A recent study by Zillow has disclosed that home sellers who bypass the Multiple Listing Service (MLS) in favor of private listings experienced substantial financial losses over the last two years. The total losses exceeded $1 billion, with a notable impact observed in communities of color.

Defining Communities of Color

Zillow characterizes “communities of color” as areas where a majority of households are led by individuals from Black, Hispanic, Asian American, Pacific Islander, or Native American backgrounds. According to the findings, these communities saw even greater financial repercussions when home sellers did not list on the MLS.

Financial Impact of Off-MLS Listings

Data from Zillow indicates that in 2023 and 2024, sellers who opted out of MLS listings typically received about $5,000 less for their properties, averaging a sale price that was 1.5% lower than those listed on the MLS. In communities of color, however, this percentage increased significantly to 3.2%—a stark contrast to the 1.2% difference observed in predominantly white neighborhoods.

• In majority-Black neighborhoods, the median difference in sale prices for non-MLS listings was approximately $9,851.
• In majority-Hispanic neighborhoods, the disparity rose to $13,728.

The Role of Real Estate Agents

Zillow’s survey revealed a trend where Hispanic and Black sellers were more likely to be advised by their agents to list property off the MLS. Nearly 75% of these sellers reported recommendations for private listing networks, compared to just 24% of white sellers.

Support for Transparent Listing Practices

The debate surrounding the National Association of Realtors’ (NAR) Clear Cooperation Policy, which requires properties to be listed on the MLS within 24 hours of marketing, has seen Zillow emerge as a strong proponent. This policy aims to bolster transparency in the real estate market, addressing inequities that may worsen with off-market transactions.

Study Methodology

To understand the ramifications of off-MLS listings, Zillow analyzed 2.72 million sales transactions. Their study categorized privately listed sales as those that were marketed exclusively until a buyer-seller agreement was confirmed. Key exclusions from the dataset included new construction, foreclosures, and transactions with extreme sale prices.

Zillow adjusted for market price fluctuations using their Zestimate home price three months prior to the sale, allowing for a fair comparison between MLS and non-MLS listings.

Looking Ahead

The NAR is poised to vote soon on potentially repealing the Clear Cooperation Policy, a decision that could have far-reaching implications for market transparency and sellers’ financial outcomes.