Home sellers who did not list their properties on the MLS lost out on more than $1 billion in sale proceeds over the past two years, according to a study published Monday by Zillow. The study also found that these losses were deepest in communities of color.
Zillow defined communities of color as ZIP codes where a majority of households are headed by Blacks, Hispanics, Asian Americans, Pacific Islanders or Native Americans.
In 2023 and 2024, Zillow found that sellers who chose not to list on the MLS typically lost out on nearly $5,000, selling their property for 1.5% less than those listed on the MLS. In communities of color, this number jumped to 3.2%, more than double the 1.2% loss recorded in majority-white neighborhoods.
In majority-Black neighborhoods, Zillow’s analysis found home sellers who did not list on the MLS saw a median sale price difference of $9,851, while in majority-Hispanic neighborhoods, the number jumped to $13,728.
“The data is clear that selling off the MLS costs home sellers in communities of color thousands of dollars in lost value,” Zillow senior economist Orphe Divounguy said in a statement.
“These off-market listings not only harm sellers, but they limit exposure to potential buyers, possibly deepening inequities that have long existed in real estate. We must maintain transparency in the housing market so we don’t go back to the dark ages of real estate.”
Additionally, Zillow survey data shows that Hispanic and Black home sellers are more frequently advised to list their property off the MLS. Nearly three-quarters of Hispanic and Black sellers reported that their agent recommended using a private listing network, compared to only 24% of white sellers.
As part of the debate surrounding the National Association of Realtors’ (NAR) Clear Cooperation Policy — which mandates that a property be listed on the MLS within 24 hours — Zillow has become a vocal supporter of the policy.
To conduct its study, Zillow analyzed 2.72 million sales transactions, comparing homes that sold on the MLS with privately listed sales. The company defined privately listed sales as those that were marketed privately and were evidently only submitted to the MLS once a purchase contract was in place.
“To classify these sales, Zillow identified sales that were reported pending or closed with at most one day active and with a buyer and seller represented by the same agent or by agents within the same brokerage office,” the report stated.
Additionally, Zillow said it parsed off-MLS transactions that were never published to public MLSs after being privately listed. It further narrowed the subset of off-MLS transactions to those with a previously recorded sale on the MLS.
Zillow said only this subset of off-MLS transactions was included in the analysis. It excludes new construction homes, foreclosure sales, auction sales, non-arms-length transactions, bank/corporate/government acquisitions, invalid quit claims and outlier sale prices (defined as below $10,000 or above $10 million).
In determining the impact of how and where the home was listed, Zillow said it started with its Zestimate home price from three months prior to the sale. If a home was listed at this point in time, it was excluded from the study.
“To strip out the effect of market-level price movements during this three-month period, Zillow adjusted the Zestimate using movements in the Zillow Home Value Index at the ZIP code level,” the study explained. “The ratio of the sale price to the Zestimate-based expectation was then taken. The median of this ratio was compared between listing groups: the on-MLS listings compared to the pocket listings and validated off-MLS listings.”
NAR is expected to vote soon on a potential repeal of CCP.
Read more at Housingwire
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