‘Illogical’ or ‘awesome’? Private listings divide Compass agents 

Nearly a year after Compass formally unveiled its "3-phased marketing strategy," which promotes listing a property off the MLS before going to the open market, the company has retooled much of its brokerage strategy around Private Exclusives, and executives have repeatedly made their case for "seller choice" in how a home is marketed. 

According to recent reports, Compass had just over 9,000 Private Exclusive listings at the beginning of September.

While pre-marketing and office exclusives have sparked a loud and divisive debate among brokerage industry execs, Compass agents are voicing their opinions as well. Some told Real Estate News that they see value in listing off-market to test price, while others expressed concerns over trust, ethics and whether Compass' approach is at odds with a client's best interest. 

'It just seems illogical'

The controversy around Compass' Private Exclusives effort mirrors much of the industry-wide debate over NAR's Clear Cooperation Policy. Common themes of the Clear Cooperation discourse have included fair housing rules, transparency and concerns relating to discrimination — and whether the residential brokerage industry is truly putting the consumer first. 

Compass' push for private listings, and the company's May announcement of its physical listing books, are causes for concern, Baltimore-based Compass agent and coach Alyssia Essig explained to Real Estate News. Essig, a 27-year veteran of the industry, is a former president of Greater Baltimore Board Of Realtors and has worked with Compass for the last five years. 

"If everyone starts putting things in private listing networks, it's going to be an absolute mess and disaster, which is not consumer friendly," she said. "It reduces the exposure for a home seller and it reduces the ability for homebuyers to find the home they want to find — and that's frustrating and kind of stupid in my opinion. It just seems illogical."

Seattle-area agent Darcy LaBelle shared similar sentiments on market transparency, arguing that Compass' push for private listings is effectively "eliminating groups of individuals to have access to these listings." LaBelle, who joined Compass in 2021, recently left to return to Windermere largely due to Compass' Private Exclusives effort and CEO Robert Reffkin's aggressive posturing toward other industry leaders, she explained to Real Estate News.

"I have a fiduciary responsibility to my clients to always work in their best interest. It's like when you go to see a doctor, they have a responsibility to work in your best interest always," LaBelle said. "And so how am I working in my client's best interest if I'm promoting something that I don't believe in?"

'Trust is already extraordinarily fragile'

While LaBelle and Essig praised Compass' digital tools and tech offerings, they both view the private listings push as ethically fraught and highlighted concerns about how such efforts can impact consumer confidence in agents and the industry as a whole. 

"If we go this route of private listing networks, it's going to erode the trust between the agent and the consumer, and the trust is already extraordinarily fragile," Essig said. "It's making it worse, not better, in my opinion."

LaBelle believes top-down brokerage strategies can damage agent trust as well. In Seattle, where agents were on the front lines of Compass' battle with Northwest MLS, it was the local real estate professionals who were at risk for penalties and fines.

"There's a trust factor, and I was feeling that way with Compass, like, are you just using me? Am I just a cog in the machine? Are you just leveraging my contacts for this publicly-traded company to make money?" LaBelle explained. "As an agent, I just stopped feeling supported, and I started feeling like I was a tool. So I walked away."

How Private Exclusives can give agents an edge

But other agents who spoke to Real Estate News see value in the brokerage's approach.

Rafael Murillo, a Compass agent in Chicago who specializes in the high-end market, says the 3-phased strategy is "a great marketing tool," especially in a region where the local MLS, MRED, has already had a private listing network in place for nearly a decade. 

To Murillo, "there's no reason for me not to start pre-marketing a property," though he said his goal is "for the listing to always hit the public market" after some pre-marketing.

"A perfect example of using the 3-phased marketing strategy with a client is when we're not aligning on the list price. Maybe I'm suggesting one list price to the seller, but the seller wants to test a much higher price," Murillo explained to Real Estate News. "We're one of the largest real estate firms in the country — and in Chicago — so we have a good reach and a good pulse on the market."

Avisha Kassir, a Miami-based Compass agent who regularly represents ultra-high-net-worth individuals, believes Private Exclusives are also a selling point when working with highly particular and affluent buyer clients. 

"If I can give my buyers access to off-market properties — and I'm the first one to know when a property hits the market — I mean, I feel like a pretty awesome, badass agent," she said. "Compass knows that their assets are their agents. Compass knows that we are the ecosystem — the 3-phased strategy really helps a lot of these really tricky situations."

Whoever owns the listings controls the data

In April, Zillow announced it would ban listings that are publicly marketed but not widely available to consumers, and Compass struck back with an antitrust suit. 

Why are these corporate giants taking such aggressive actions?

"It's about the data," Essig said. "And that is exactly why Zillow and Compass are going at it. Because if Compass wins, Zillow loses a significant portion of its data." 

And stuck in the middle of the fight are agents and consumers. "Everyone is self-serving in this conversation, and everybody seems to be forgetting about the consumer. And that's the frustrating part to me," Essig added.

LaBelle agrees that controlling data is at the core of the battle — because that gives companies greater control of the market. Compass' strategy, she believes, is "driving people to Compass.com to collect information and try to keep it in-house, to increase market share. Because as a publicly-traded company, that's what you've got to do — increase your market share."

And that strategy, says Murillo, represents a significant threat to home search portals. 

"Obviously, this type of marketing doesn't sit well with companies like Zillow, because they're in the lead generation business. Their business model is to sell leads and if they don't have all the real estate listings, then they might lose some of that market share of the online consumers, or maybe agents."