Private listings limit shopping options
Private listings in real estate reduce consumer choice. By keeping properties off public databases, brokerages and agents restrict what buyers and sellers can see, recreating the informational imbalance that existed before the internet.
The return of the agent’s advantage
Before online listings, buyers relied entirely on agents for access to homes. Agents controlled information, often sharing only what benefited them. A 2005 study by University of Chicago economists Steven Levitt and Chad Syverson found that when agents sold their own homes, they achieved higher prices than when selling for clients—even after adjusting for property differences. The economists determined that agents used their knowledge to their own advantage.
Public listing sites disrupted this system. They gave consumers direct access to properties, prices, and market trends, narrowing the gap between what agents knew and what buyers could find. Private listings reverse this progress. Sellers can hide how long a property has been on the market or any price reductions, while buyers miss homes they might have considered. The outcome is a market where information is unevenly distributed once again.
Market dominance makes the problem worse
In competitive markets, private listings might not cause significant harm. A small brokerage keeping properties in-house would struggle to find buyers. But when one firm controls a local market, the situation changes. Buyers turn to the largest brokerages, assuming they provide the most options. Those firms have little reason to share listings publicly, knowing they can connect sellers with in-house buyers. Smaller brokerages often do the same, further reducing visibility.
Some firms share private listings with partner brokerages, but this doesn’t resolve the issue. Consumers still depend on agents to access these properties, repeating the old reliance on intermediaries.
If private listings keep growing, the market could split into isolated segments where only a few brokerages see the full inventory. This wouldn’t just limit choice—it could skew pricing, making it harder for buyers to determine fair value or for sellers to assess demand. The impact would be strongest in markets already dominated by a single firm, where one company’s decisions shape how the area functions.
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Regulation and education offer limited solutions
Recent state laws regulating private marketing practices are part of the solution, but more consumer education is needed.
Many sellers believe private listings give them more control, but they may not realize they’re sacrificing visibility. Buyers often don’t know they’re missing homes that never appear in public searches. Brokerages that value transparency could help change the situation, but they’re outpaced by firms that profit from keeping listings hidden.
In a 2020 report, the National Association of Realtors’ Clear Cooperation Policy—designed to reduce “pocket listings”—recognized the harm of limited exposure but didn’t ban private marketing. The policy stated that such listings “generally have been perceived as benefitting the listing firm more than the client.”
That view hasn’t shifted. What has changed is the scale of the issue. In the 1990s, agents controlled information because they had no other choice. Today, brokerages do it deliberately.
Low-income families face the sharpest consequences when housing options shrink, but the effects ripple across all buyers.
