The private listings debate leaves more questions than answers 

Major brokerages, portals and MLSs have become increasingly invested in creating new policies or technologies to control how listings can be displayed — including who has access, and just how much.

In a collegial webinar hosted by Mike DelPrete on Monday, the real estate analyst spoke with industry consultant Rob Hahn and former Zillow VP and Tomo co-founder Carey Armstrong about some of the biggest questions surrounding listings control today — many of which remain unanswered.

Private listings vs. pre-marketing: 'No bright line'

One of the first things DelPrete and the other panelists sought to clarify was the difference between "private" and "pre-marketed" listings — terms that have become widely used but sometimes confused.

DelPrete said he considers "private" listings as those not readily available to the public, whereas pre-marketing strategies are like "a restaurant that has a soft opening."

A grayer area, however, is whether a listing is considered private if it's available in the MLS but not distributed elsewhere, or if one brokerage just posts it to their website and nowhere else, Armstrong argued. 

"This is really a spectrum and there's no bright line at this point," Armstrong said. "I think eventually there probably will be." 

The question of consumer harm? 'It's muddy'

In the legal battles over selectively marketed listings, some parties — including Northwest MLS and Zillow — have said "hiding" listing data harms consumers.

But DelPrete and the other panelists wondered if that argument really holds up.

Hahn mentioned that sellers might have a variety of motivations for finding a private listing option attractive. When he had to sell a home while raising two small kids, Hahn said he didn't want to deal with the hassle of staging the property or doing other unnecessary prep if he didn't have to. 

Even though it didn't pan out as a viable business strategy for many companies, the rise of iBuying proved that some sellers just want a no-fuss option, Armstrong added. 

Studies produced by Bright MLS, Zillow, Compass and a University of Georgia professor have yielded contrasting results, revealing either the merits or pitfalls of private listings, DelPrete pointed out. That seems to suggest they're neither an inherently good or bad option for consumers — just another option.

"I might say that the key takeaway here is, it's muddy, it's not precise — it's far from conclusive one way or the other," DelPrete said, adding that he'd let the courts determine whether or not any "consumer harm" is involved in private listings. 

Armstrong found it interesting that some state governments have moved to limit exclusive real estate marketing practices, while declining to intervene in other areas of the industry that could be said to cause harm.

"So many things could have attracted legislative attention for this reason, but this one has," Armstrong noted.

New laws may not be the answer

Although some headlines have characterized recent bills as private listing "bans," the panelists seemed to think the laws were a bit murkier, particularly because some do not define terms like "public marketing," "portal" or "multiple listing service."

While those in favor of broad access to listings may be "popping the champagne" in response to such bills, how the laws are interpreted will likely end up being challenged in court, "and that might take two, three years," DelPrete said.

Hahn expressed doubt that legislation will help settle the private listing debate since, he argued,  most bills are being put forth by lawmakers with little industry knowledge. Pointing to a New York bill currently moving through the legislature, for instance, Hahn said an MLS was essentially defined as "two agents who have a shared database," which he thought might end up harming the industry because it is a misleading definition.

MLSs, brokerages moving to assert themselves 

The industry has recently seen some MLSs go national while cutting deals with Compass — the largest brokerage in the U.S. today — and multiple power plays, like MRED's temporary suspension of Zillow's data feed, DelPrete said.

Since NAR "effectively exited policymaking," as Armstrong put it, MLSs have had to become more assertive, and many are now competing for subscribers.

"There are bigger, more prominent MLSs that have grown over time, but we see them starting to actually differentiate by saying, 'We are going to support emerging models, and we're going to do deals, and we're going to have features that other MLSs don't instead of just being the same standard thing that NAR enshrines as an MLS,' and that's really interesting," Armstrong said.

HomeServices of America and Keller Williams' partnership with Cotality on its developing BLX platform is just one example of how companies are realizing that by taking more control of listings input, they can more easily take power away from MLSs before they decide what to do with the listing data, Armstrong added.

Ultimately, private listings aren't the real issue being litigated in cases like Compass v. NWMLS and Zillow v. MRED and Compass, DelPrete pointed out. The central question in those cases is whether there has been anticompetitive behavior and collusion between companies.

"If you're waiting for the federal court to declare Compass's 3-phased marketing program illegal, don't hold your breath," DelPrete said. "It's going to be a while — that is not what is on trial here."