Experts weigh usefulness of exclusive listings

Seeking exclusive listing benefits

Across data from more than 100,000 home sales in the Bright MLS service area, which spans six states and the District of Columbia, the report states it “found no benefits to sellers whose brokers used office exclusive listings.”

“Office exclusives take longer to sell and offer no price advantages over immediately promoting a home through the MLS,” it said. “Meanwhile, the marketplace data strongly suggests that an increase of office exclusive listings has the potential to harm prospective buyers and sellers by limiting access to information and creating a fragmented inventory system.”

Real estate tech strategist and author Michael DelPrete recently wrote an analysis of exclusive listings, noting that many borrowers continue to opt into such provisions.

“At the end of the day, homesellers are choosing whether it’s good for them or not, based on their particular circumstances and the benefits of the program, and in the case of Compass, 55% of new listings opted in to the program in February,” he said. “Compass is not alone; behind the pro-consumer headlines, nearly everyone, from the National Association of Realtors (NAR) to MLSs, from big and small brokerages to the portals, has a financial motivation to fight for for the expansion or contraction of exclusive inventory.”

In March, Compass began giving agents at all brokerages access to “Coming Soon,” which houses its exclusive listings. Compass says that the listings “protect home sellers against negative insights, such as days on market.”

A few weeks after that, NAR announced that its Clear Cooperation Policy, which requires agents to put a listing on the MLS within one business day, will remain in place. However, an additional option for home sellers was added; a delayed marketing exemption period.

Prior to this, NAR offered exemptions for office exclusives in which the seller expressly tells the listing agent to not put the listing on the MLS. The office exclusive listing must be filed with the MLS, but it won’t be disseminated to other MLS participants and subscribers.

Pre-marketing strategies, home price outcomes

The study found that nearly 90% of office exclusives eventually transition to a standard MLS listing in “Active” or “Coming Soon” status before going under contract.

This suggests that many brokerages use office exclusives as a temporary pre-marketing tool rather than a long-term sales strategy.

However, properties that start as office exclusives tend to take longer to sell.

According to the study, standard listings in the Bright MLS service area typically go under contract within three weeks, while those initially marketed as office exclusives take an average of two weeks longer. This delay may result from the limited exposure these properties receive before transitioning to the MLS.

One of the most debated aspects of office exclusives is their potential impact on home prices. Some brokerages argue that pre-marketing a property privately allows agents to test pricing strategies and optimize final sale prices. However, Bright MLS data suggests otherwise.

“When we compare similar homes in similar neighborhoods, we find no evidence that office exclusives sell for more than properties listed directly on the MLS,” the study states. “Even after controlling for variables such as property location, size, and brokerage, the research found no statistical advantage in price outcomes for office exclusives. This contradicts the notion that private marketing leads to premium pricing.”

DelPrete said exclusive inventory is not exclusive forever, adding that “pre-marketing” might be a better label.

“The typical Compass exclusive is off-market for two to three weeks, with 94 percent of these listings eventually appearing on, and selling through, the MLS,” he said. “This pre-marketing period is akin to a restaurant soft opening, that’s a test run held before the grand opening, where a select group of guests try the restaurant and provide feedback, allowing it to fine-tune operations and menu before opening to the public.”

Limited access, low inventory, brokerage strategies

With housing inventory at record lows, office exclusives may further limit buyers’ access to available properties, the study found.

In some ZIP codes within the Bright MLS service area, office exclusives make up more than 20% of total listings. This means that a significant portion of homes for sale may not be visible to the vast majority of buyers who rely on public MLS data.

Buyer access is already a concern in competitive housing markets. According to Bright MLS survey data, 70% of real estate agents reported working with clients who abandoned their home searches due to limited options and bidding wars.

Despite growing interest in private listing networks, office exclusives remain concentrated among a small number of brokerages. The study found that one brokerage brand accounted for more than 25% of all office exclusive listings sold in the past six months, while just three brokerages represented nearly half of all such listings.

For most real estate professionals, office exclusives are used sparingly. In fact, only three brokerage firms had office exclusives comprising more than 10% of their total listings. Even among these firms, a large portion of office exclusives eventually transitioned to the public MLS, according to the study.

DelPrete calculated the potential revenue benefit, after commissions are paid to agents, to Compass for every 100 agents recruited, closed Compass.com website leads, and double-ended deals.

These estimates are based on the following assumptions; average sale price of $1.06 million (Compass FY 2024), average agent production of 6.1 transactions per year (Compass FY 2024), average commission of 3 percent, website lead referral fee of 35 percent, and an 82 percent agent commission split (Compass FY 2024).

“In aggregate and at scale, these benefits could be worth $50 million to $100 million or more in additional revenue per year,” DelPrete said.

The future of office exclusives

The rising use of office exclusives raises important questions about the future of the housing market. While some brokerages see private listings as a competitive advantage, others argue that widespread adoption could lead to a fragmented marketplace where buyers struggle to find and compare homes.

“If private listings become the norm, buyers and their agents will face a more complex and inefficient search process,” the study warns. “Without full MLS participation, market transparency could suffer, making it harder for consumers to make informed decisions.”

DelPrete said another financial benefit comes from using access to a large pool of exclusive inventory to gradually shift commission splits in the brokerage’s favor.

Compass’s average commission split is 82 percent to the agent, 18 percent to the brokerage.

“Shifting that just one percentage point would be worth $56 million to Compass while, on average, costing an agent $1,940 per year,” he said. “For an individual agent, being able to secure two additional transactions per year (buy side or sell side) through access to exclusive inventory would, on average, yield $52k in additional income.

“Three additional transactions would yield $78k, which, in either case, far outweighs the $1,940 an agent might give up from a one percent reduction in their commission split. It’s really a financial win-win for agents and brokerages.”

The full Bright MLS report can be found here.