Ed Neuhaus 
Lets talk about private exclusive listings. Or “pocket listings.” Or whatever euphemism the industry wants to use this week for keeping homes off the MLS.
I’m going to be blunt: private exclusive listings are a form of discrimination. Not always intentional. Maybe not even most of the time. But the effect is the same as if it were. And in 2026, with everything we know about how housing markets perpetuate segregation, that’s no longer an excuse.
And I’m going to explain exactly why you should be suspicious of any agent who tries to convince you otherwise.
This Isn’t About Seller Losses (Though Those Are Real)
A lot of the industry conversation around pocket listings focuses on money. And yes, sellers lose money when they keep homes off the MLS. Zillow analyzed 2.72 million transactions and found that off-MLS sellers collectively lost more than $1 billion. The average seller gave up about $5,000.
But here’s what matters more: sellers of color lost three times as much. Communities of color saw losses averaging $9,850 per home compared to $3,700 in majority-white neighborhoods. Majority-Hispanic neighborhoods? They lost 4% of their home value on average — about $13,728 per transaction. Majority-Black neighborhoods lost 3.1%, around $5,576 per home.
And here’s the part that should make every agent uncomfortable: 73 to 74 percent of Black and Hispanic sellers said their agent recommended a private listing, compared to only 24 percent of white sellers.
So yes, sellers lose money. But this isn’t primarily a story about seller losses. This is a story about who gets access to housing opportunities and who doesn’t. This is about recreating the exact gatekeeping system that Fair Housing laws were designed to eliminate.
The Legal Framework Already Exists
If you think I’m being dramatic, lets talk about the law for a minute.
The Fair Housing Act has four provisions that are directly relevant here. Section 3604(a) makes it illegal to “otherwise make unavailable” housing. Courts have interpreted that broadly — it doesn’t just mean refusing to sell to someone. It means any practice that effectively limits housing availability.
Section 3604(b) prohibits discrimination in the terms and conditions of sale. Pocket listings create a two-tier access system: one for people in the agent’s network, another for everyone else.
Section 3604(c) bans advertising or statements that indicate preference or discrimination. When you selectively distribute listings to a limited audience, that’s exactly what you’re doing.
And Section 3604(d) — this one’s important — covers misrepresentation of availability. The Supreme Court ruled in Havens Realty Corp. v. Coleman (1982) that buyers have an enforceable right to truthful information about housing availability. Pocket listings by definition withhold that information from the broader market.
But here’s the big one: you don’t have to prove intent.
Disparate Impact Means Effects Matter More Than Intent
In 2015, the Supreme Court ruled 5-4 in Texas Department of Housing v. Inclusive Communities that disparate impact claims are valid under the Fair Housing Act. Justice Kennedy wrote that the doctrine exists to address “unconscious prejudices and disguised animus that escape easy classification as disparate treatment.”
In plain English? It doesn’t matter if you meant to discriminate. If your practice produces discriminatory effects, you’re liable.
The test has three parts. First, the plaintiff proves an adverse disparate impact. We’ve got that — Zillow’s Chicago study showed homes in majority-white neighborhoods were 2.2 times more likely to be listed privately than homes in majority non-white neighborhoods, even after controlling for price, home type, location, and broker activity.
Second, the defendant tries to offer a legitimate justification. What’s the justification for pocket listings? “Seller privacy”? “Exclusive service”? Good luck making that sound legitimate when the data shows who benefits and who gets excluded.
Third, the plaintiff shows less discriminatory alternatives exist. The MLS is literally the less discriminatory alternative. It’s right there. It exists. It works. It’s designed specifically to make housing opportunities visible to everyone.
This legal framework isn’t theoretical. It’s settled law. And someone is going to connect these dots in court. Probably soon.
The Data Keeps Getting Worse
Orphe Divounguy, a senior economist at Zillow, put it this way: “Private marketing might sound appealing, but it risks deepening segregation and limiting opportunity, moving us further from the fair and open housing market consumers deserve. The data show clear disparities, and good intentions are no longer an excuse for expanding digital redlining.”
Digital redlining. That’s what we’re talking about here. This is redlining 2.0, except instead of literal red lines on a map, it’s algorithmic networks and private databases and “exclusive” marketing that just happens to exclude the same people who’ve always been excluded.
Michael Chavarria from HOPE Fair Housing Center said it clearly: “Homebuyers deserve the right to see all the homes available in an area — not to have those choices quietly made for them.”
And here’s the thing that should terrify every agent doing pocket listings: “Pocket listings will make it almost impossible for any victim of steering to identify it. How do you know what units you weren’t shown?“
Think about that. If a home never appears on the MLS, how does a buyer even know they were excluded? How do fair housing testers prove discrimination when the discrimination is invisible by design?
The “Seller Choice” Defense Doesn’t Hold Up
I know what some agents are thinking: “But the seller chose this. It’s their house. They have a right to sell it however they want.”
