compass aims to give sellers more marketing freedom, but critics argue the push is more about profit than principle.
To access private exclusive listings on Compass' website, buyers must first surrender their contact information, leading opponents to claim that these listings are more about generating leads and recruiting new agents than autonomous selling choice. Cunningham, the real estate agent in question, admits he received backlash from fellow brokers—an outcry he found surprising. "People called me, asking what I was doing and why I was crossing the picket line, so to speak," he recalls.
The private listing strategy may seem counterintuitive, considering most sellers want maximum exposure through the NWMLS and popular sites like Zillow and Redfin. But, Compass agents argue, a select few sellers demanding discretion or wanting to test their pricing or buyer interest make this strategy attractive.
Sellers are also wary of the days on market count that begins as soon as a property is listed on the NWMLS. As the days on market counter increases, a seller becomes increasingly vulnerable to low-ball offers and the stigma of an "aging" home. Using a strategy like Compass' private exclusive listings, a seller may accept an offer before the house is widely listed, or they may decide to proceed to the NWMLS, erasing the "exclusive" days from the days on market count, making the home appear fresher. Compass maintains that sellers should have a choice about whether to list in the NWMLS.
Transparency is at the heart of the debate. "Doesn't it feel a bit like if the reason is to hide 'days on market,' that we're kind of hiding the truth?" questions Keoki McCarthy, a principal managing broker at Coldwell Banker Bain. He and others argue that buyers deserve to see the truth, particularly if a home has lingered on the market for some time.
The extent to which Compass' private listings are indeed private remains unclear. Searching for properties in areas where private listings are allowed reveals a call to action leading to a form asking for contact information to hear back from a Compass agent. Some non-Compass agents say they've struggled to obtain private exclusive listings from Compass, while the brokerage insists it will work with agents from any brokerage.
Transparency concerns aside, the practice of private listings raises questions about market access and fairness. Village, a Seattle-based Windermere agent, argues that private listings make an already challenging market for buyers even harder. "In essence, it makes a market that's already very challenging for buyers even more challenging for buyers," he asserts.
As the private listings hit Compass' website across Western Washington, Robert Reffkin, the company's CEO, took to LinkedIn and Instagram, generating daily posts slamming the NWMLS and espousing the virtues of private listings. He traded social media barbs with Windermere co-president OB Jacobi, who described private listings as "inherently collusive and anticompetitive." The NWMLS followed suit, temporarily suspending Compass' access to its data feed, forcing the brokerage to either comply or cease operations.
Compass sued the NWMLS, alleging the service had unlawfully and uncompetitively restricted how homes could be marketed, forcing real estate professionals and homeowners to use the NWMLS platform in Seattle. Outside of Washington, Compass claims nearly half of home sellers working with the company employed its three-phase marketing strategy, which includes starting with private exclusive listings before adding the property to a local listing service.
Off-market listings may be appropriate in certain situations, nearly all agents agree. However, publicly marketing homes for sale exclusively on one brokerage's website (or in a physical book, as Compass plans in other states) raises concerns about restricted access and skewed market dynamics. Village, the Windermere agent, argues the practice risks making an already challenging market even tougher for buyers.
Ultimately, the choice to list a home privately comes down to sellers making informed decisions about their trade-offs. A nationwide analysis by Zillow found that 97% of homes sold in 2023 and 2024 were listed on a multiple listing service, while Compass posits that homes it sold using its three-phase approach in 2024 sold at about 3% higher prices. Obviously, much more research and debate are needed surrounding this contentious issue.
[1] Compass, Inc. (2021). Compass Market Insights: Home Touring in the Age of Covid.
[2] National Association of Realtors (n.d.). Exclusive Right to Sell Listing Agreement.
[3] Kharif, E. (2021, February 16). Compass Says Half Of Home Sellers Used Its Unpublished MLS Strategy.
[4] Adhikari, N., Reynolds, M., Castellucci, J., Cantu, K., & Ng, J. (2021). The Return of Exclusive Listings: Perspectives from Consumers, Agents, and Brokers.
- The controversial strategy of Compass, a real estate brokerage, includes listing some homes as private exclusive listings, causing upheaval in the Seattle real estate industry.
- Errol Samuelson, the chief industry development officer at Seattle-based Zillow, warns potential buyers that without a comprehensive overview of homes for sale in the local market, they might miss out on their dream homes.
- The private listing strategy employed by Compass raises questions about market access and fairness, with critics arguing it makes an already challenging market for buyers even harder.
- The debate over private exclusive listings in Seattle real estate centers on the role of listing services, the interests of buyers versus sellers, and the question of transparency and fairness, with opponents claiming that these listings are more about generating leads and recruiting new agents than autonomous selling choice.
