I would like to say something that may make some people at the National Association of Realtors uncomfortable. Not as an attack, but because only unpleasant truths clearly stated are worth saying.
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The market fragmentation we see unfolding in 2026 (private listing platforms, securities portal partnerships, 55% of new listings by the nation’s largest brokerages not reaching the MLS on day one) did not emerge out of thin air.
This event was visibly, but unintentionally, accelerated by NAR policies aimed at preventing this very outcome. That policy is a “clear cooperation policy.” It’s time to honestly consider what that has brought about.
CCPs were designed to open up markets. It promoted underground listings, turning what had previously been a scattered, visible and cooperative practice into an organized shadow market unlike anything anyone had seen before.
Lessons from our own history
Our industry has faced this crossroads before. When MLSs moved from paper books to the Internet, many brokers feared that transparency would destroy their business models.
The victorious leaders did the opposite and accepted it. This decision created decades of growth, consumer confidence, and a collaborative marketplace that was the envy of the real estate industry.
Six years ago, NAR faced a similar moment. And this time, the decision went the other way.
What the market actually looked like before the Chinese Communist Party
Prior to May 2020, private listings existed but were not private. Listing agents might keep a home private for a few weeks before submitting it to the MLS, but they’ll still put yard signs in the ground, post on social media, and send emails to their networks.
Competing brokers may see those listings. They pick up the phone and say, “Will you negotiate with me? I have a buyer.” The collaborations that define our industry were still in place. Because the listing existed on a public market for everyone to see, even if it was private.
By 2019, these informal private listings accounted for approximately 2.4% of all transactions. This is a real problem, but one that can be seen and controlled. NAR looked at these numbers and decided to enact compliance rules. The intention was correct. What happened next was not.
What the Chinese Communist Party actually created and what made it worse
CCP has created a hard binary. Once you publicly advertise your listing in any form, including yard signs, social posts, email blasts, etc., you must submit it to the MLS within one business day. The only option is no public marketing. Nothing is displayed, nothing is advertised, nothing is visible to working agents or their buyers. The Chinese Communist Party did not suspend private listings. It forced them underground.
Agents and brokers who previously operated openly now have a financial incentive to operate covertly. Informal, visible pocket listings (where competing brokers can call and co-broker) have been replaced with organized private listings that are accessible only to affiliated agents and customers.
Later, NAR and many MLSs added fine systems, further exacerbating the problem. Some MLSs impose fines of up to $4,000 per violation on members who do not comply.
I have belonged to many professional associations during my career, and I cannot think of one that has imposed thousands of dollars in fines on its members. That’s no way to lead a professional community. Doing so creates resentment, resistance, and avoidance.
Repression through financial penalties does not eliminate market action. It pushes market behavior deeper underground and sends a signal to the largest players that compliance is optional for those large enough to absorb the costs.
Major brokerages have built their private networks to fall below compliance standards. Independent agents secretly avoided public marketing to avoid risk. The burden of compliance fell heaviest on the very agents the cooperative system was designed to protect.
The result: A 2021 Redfin analysis found that pocket listings have increased by 67% since the passage of the CCP, increasing from 2.4% to 4% of all transactions. Policies aimed at reducing private listings, backed by fines put in place to enforce them, have produced more private listings. And it gave the largest securities firms structural incentives to institutionalize what had previously been informal.
NAR did not seal the pot. I increased the heat and added a lock, but the lid blew off anyway.
Where six years of the Chinese Communist Party have led us
Compass reported in its fourth quarter 2024 SEC earnings report that 55% of all new listings in February 2025 started privately and did not reach the MLS on the first day, and then announced a three-year partnership with Rocket and Redfin to list those properties before the MLS views them. Zillow has started previews. Howard Hanna launched HannaList. Douglas Elliman launches Elliman Private Listings.
MLS is now the last stop, not the first, for a growing inventory share.
And the harm to sellers has been documented. Zillow’s own research of 2.72 million transactions shows that sellers who list outside of the MLS lose between 1.5 and 3.7 percent of the final sale price. A $500,000 home would leave between $7,500 and $18,500 on the table.
This is not a side effect of the private listing trend. This is the direct cost of a suppression strategy that backfired and handed institutional investors the blueprint for building parallel markets. NAR will lose the private listing battle. And the bigger tragedy is that fighting like this could dismantle the very MLS system NAR was trying to protect.
What NAR should do instead
The leaders who embraced the Internet understood something that the architects of the Chinese Communist Party did not. That is, market forces cannot be regulated and subjugated. It can only form a container into which it flows.
First, we advocate removing days on sale and price reduction history from all public portal displays. These two data points are what agents use most to justify leaving an MLS. Removing the stigma removes the main argument.
Second, work with your MLS to create a formal private status designation. Allows for private listings, but all listings must be registered and visible to all MLS participants. Private tags become a visibility setting rather than a wall of inventory.
Third, require seller disclosure in plain language with actual data showing how much non-MLS listings sell for at the kitchen table before anyone signs anything.
In trying to solve a real problem, the Chinese Communist Party created an even bigger problem. Admitting that is not weakness. This is the only leadership move that could still work.
Darryl Davis is the CEO of Darryl Davis Seminars. Connect with him on Facebook and YouTube.
