Listing off the MLS cost sellers more than $1B, study finds 

It's one of the real estate industry's hottest questions: How much more — or less — do sellers get for their homes when they don't list them on the multiple listing service?

A new study from Zillow has found that off-MLS sellers "left more than $1 billion on the table" in 2023 and 2024. That translates to a typical loss of $4,975 per home, with losses in some areas reaching as much as $30,000.

This aligns with oft-quoted findings by Bright MLS and Drexel University, which found that homes listed through Bright sold for 18% more than homes not marketed on the MLS.

It's also sure to add fuel to the debate over private listings and the Clear Cooperation Policy instituted by NAR in 2020.

Zillow CEO calls private listings an attempt to 'double dip'

Clear Cooperation requires publicly marketed homes to be listed on the MLS within one business day, and some leading brokerages have pushed back hard on the rule. Compass CEO Robert Reffkin has said homeowners deserve to have more control over how their homes are marketed and how information is shared. To that end, the brokerage launched a "3-phase marketing strategy" in November that encourages agents to pitch sellers on Compass' Private Exclusives channel before going to the open market.

Zillow CEO Jeremy Wacksman, on the other hand, has taken a firm stance against private listing networks. Most recently, he wrote in a Feb. 17 blog post that PLNs limit a home's exposure to the market to the detriment of sellers.

"Make no mistake, this practice is designed to benefit a participating brokerage's own bottom line as an attempt to 'double dip' on commissions from both sides of the transaction within their brokerage," Wacksman wrote. "And it comes at the expense of the seller, who is parting with what is often the biggest financial investment of their lifetime and not reaping the full benefit."

What 'misinformed' agents are telling consumers

Wacksman also noted that agents are increasingly pushing clients to list on a private network. A January survey found that nearly two-thirds (63%) of the 2,000 consumers polled said their agent encouraged them to list on a PLN. That's up from 18% five years ago.

The poll also found that 68% of consumers who worked with agents said their agent did not explain the difference between listing on the MLS vs. a private network.

A separate survey of 1,000 agents, meanwhile, found that most — 56% — believe private sales lead to higher sales prices, which Wacksman said "reveals just how much they are being misinformed by the talking points of some large brokerages leaning into private networks." Even more agents (61%) said they believe private listings benefit buyers, with 64% calling off-MLS listings good for sellers, the survey found.

And while 97% of agents said it's "important to have all listings in a single search experience," nearly half (44%) said they listed a home privately in the past six months.

A closer look at the numbers

Zillow's analysis of home sales covered 46 states and 10 million transactions. Of the 2.7 million that met their criteria for inclusion in the study, they found that 96.67% were on-MLS listings and 2% were "pocket listings." The others were off-MLS deals for homes that had previously been listed on the MLS. New construction homes, foreclosures and "outlier" sales of less than $10,000 and more than $10 million were excluded.

Sellers in 44 of the 46 states saw losses due to off-MLS sales. Of the 10 states with median losses of more than 2%, these were the hardest hit:

• California (median loss of 3.7%, or $30,075)

• New York (median loss of 3.7%, or $13,749)

• Massachusetts (median loss of 3.4% or $20,171)

The study also found that lower-priced homes saw the biggest losses. The bottom tier, defined as the lowest 5% of Zestimates, had median losses of 3.1%, while "luxury tier" homes (the highest 5%) lost 0.4%.