By now, many of you already know my stance on private listing networks. I have been incredibly vocal about their dubious nature, penned numerous opinion pieces, been threatened with lawsuits, and warned against them on television and in print. I’ve cited studies showing why PLN’s hurt price discovery and explained how these networks only exacerbate the national trust crisis in which the real estate industry now finds itself.
It dawned on me that I have been speaking on a macro level, and that what I should do is shine a light on how agents on the outside of these private networks feel about them. So here goes.
I had dinner with an agent recently who got a call from an agent at another firm in search of buyers for their great private listing. My agent did not know about the listing because it was only on one brokerage’s quiet, super-secret private network, hidden from public view and other brokerages.
In any event, my agent showed the listing, and his buyer loved it. My agent told me he was shocked at the pricing because he felt it was underpriced by some $500,000. They made a full price offer, which was rejected. They then offered a tad over ask, and it was accepted.
The deal has now closed. You’d think that’s probably the end of the story, and everyone went home happy. Not quite.
Looking back on the experience, my agent said he would have been livid were he the seller, being guided with such bad information on pricing and circumventing the need for full market exposure. Had that property been on the open market, it would’ve gotten multiple bids and well over ask.
My agent wasn’t patting himself on the back for getting such a great deal for his buyer. He was upset on behalf of the sellers who were shortchanged.
How PLNs undermine the price discovery process
Price discovery is essential to the process of homebuying and selling because it puts a property out into the orbit for everyone to consider, not just one brokerage. If there is this continuous push by some real estate brokerages to create these artificial markets and guide sellers down this path, they are breaching their fiduciary duty.
As agents, we have a responsibility to others to do the right thing, which means putting our clients first.
I have been beating this drum for over a year because to me, there is nothing more fundamental to the homebuying process than transparency in a fair market structure. A company can manufacture whatever narrative suits their growth model, but slow down for a second and really consider what makes sense here.
As a seller, you should insist on full exposure in a live, real dynamic market; otherwise, you will never know what could have been. Seller’s remorse won’t even begin to describe what will happen if the private listing trend gains more traction. To me, this is not about seller choice versus platform control because sellers do have choices, and platforms are not brokerages. This is about doing what’s right and doing our jobs as real estate professionals.
Do not be bamboozled: Private listing networks are not about some fancy new way of doing things. Invest in great technology, source your information faster and blast your marketing materials more efficiently than ever before. But don’t lose sight of what makes a truly great agent. The market is living, reacting based on transparent interactions.
Ask yourselves: What does it mean when a brokerage proudly advertises that they have thousands of private listings you can only see through them? Is that truly helping sellers or simply benefiting that brokerage? I’ll leave you to decide.
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Bess Freedman is the CEO of Brown Harris Stevens in New York City.
