Compass is taking the old concept of whisper listings—homes available for sale to those in-the-know without their hitting the public market—to a whole new level, even as industry bigwigs are loudly opposed.
A curated, Compass-brokers-only website that potentially allows the brokerage to keep the buyer- and seller-side brokers’ fees in-house, the program is intended to give homebuyers and -sellers a lift in a tight housing market. Prospective buyers can bid without being muscled aside by as many competitors, while sellers can tweak pricing without coming across to the general public as desperate, the thinking goes among its fans.
But just about everybody in the real estate industry—brokers, appraisers, data providers such as StreetEasy and even the Real Estate Board of New York itself—says privatizing listings at a time of limited inventory will make the housing crisis worse. Particularly harmful to buyers, who rely on transparency, the service may also run afoul of fair housing laws with its VIP-focused approach, the critics say.
“Let’s be clear: Any brokerage that advocates for only marketing listings internally is not putting the client’s interests first, but rather it is an attempt to pad its own pockets,” wrote Brown Harris Stevens CEO and former lawyer Bess Freedman in an opinion piece for real estate news website Inman last month. “Private listings minimize competition for the client.”
But Rory Golod, president of growth and communications at Compass, says the program helps ensure fairness for the seller by preventing them from having to combat the impression that if the asking price for their home has been lowered, or if the property has been on the market for a long time, then it is of low quality or somehow less desirable.
“Ultimately, the market is what determines the price of a home,” he said. “It’s not as if sellers have a leg up because of this. All it means is there’s actually an even playing field.”
Making a mark
The so-called private exclusives program is designed to test prices, obtain industry insights and generate early buzz before a property is added to a multiple listing service, or MLS, according to a recent Compass Securities and Exchange Commission filing. Private listings help sellers avoid having “negative insights” about their homes, namely data on price drops and days on the market, published online and available to prospective buyers.
Unveiled at the end of last year and accelerated in the past few weeks, the Compass program is nationally focused, but its local impact is already significant.
Of the roughly 2,300 listings in New York City for which Compass alone was the marketing agent, about 500, or more than 20%, were cordoned off in mid-March as private exclusives, according to a Crain’s analysis of the brokerage’s data. However, most of the private exclusives, or 370, involved co-ops, condos or townhouses in Manhattan, the borough Compass focuses on the most.
Buyers, especially those in the luxury market seeking to keep a low profile, like whisper listings because they may not have to face as many competitors, which seems to be helping deals close more quickly, in addition to the more traditional upsides. Celebrities trying to avoid the limelight have used them, as have spouses locked in messy divorce proceedings and also landlords trying to avoid spooking existing tenants.
Nationally speaking, Compass’s exclusive listings received accepted offers an average of 20%, or eight days, faster than those in a standard multiple listing service, according to the firm’s recent SEC filings, while their average closing price was 2.9% higher. And only 13% of the pre-marketed homes saw price drops, versus 19% among the MLS-only variety. (Similar data is not yet available for New York.)
The Compass-only program also makes it easier for Compass agents to collect all commissions—there’s no splitting fees with a Corcoran or Douglas Elliman agent when both brokers are employed by the same firm—a seemingly major financial motivation. But Golod downplayed that rationale, stressing that 94% of the listings eventually end up on an MLS where non-Compass brokers have a shot at them.
“When people share that [criticism], they’re … not fully educated on how the program works,” he said.
Among those opposed to the Compass program are the brokerage Serhant, the antidiscrimination group National Fair Housing Alliance and StreetEasy, the popular Zillow-owned data service that relies on open listings.
“StreetEasy believes in fair, transparent and equal access to real estate information, and is staunchly against anything that prevents it,” said StreetEasy General Manager Caroline Burton in a statement. “Hiding listings from the public—especially in a market like New York, which faces the biggest housing shortage in the country—not only exacerbates this issue, but puts buyers, sellers and agents at an extreme disadvantage.”
Housing prices remain high in the city despite a spate of recent legislation meant to boost home production. Manhattan’s median sales price in the fourth quarter of 2024 stood at $1.1 million, while Brooklyn’s was $989,000 and Queens’ was $700,000, according to data from Douglas Elliman. Manhattan’s median rent, meanwhile, soared to a new record of $4,500 just last month, in part due to a prohibitively expensive housing market keeping more people in apartments.
Gov. Kathy Hochul and Mayor Eric Adams have blamed skyrocketing costs on a lack of supply, which hidden listings could possibly worsen, critics say.
Golod countered that Compass is not reinventing the wheel: Testing the waters with an initial private listing before an official wider rollout is something that is common with new construction, and Compass is just trying to make sure sellers have the best possible experience when parting with their homes.
“They’re looking to sell the home as fast as possible for the best price with the least amount of hassle,” Golod said. “Harnessing the power of premarketing in the same exact way as home builders and developers do [is] helping them get to those outcomes.”
Growth of an existing trend
Around for years, off-market listings have evolved from one-off efforts into established business lines. Anybody who roots around in deeds for a living and cross-references them with brokerage data will quickly uncover properties of many stripes that found takers without public marketing campaigns.
Nationally 51% of real estate agents report that their employers currently have some kind of private listing network, according to Zillow research, even though brokerages may not acknowledge their existence. The standards-setting National Association of Realtors mandates that properties be publicly listed a day after they go on sale, but enforcement is reportedly rare.
But the trade group seems to be reconsidering that policy. In late March NAR announced that sellers can in fact delay public marketing for a “period of time” to be determined by each multiple listing service. “This is a small step in the right direction,” Compass Founder Robert Reffkin said in a statement.
For its part, the Real Estate Board of New York, which counts many Compass agents among its 14,000 members, says: “There may be times, such as divorce proceedings or when courts issue orders of protection, when you may not want to broadly publicize a listing. But in general, maximum transparency is good for policy, business, licensees and consumers.”
In the end, the issues around privately marketing properties could be decided by the courts. Jonathan Miller, CEO of the appraisal firm Miller Samuel, wrote in a February blog post that he worries the “exclusives” program could face litigation after the fact from sellers angry that their listing was viewed only by a relatively y small audience or buyers mad about not getting enough information before making their purchase. (Compass downplayed this risk, noting that homes have been selling without the aid of a multiple listing service for decades and have not faced this type of litigation.)
“The whole idea in the marketing plan is they’re siding with the seller and hiding information from the buyer,” Miller told Crain’s. “Market value is defined as the agreement between a fully informed buyer and a fully informed seller, and I don’t know how this answers that.”
