When Seattle real estate agent Sam Cunningham prepared to list a remodeled Issaquah home for sale earlier this year, he made the usual preparations: modern staging, pristine photos and marketing copy gushing over the house’s hardwood floors and “stunning new kitchen.”

But Cunningham skipped one notable step.

He advertised the property on Compass’ website without adding it to the Northwest Multiple Listing Service, the repository of property listings across Western Washington that virtually every agent uses to scour inventory. The NWMLS also feeds prominent home-shopping websites, including Zillow and Redfin.

Instead, the brokerage labeled the home a “Compass Private Exclusive.”

The move launched Cunningham and other Compass brokers with similar private listings into the middle of a debate rocking the real estate industry: Should agents be allowed to market homes without quickly adding them to the centralized listing service most real estate agents and homebuyers rely on?

Many of Seattle’s most prominent real estate players say no.

The debate highlights fault lines about the role of listing services, the interests of buyers versus sellers and questions of fundamental fairness. For everyday people, the outcome could shape the way they shop for homes or market their properties for sale.

Without a comprehensive look at homes for sale in their local market, buyers could miss out, said Errol Samuelson, the chief industry development officer at Seattle-based Zillow who has spoken out against private exclusive listings.

“Your perfect dream home might be the home that you never got to see.”

Outrage and skepticism

Unlike in virtually all other areas of the country, private listings are barred by the NWMLS.

New York-based Compass has taken aim at the local prohibition, sparking a federal lawsuit and plenty of industry controversy. This spring, Seattle-area Compass agents listed a handful of private exclusive properties before the NWMLS cut off the company’s access to its data feed in April, essentially forcing Compass to relent.

Compass CEO Robert Reffkin insists the focus on private listings is an effort to give sellers more choice in how to market their homes. Skeptics say the push is more about Compass’ bottom line.

To see private exclusive listings on Compass’ website, home shoppers are first asked to enter their contact information to hear back from a Compass agent. Opponents say that gatekeeping is a clear sign that the listings are more about generating buyer leads and attracting new agents to join Compass than about a moral case for seller choice.

“What I found really surprising was the amount of outrage that I received from fellow brokers,” Cunningham said. “People calling me and asking what I was doing and why would I cross the picket line, so to speak.”

Why private listings?

Avoiding the multiple listing service might sound counterintuitive. Most sellers want to reach as many home shoppers and buyers’ agents as possible through the listing service and, in turn, on widely used sites like Zillow and Redfin.

“Sellers want to be in the MLS because that’s where buyers are,” said Seattle Windermere agent Sol Villarreal, who opposes the use of private exclusive listings.

Compass agents say that may be the case for most sellers, but not all.

Some want to test a price to see how a smaller pool of potential buyers responds.

Sellers have another concern with going straight to the listing service. It begins a key counter known as days on market. In the NWMLS and on third-party sites like Zillow, buyers and their agents can see how long a home has been for sale and whether its price has dropped.

“As that number gets higher and higher and higher, your seller becomes more vulnerable to low offers and to a perception that their house is aging like hot food at the deli,” Cunningham said.

A seller who uses a strategy like Compass’ private exclusive listings may accept an offer before the home is widely listed, or they may decide to proceed to the multiple listing service. In the latter scenario, those initial “exclusive” days would not appear as days on market, making the home appear fresher.

Sellers should have a choice about whether to list in the NWMLS, said Compass agent Carii Clawson, who listed a Bainbridge Island home as a private exclusive.

“My job is to explain to them the risks and the rewards and strategies and then employ whatever strategy they elect to employ.”

Others focus on the need for transparency.

“Doesn’t it feel a little bit like if the reason is to hide ‘days on market,’ that we’re kind of hiding the truth?” said Coldwell Banker Bain Principal Managing Broker Keoki McCarthy, who declined to speak specifically about Compass but spoke generally about the practice of private listings.

“If a house sits on the market for a little while, it’s probably fair that the consumer knows that.”

Just how accessible Compass’ private listings are remains the subject of debate.

Search Compass’ website in an area where private listings are allowed and you’ll see a prompt toward private listings. A search last week for homes in San Francisco, for example, yielded a note that 125 private listings could be a match. Clicking “learn more” directs a shopper to a form asking for contact information to hear back from a Compass agent.

“Discover properties that are not publicly advertised — a critical advantage in an inventory-constrained market,” the site urges.

Opponents say that process is geared toward allowing Compass to gather buyer contact information in hopes of convincing them to work with a Compass agent. Some non-Compass agents say they’ve had trouble getting Compass agents to send them private exclusive listings. Reffkin insists Compass will work with agents from any brokerage.

Even as Compass has halted private exclusive listings here because of local rules, a small share of Seattle-area properties are already sold without full transparency. Some homeowners want to sell to a neighbor or family member without broad advertising. Wealthy people, celebrities and homeowners with security concerns sometimes sell their properties off-market. Agents working with privacy-conscious sellers may skirt the NWMLS rules or submit listings and get permission to not have the property displayed broadly.

Off-market listings are reasonable in some cases, nearly all agents agree. But publicly marketing more homes for sale only on one brokerage’s website — or in a physical book, as Compass plans to do in other states — raises risks that only select buyers will have access, said Villarreal, the Windermere agent.

The practice, he argued, “makes a market that’s already very challenging for buyers even more challenging for buyers.”

