The recently announced partnership between Compass and Redfin has sparked a debate about the role of private (or preview) listings and how they should be treated in MLS systems.
At the heart of the debate about private real estate listings is a discussion about price discovery, or how the market knows what something is worth. For residential buildings, the process is especially delicate. Unlike stocks and commodities, every home is different, and the “right” price cannot be known in advance. It must be discovered through interaction between buyer and seller over time.
With this in mind, it’s worth taking a step back from the rhetoric often framed around “fairness” and “transparency” and asking a simpler question. “How do different listing strategies affect price discovery?”
This is a problem I studied first hand. In “MLS Research: Measuring the Benefits of the Open Market,” my co-authors and I found that homes listed and sold on the MLS achieved significantly higher prices by approximately 13 percent after adjusting for property and neighborhood characteristics, reflecting broader exposure and competitive advantages.
Those discoveries remain important. They show that, all else being equal, public market participation enhances seller outcomes.
But the words “all else being equal” are doing a lot of the heavy lifting in this sentence.
The growing interest in private or gradual listings does not negate these findings. This reflects the recognition that how and when properties enter the market can determine the quality of price discovery itself.
It’s a matter of choice, not ideology.
Private listings are often described as exclusive or anti-consumer. That structure is too simple.
In fact, most properties that start out as private listings end up on the MLS. The question is not whether lists are shared, but when and under what conditions. Viewed in this way, private listing is more of a means of preparing for MLS than a departure from it.
Existing incentives and platform economics
To understand this resistance, it is helpful to consider the role of modern real estate platforms.
Online portals like Zillow, Realtor.com, Redfin, Trulia, and Homes.com are essentially MLS data aggregators. Its value lies in collecting comprehensive, real-time inventory and connecting buyers and agents.
Economically, these are two-sided platforms. Success depends on attracting both users and experts. In such markets, completeness and immediacy of information are not just features, but critical inputs.
Policies that require immediate MLS publication help ensure a steady flow of standardized data. In contrast, flexibility in the timing of listings can introduce variability and complicate aggregation.
Seen from this perspective, the emphasis on ‘transparency’ reflects not only consumer principles but also underlying economic incentives.
regulation and experimentation
Recent policy changes reflect this tension. The National Association of Realtors has relaxed its explicit cooperation policy to allow for “office-only” delayed marketing strategies.
At the same time, some platforms tie visibility to instant MLS participation, preventing such flexibility.
This creates a well-known trade-off.
Standardization promotes access and consistency. While its benefits are well documented in prior research, experimentation allows sellers to better position their properties before entering the broader market.
Both have value. The challenge is balance.
Price discovery and information timing
To see why this is important, go back to price discovery.
The listed price is not a fact, but a hypothesis based on comparison targets and judgment. True market value only emerges when buyers respond.
MLSs are very effective at amplifying competition once assets are exposed to the public. But how do sellers arrive at the right starting point?
When information is released all at once, especially at uncertain prices, expectations can be limited and coordination can be constrained. But a more gradual approach allows sellers to learn from early signals before committing to a widely visible price.
This reflects basic economic principles. If the information is incomplete, the order of its publication can affect the results (e.g. Joseph Stiglitz, Paul Milgrom).
Simple market example
Let’s say you’re a homeowner who plans to sell for about $900,000.
Rather than listing the property immediately on the MLS, the agent first shares the property with a small network of qualified buyers. It took several days to get feedback and multiple buyers indicated they were willing to pay extra.
This reveals new information about demand that was not captured by historical comparisons. Therefore, the agent updated their expectations and was able to sell it for $1 million via MLS.
With wide exposure at the most competitive stage, your property will attract multiple offers and sell at a premium, benefiting you.
Importantly, this outcome is not guaranteed, but rather that the process improved the initial value estimate. Immediate listing at $900,000 can lock in expectations and limit results…and to your detriment.
In this sense, staging enhances price discovery before the MLS amplifies prices.
seller’s stake
It’s easy to lose track of the seller.
For most households, their home is their largest asset. It makes sense to explore strategies that manage risk, protect privacy, and improve pricing accuracy. Being flexible in how you present your properties will not hurt your competition. Helps you prepare for competition.
Complements rather than substitutes
A private listing does not replace the MLS. These are usually preliminary steps in a broader strategy.
MLS remains the central mechanism for exposure and competition. What is evolving is the ability to introduce listings in a more gradual and information-driven manner.
This is not a mess. It’s sophistication.
The debate over private listings is often framed as transparency versus consumer protection. These concerns are important, but they are not the whole story.
At a deeper level, the question is how information enters the market, how prices are discovered, and how institutions shape that process.
This perspective is consistent with, and informed by, my previous research. The evidence remains clear. Extensive use of MLS increases competition and improves results.
What this discussion adds to is the recognition that the path to exposure is also important.
If MLS is the driving force behind the competition, staging is also part of the adjustment.
Properly understood, a private listing is not a replacement for the MLS. It helps improve the functionality of the MLS by improving the conditions under which price discovery is initiated.
After all, in the marketplace as well as in the classroom, the goal is not to control all the answers in advance, but to create the conditions for better answers to emerge.
Dr. Kevin C. Gillen is a principal investigator at the Wilbur C. Henderson Real Estate Institute and an adjunct professor of finance at Drexel University. This is the opinion of Kevin Gillen and not necessarily the opinion of Drexel University or the Henderson Real Estate Institute.
