The Private Listing Gap: How Off-MLS Networks Are Quietly Costing Minority Sellers Thousands

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Black and Hispanic home sellers are being steered toward private listing networks at rates three times higher than white sellers — and they consistently receive less money for their homes when they go that route. That combination of differential steering and measurable financial loss is no longer just a fair housing debate. It is the central thread running through a cascade of regulatory actions, the most recent being Compass's October 16 filing of a federal antitrust lawsuit against California Regional MLS and its pledge to cover certain agent fines — a direct escalation in a legal conflict that now spans federal courts in Chicago and Los Angeles, state-level inquiries in New York, and active scrutiny in both chambers of Congress.

A 50-Point Racial Gap in Agent Recommendations

The foundational data point comes from a survey of 2,087 home sellers conducted by The Harris Poll on behalf of Zillow in January 2025. The racial gap in agent recommendations toward private listing networks — where properties are marketed exclusively within a brokerage's own agent ecosystem before reaching the MLS — was roughly 50 percentage points wide between Hispanic and Black respondents on one side and white respondents on the other.

Zillow's own commercial incentives matter here: the company profits when more homes flow through MLS-connected portals it operates, giving it a financial reason to publish research critical of private networks. The survey also captures what sellers reported hearing from their agents, not documented evidence of discriminatory intent. And a portion of the gap may reflect the recent surge of first-time sellers from Hispanic and Black households, who are more likely to rely entirely on their agent's guidance. None of those caveats erase the pattern — they clarify what kind of proof it provides.

The Measurable Price of Going Off the MLS

Zillow's pricing data runs parallel to the steering findings. In majority-Hispanic neighborhoods, the median difference between off- and on-MLS sale prices was 4%, or $13,728 per home. Majority-Black neighborhoods saw a 3.1% gap, worth approximately $5,576 per transaction, while majority-white areas lost a comparatively small 1.2%. The typical seller across all groups who chose an off-MLS route forfeited about $4,975, contributing to a collective national loss exceeding $1 billion over 2023 and 2024.

The mechanism is straightforward: a home marketed only inside a single brokerage's private network reaches a smaller pool of competing buyers. Less competition typically produces lower offers. As Zillow's senior economist Orphe Divounguy stated in a report, the data is unambiguous that selling off the MLS costs home sellers in communities of color thousands of dollars in lost value.

University of North Carolina professor Elizabeth Korver-Glenn has offered an additional structural explanation: agents draw on their own social networks to generate listings, and because those networks are racially structured, private listings end up disproportionately excluding Black, Hispanic, and Asian consumers — not through explicit intent, but through the architecture of who knows whom.

Compass Escalates the Legal Fight in California

Compass International Holdings completed its acquisition of Anywhere Real Estate on January 9, 2026, making it the country's largest residential real estate firm with more than 340,000 agents and franchisees across brands including Coldwell Banker, Century 21, Sotheby's International Realty, Corcoran, and its own Compass brokerage. Before that merger closed, a February 2025 earnings call showed that roughly 35% of Compass's then-22,138 active listings were sitting in its "Private Exclusive" or "Coming Soon" phases — pre-MLS channels accessible only within the Compass ecosystem or on its own platform.

CEO Robert Reffkin has publicly targeted 30% market share in 30 markets, and an April 2026 Consumer Policy Center report analyzing 5,000 recent home sales found the combined Compass/Anywhere entity already controlled between roughly 30% and 39.5% of unit sales in Boston, Chicago, and Washington D.C., with 29.7% in both San Diego and Austin.

On September 8, 2026, Compass sent a formal demand letter to California Regional MLS (CRMLS) — the nation's largest MLS, serving more than 110,000 real estate professionals — ordering it to stop fining agents who publicly market office-exclusive listings. When CRMLS refused, it moved first: on October 5, the MLS filed a 119-page complaint in federal court in New York seeking a declaration that its cooperation rules are lawful and a permanent injunction blocking Compass from bringing antitrust challenges against those rules.

Eleven days later, on October 16, Compass filed its own federal antitrust lawsuit against CRMLS in Los Angeles, seeking a court order ending the rules along with treble damages. The company simultaneously announced it would cover qualifying fines issued by CRMLS to agents at its company-owned brokerages — Coldwell Banker Realty, Compass, and Sotheby's International Realty — who publicly market homes at a client's written direction.

Federal Court Hands Down a Mixed Ruling in Chicago

The legal battleground with the longest paper trail is Chicago, where Zillow filed a federal antitrust lawsuit against Compass and Midwest Real Estate Data (MRED) on May 12, 2026, alleging coordinated efforts to withhold listing data and pressure Zillow to display private Compass listings in violation of its own transparency policies.

In September, Judge John Tharp denied Zillow's request for a preliminary injunction, finding the portal had not made the required strong showing on its Sherman Act claims. The court also sent Zillow's claims against MRED to private arbitration. Crucially, the judge stayed the claims against Compass as well, finding the factual and legal issues surrounding both defendants substantially overlapped. The next phase of the dispute will largely move outside federal court, with no clear timetable yet established for the arbitration proceedings.

Congress and the New York Attorney General Step In

At the congressional level, Scott Fitzgerald (R-WI), chairman of the House Judiciary Subcommittee on the Administrative State, Regulatory Reform and Antitrust, sent separate letters to Reffkin and MRED CEO Rebecca Jensen on July 22, summoning them for a briefing and requesting information about the competitive impact of their private listing partnership. Two weeks later, on August 6, Sen. Elizabeth Warren (D-MA), ranking member of the Senate Committee on Banking, Housing and Urban Affairs, sent her own nine-page letter to Reffkin and Jensen, warning that the Compass-MRED partnership "increases risks of civil rights violations" under the Fair Housing Act.

New York Attorney General Letitia James opened a formal antitrust inquiry into Compass's footprint in the New York market in early June, with investigators reaching out to leaders at multiple top brokerages to collect information about how the firm operates in the city. The inquiry has no defined scope or publicly announced endpoint, and Compass declined to comment on the matter.

Compass's Defense — and Why the Price Gap Remains

Reffkin's public defense rests on two pillars: seller choice and eventual MLS entry. He argues that roughly 94% of Compass's private listings ultimately reach the MLS, and that the pre-marketing phase protects sellers from accumulating days-on-market history before they are ready for full exposure. The company also retained a fair housing attorney to review the disclosure tools built into its private listing search interface.

Those arguments address intent. They do not address outcome. Fair housing law under disparate impact doctrine can produce liability when a practice generates racially discriminatory results even in the absence of discriminatory purpose.

68% of sellers who had worked with a real estate agent said that agent never explained the difference between the MLS and a private listing network. Sellers who are unaware that accepting a private-network recommendation may cost them thousands in final proceeds are not exercising informed choice — they are deferring to an advisor who may have competing interests, including the possibility of capturing both sides of a transaction within the same brokerage network.

For any seller approached with a private listing recommendation today, the minimum protection is a written comparison: what a comparable MLS listing would be expected to yield in that specific neighborhood, alongside a clear disclosure of any financial incentive the agent or brokerage has in keeping the home off the open market.

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