Battling the NWMLS

As the private listings hit Compass’ website across Western Washington, Reffkin posted nearly daily on LinkedIn and Instagram highlighting the listings and slamming the NWMLS rule.

“Why has our industry allowed a trade (organization) like NWMLS to restrict how homeowners and their agents market their homes — often their most valuable asset?” Reffkin wrote.

Along the way, he traded Instagram barbs with Windermere, the largest brokerage in the Seattle area whose co-president OB Jacobi described private listings as “inherently collusive and anticompetitive.”

The NWMLS also fired back, temporarily suspending Compass’ access to its data feed. That essentially forced Compass to either play by the NWMLS rules or “be completely out of business in a matter of days,” according to Compass. The brokerage complied and then sued the listing service.

“NWMLS has successfully prevented any meaningful threat to itself and its owner-brokerages by adopting and enforcing a series of rules designed to force anyone wishing to buy or sell a home in the Seattle area with the help of a real estate professional to do so through its platform,” Compass lawyers wrote in a lawsuit filed in federal court last month.

Outside of Washington, Compass said nearly half of home sellers working with the company in the first quarter of this year used its three-phased marketing strategy, which includes beginning with a private exclusive listing before adding the property to a local listing service.

Elsewhere in the country, where most listing services are owned by Realtor associations, National Association of Realtors rules allow some degree of exclusive listing. But the NWMLS is independently owned and sets its own rules.

NWMLS CEO Justin Haag said in an interview with The Seattle Times this month the independently owned listing service is “confident in its pro-competitive rules and systems” and committed to an “open, fair, transparent and comprehensive marketplace.”

As brokers add homes to the NWMLS, they can leave out sellers’ names or redact their exact address. Sellers can avoid signs in their yard, limit the photos shared on the NWMLS or opt to not show their home on sites like Zillow.

In rare cases of celebrities or people with security risks, the NWMLS will allow an unpublished listing that does not appear to other agents in the listing service.

“We provide sellers with many different options and choices about how their property is marketed,” Haag said.

But, he added, transparency for buyers matters, too.

“Days on market and price changes are facts,” Haag said, “and we don’t want to conceal information from consumers.”

Advocates at the Consumer Policy Center wrote last month that private listings could make buyers feel pressured to choose agents from brokerages with private listings or could push agents at other brokerages to offer private listings themselves.

And some worry about potential discrimination.

The National Association of Hispanic Real Estate Professionals warned the real estate market is “on the cusp of the worst fair housing crisis since the 1960s.” Courtney Johnson Rose, the president of the National Association of Real Estate Brokers, a trade group for Black real estate agents, told an industry publication last month that private listings could lead to discrimination and “set us back.”

Compass says its policies comply with fair housing rules. The company emphasizes that the vast majority of homes that begin as private exclusive listings eventually hit a multiple listing service.

Even so, “we don’t want a situation where the starting gun goes off but some of the runners are halfway down the track because they saw the listing a week ago, and everyone else is only seeing it now,” said Samuelson, from Zillow.

Zillow announced last month it would not show any listing that was marketed publicly without being submitted to an MLS. Redfin announced a similar policy.

Seller trade-offs

Sellers who choose private listing have potential trade-offs to consider.

A nationwide Zillow analysis excluding new construction found that 97% of homes sold in 2023 and 2024 were listed on a multiple listing service. Comparing each home’s sale price with Zillow’s estimate of each home’s value, the company estimated that the median price of homes sold off-market was 1.5% less than homes marketed on a multiple listing service. A review of six months of sales from the D.C.-area Bright MLS found that private listings were on the rise but had no effect on a home’s final sale price.

Compass offers its own analysis, saying that among homes Compass agents sold in 2024, those that used the company’s three-phase marketing strategy sold for about 3% more. It’s not clear how many of those homes were eventually listed on an MLS.

“There is no downside,” Reffkin told investors on an earnings call last week. “The worst thing that happens is a homeowner gets an offer, and they have an opportunity to turn it down and go to the public sites with the benefit of price discovery from premarketing.”

Muddying the picture is that nearly everyone weighing in on the debate could have some financial interest in the outcome.

Compass stands to benefit from a sense among buyers that working with a Compass agent or visiting Compass’ website will show them listings they won’t see anywhere else.

At the same time, the NWMLS relies on a comprehensive listings database to maintain its role as the dominant listing service for agents in the region. Zillow and Redfin likewise built their business on promising consumers a comprehensive look at everything on the market or selling agents leads.

Zehua Zhou, the owner of the home Cunningham listed in Issaquah, asked Cunningham about the benefits of the exclusive approach “instead of directly listing in the MLS where the listing will be seen everywhere,” Zhou said.

Cunningham described the process as marketing research, likening the move to a company testing its product with potential customers for feedback before eventually advertising it more broadly. Zhou liked the idea.

“If we list it and then, let’s say nobody wants it in two weeks, then the listing becomes cold and then people try to negotiate lower than asking price,” Zhou said. “But if we want to ensure the product gets hot and gets popular among buyers, I think it kind of makes sense to sample some buyers.”

Zhou said he considered the potential downside of not having a broader pool of buyers see the home right away, but he thought it was “important to get it right the first time.”

After five days as a Compass exclusive, Cunningham added the home to the NWMLS. The property received four offers and sold for $42,500 over its $1.075 million list price.

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