Recently, a national real estate brokerage filed a lawsuit against Zillow, which has garnered national attention. The suit challenges a new rule Zillow is implementing, which requires that any listing receiving public marketing be uploaded to Zillow within one day. If the listing isn’t uploaded within that time, Zillow won’t allow it to be displayed at all.
Zillow argues that its rule is better for consumers because it ensures all buyers have access to every available listing. The brokerage’s suit claims Zillow’s new rule forces home sellers to have their listings displayed on Zillow’s websites and limits options for how a seller wants to market their home. This raises a bigger question: Why wouldn’t a seller want their listing to reach the entire market? And, more critically, is it truly in the seller’s best interest — or the broker’s — to limit market exposure?
Locally, REALTORS must follow a “Clear Cooperation” policy mandated by the National Association of REALTORS (NAR). This policy was introduced because listings were excluded from Multiple Listing Services (MLS) and shared only with a small group of agents and buyers during periods of low market inventory. The policy aims to benefit homebuyers and sellers by providing maximum exposure for listings, ensuring that local real estate markets serve consumers as effectively as possible.
Listings that hit the open market have greater exposure to buyers searching for a home. This can increase the likelihood of multiple offers, leading to better terms and a higher selling price for sellers. A 2021 study by NAR found that homes listed in the MLS and given full market exposure sold for 17 percent more on average than homes sold off-market. Selling on the open market is the best way to maximize the sale price by encouraging competition and increasing market visibility.
While selling a home off-market doesn’t violate Fair Housing laws, the way the sale is conducted can. Limiting exposure to the open market can inadvertently reduce access for people in protected classes, potentially leading to Fair Housing Act violations. Even if unintentional, such practices can be interpreted as steering or discriminatory exclusion.
A seller may also receive better representation from their agent with an open market sale. Missouri real estate law permits dual agency, which means the same agent or brokerage represents both parties in a transaction, provided both parties agree.
There can be advantages to dual agency, such as potentially more negotiable commissions and more streamlined communication between the buyer and seller. However, conflicts of interest can arise, and a dual agent has a limited fiduciary duty to both parties, which can reduce the level of advice an agent can provide. Dual agency can also potentially benefit the selling agent more than the seller if they receive a commission from the buyer and seller for the same transaction.
Off-market sales may appeal to sellers seeking privacy, fewer showings, or a quick sale. But these perceived conveniences often come at a hidden cost: lower sale prices, increased legal risk, and reduced professional guidance.
For most sellers, the advantages of going to the open market far outweigh the drawbacks. Broad exposure attracts more buyers, creates competition, and increases the likelihood of a smooth and profitable sale.
