Private listings cost communities of color nearly $10K per home 

Home sellers in communities of color are disproportionately harmed when they choose to list their homes privately instead of using MLSs, according to a new Zillow study.

Homes sold in ZIP codes where a majority of household heads are Black, Hispanic, Asian American, Pacific Islander or Native American typically sell homes for 3.2% less than MLS-listed homes — more than double the 1.2% loss in predominantly white neighborhoods, the study found. That results in $9,851 lost per off-market listing in communities of color, while majority white neighborhoods took losses of $3,694 per home.

Orphe Divounguy, a senior economist at Zillow, said in a news release that private listings "not only harm sellers, but they limit exposure to potential buyers, possibly deepening inequities that have long existed in real estate." Divounguy said transparency is needed to avoid going "back to the dark ages of real estate."

The bigger picture: Overall, Zillow estimates homebuyers and agents lost out on more than $1 billion in 2023 and 2024 when they didn't use MLSs. The company, which defined private sales as those that were "marketed privately" and "seemingly only submitted to the MLS once a purchase contract was in place," said it assessed 10 million transactions for the study, 3.79 million of which qualified for inclusion in the data.

In a different survey published in January, Zillow researchers found race-based differences in who agents tend to encourage to privately list their homes. Nearly three-quarters of Hispanic and Black sellers recalled that they received this advice, compared to 24% of white sellers.

Where Zillow stands on Clear Cooperation: Zillow has consistently been vocal in its support of the Clear Cooperation Policy, which requires that agents add a listing to the MLS within 24 hours of publicly marketing it. 

Some in the industry, including Compass CEO Robert Reffkin, have called for CCP to be eliminated. A recent Compass survey suggested there could be benefits to "pre-marketing" listings through private channels. 

The National Association of Realtors has said it expects to make a decision on CCP in the coming weeks.