Zillow Study Highlights Significant Financial Losses for Off-MLS Home Sellers
A recent study by Zillow has revealed that home sellers who opted not to list their properties on the Multiple Listing Service (MLS) experienced over $1 billion in lost sale proceeds in the past two years. This loss was notably pronounced in communities of color.
Defining Communities of Color
For this study, Zillow identified communities of color as areas where the majority of households are led by individuals from Black, Hispanic, Asian American, Pacific Islander, or Native American backgrounds.
Analysis of Lost Revenue
In the years 2023 and 2024, sellers who did not utilize the MLS typically sold their homes for approximately $5,000 less than their MLS-listed counterparts, an average difference of around 1.5%. However, in communities of color, this loss increased to 3.2%, which is more than double the 1.2% loss seen in predominantly white neighborhoods.
Specific Financial Impacts
The study specifically highlighted that:
- In majority-Black neighborhoods, sellers who bypassed the MLS faced a median price difference of $9,851.
- In majority-Hispanic neighborhoods, this loss increased to $13,728.
“The data is clear that selling off the MLS costs home sellers in communities of color thousands of dollars in lost value,” said Zillow’s senior economist, Orphe Divounguy.
Advisory Trends Among Sellers
The research also found that Hispanic and Black home sellers are often more frequently advised to sell their properties off the MLS. A significant portion, nearly 75%, of Hispanic and Black sellers reported being recommended to use private listing networks, compared to only 24% of white sellers.
The Role of the NAR Clear Cooperation Policy
Amid the ongoing conversation on the National Association of Realtors’ (NAR) Clear Cooperation Policy—requiring that properties be listed on the MLS within 24 hours—Zillow has actively supported the initiative, citing the need for transparency in the real estate market.
Study Methodology
Zillow’s analysis encompassed 2.72 million sales transactions, where they compared homes sold via the MLS against those that were privately listed. The report defined privately listed sales as those marketed outside of the MLS until a purchase contract was finalized.
The study specifically filtered out factors such as new construction homes, foreclosure sales, and outlier sale prices, allowing for a more precise representation of the impact of listing methods.
Economic Implications
To measure the effects of the listing method, Zillow used its Zestimate home price from three months prior to the sale, applying adjustments based on market movements for accurate comparisons between the two selling methods.
Future Implications
The NAR is anticipated to vote soon on the potential repeal of the Clear Cooperation Policy, which could have profound implications for transparency and equity in home selling practices.
For more detailed insights on the study, visit Zillow’s official website.
