Private listings — the latest moniker for a pocket listing — aren’t anything new. They’ve arguably been around for as long as the organized real estate industry has existed, with agents offering them as an option to clients who need more privacy than the typical homeseller.
So, why is the industry in such a tizzy about them now?
That was the question at the center of a lively debate between Jason Oppenheim and Aaron Kirman, two of the luxury industry’s most visible brokers and thought leaders. Oppenheim and Kirman agreed that consolidation is at the core of today’s tensions around the practice, with mega firms having the opportunity to silo sizeable chunks of the market within private networks.
“I mean, obviously, it’s become a huge topic because of consolidation, and people are concerned with that level of consolidation and where it’s going,” Kirman said at Luxury Connect on Monday. “And I think, rightfully so.”
Oppenheim, however, was more pointed in his assessment, pointing directly at Compass as the source of trepidation about consolidation and private listings. The SoCal broker has been throwing daggers at Compass over the past year, accusing the firm’s founder and leader, Robert Reffkin, of hiding his personal aims under the guise of advancing homeseller choice.
“What really happened was consolidation and companies wanting to recruit agents, doubling more deals, and put smaller brokerages at a disadvantage. That’s the only thing that’s changed,” he said. “I actually think that sellers should have a choice. I guess my frustration with what’s going on is that, in my opinion, in 95 percent of cases, sellers shouldn’t be choosing this.”
“So pushing this option onto 100 percent of sellers, the way that I think Compass is doing, that’s where the problem lies,” he added, alluding to Compass’s 3-phase marketing plan that starts listings as a Compass Private Exclusive. If a listing doesn’t sell during the first phase, it becomes a Compass Coming Soon before moving to the open market.
Most listings, the firm said in the past, eventually reach full market syndication.
Kirman pushed back on Oppenheim’s idea that agents shouldn’t present private listings as an option to all of their sellers, saying that no one gets to “pick and choose” when to tell a seller about the tactic. The Christie’s International Real Estate of Southern California CEO said private listings put agents back in the driver’s seat, wrangling the control of data from portals.
“You have to have a stance. What’s good for one person may not be good for another person,” he said. “And in theory, we’re kind of saying the same thing here, right? I think at the end of the day, the bottom line is that we, as agents, have a fiduciary obligation to teach our clients and to let our clients make decisions that are right for them.”
“We, as an industry, need to recognize what’s right for the consumer. I think we need to recognize what’s right for the industry,” he added. “I actually think keeping the pocket listing actually not only helps the buyers and the sellers, but it actually keeps us at the forefront of our information. It keeps us innovative. It keeps us creative and keeps us away from, you know, companies like Zillow that take our information, force us to give it to them and then use it for their own work.”
Oppenheim and Kirman’s conversation then began to circle questions of fair housing, balancing privacy and transparency, whether a phased approach better matches today’s market conditions and whether that approach has become a crutch for agents who, in Oppenheim’s words, “don’t have the balls” to price correctly from the outset.
“I don’t know why we’re teaching agents that you don’t need to know how to price a house appropriately. You don’t have the balls to tell your seller it’s worth $4.5 million when he wants to list at $6 [million],” he said. “If we keep doing this, if we keep pushing these private networks onto 100 percent of our sellers, we’re gonna have massive class action lawsuits and regulation.”
“Sellers are going to sue by saying, ‘You convinced me to go [private]. I wasted six weeks. I waited,'” he added. “People are spending billions of dollars a year wasting their time for six to eight weeks on these private networks, overpriced because the agents don’t know how to get them to the market at the appropriate price.”
Kirman said Oppenheim was overblowing the legal risks, while cheekily suggesting that his co-panelist’s ire mainly comes from the consolidation risk that it poses to firms like Oppenheim’s — highly productive but still too small to withstand the pressure from a firm like Compass.
“My point is this: Yes, sellers should have a choice. I agree with that,” Oppenheim said after a funny — yet tense — back and forth with Kirman. “Just like going back to my initial example, sellers should have a choice of going on the MLS with one photo, but are you presenting as an option, or is Compass presenting as an option to all their sellers the option of just going on the MLS with one photo? No, they’re not.”
The duo ended the largely friendly debate with a couple of questions from audience members, both of whom shared Oppenheim’s concerns.
“I have a lot of out-of-town buyers coming in, and they’re connected with an agent, and they’re online searching,” said the audience member, who is a Compass broker. “When you think about this, when we’re restricting that information from consumers, I think that’s what Jason’s talking about as far as fair housing.”
“There is a subset of this market where we’re really shifting information and the availability to reach those opportunities from a huge group of people that don’t know,” they added. ” … I think that the point is that the seller should have that opportunity, but I don’t think that private is for everyone.”
Oppenheim and Kirman were ready for another round of debate, until the moderator announced the first day of Luxury Connect was coming to a close.
The last word, however, came from a departing attendee: “Get ’em, Jason!”