Ok. Here’s the problem with that argument: racially restrictive covenants were “voluntary” too. Property owners in the 1940s and 50s chose to sign contracts that prohibited selling to Black families. The Supreme Court ruled in Shelley v. Kraemer (1948) that those covenants were unenforceable, and then the Fair Housing Act banned them outright — regardless of intent, regardless of “choice.”
Why? Because the discriminatory effects outweigh any individual’s claim to “freedom of choice” when that choice perpetuates segregation.
And let me be honest about something else: in most cases, the agent has the financial incentive, not the seller. Pocket listings create opportunities for dual agency and double commissions. The agent gets to represent both sides and keep the full fee. That’s the business model here. “Seller choice” is often just a cover story.
The National Association of Hispanic Real Estate Professionals (NAHREP) said it plainly in April 2025: “The real estate market is on the cusp of the worst fair housing crisis since the 1960s.” They also said pocket listings were “one of the reasons fair housing laws were created” in the first place.
Before the MLS, This Is Exactly How It Worked
Here’s some history worth remembering. Before the MLS became standard, real estate was marketed through personal networks and “listing books” that agents shared by word of mouth. And during that era, the National Association of Real Estate Boards (NAREB, the predecessor to NAR) had a code of ethics that explicitly prohibited agents from selling to minorities. Article 34 of that code was in effect from 1924 until the 1960s.
That’s not ancient history. That’s within living memory.
The Fair Housing Act of 1968 was passed specifically to dismantle that gatekeeping system. The MLS became the solution — a centralized, transparent database where all homes would be visible to all agents and all buyers.
Pocket listings recreate the old system. Same dynamic, new technology. And the effects are the same too: homes flow through networks that are racially homogeneous, access is controlled by gatekeepers, and buyers of color get steered away from opportunities they never even knew existed.
Elizabeth Korver-Glenn wrote a whole book about this called Race Brokers (Oxford University Press, 2021). Her research showed that agents develop racially homogeneous networks, and pocket listings “facilitate the hoarding of resources within relatively racially-homogenous networks.” When White agents control access to homes through private channels, those homes stay in White networks. It’s that simple.
The Industry Knows This Is a Problem
In March 2025, NAR kept its Clear Cooperation Policy in place — the rule requiring agents to put listings on the MLS within one business day of marketing them anywhere else. They added a “delayed marketing” compromise, but they kept the core policy. Why? Because even NAR understands the liability here.
Zillow banned non-MLS listings entirely, effective June 30, 2025. Compass sued them. Guess what? The judge upheld Zillow’s ban just yesterday (February 6, 2026). Compass lost their injunction request.
States are legislating. Wisconsin passed Act 69 in December 2025. Washington advanced SB 6091 in January 2026. Illinois has HB 3452 in the works. This is happening at the state level because legislators see what’s coming.
And what’s coming is a fair housing lawsuit that someone is going to win. The legal framework exists. The data exists. The disparate impact is documented. It’s only a matter of time before someone connects the dots in court, and when they do, every agent and brokerage involved in private exclusive listings is going to have a very bad day.
Why This Matters to Every Agent and Seller
So here’s where I make this personal.
I’ve been selling homes in Texas for 15+ years. I understand the temptation. I get why some agents push pocket listings — the dual agency opportunity, the “exclusive” branding, the promise of privacy for high-end sellers. I’ve heard all the pitches.
But here’s what I believe: every seller deserves full market exposure, and every buyer deserves to see what’s available.
The MLS exists for a reason. It was created to solve exactly this problem — to make housing opportunities transparent and accessible to everyone. And when I think about the legal liability, the documented disparate impact, and the history of housing discrimination, it’s hard to see how any agent can justify participating in a system that recreates the same patterns Fair Housing laws were designed to eliminate.
At the end of the day, I want every client to know their home was seen by every qualified buyer. And I want every buyer to know they had access to every home on the market — not just the ones that fit an agent’s private network or business model.
Laurie Benner from the National Fair Housing Alliance said it perfectly: “When something is exclusive, that means people are being excluded, and historically in real estate, that has been extremely detrimental to huge swaths of people — particularly those in protected classes who are shielded by the Fair Housing Act.”
Exclusive means excluded. Always has. Always will.
What You Should Do
If you’re a seller and an agent pitches you on a “private exclusive listing,” ask them these questions:
- Who exactly will see my home?
- How will you ensure I’m getting maximum market exposure?
- Are you representing both sides of this transaction?
- What do fair housing advocates say about this practice?
- Are you comfortable with the disparate impact data on pocket listings?
If you’re a buyer and you suspect your agent is steering you away from certain homes or neighborhoods, ask to see the full MLS inventory. If they’re withholding listings or only showing you “exclusive” properties from their network, find another agent. You deserve access to everything on the market, not just what fits their business model.
And if you’re an agent reading this, here’s my challenge: look at the data and tell me with a straight face that private exclusive listings aren’t recreating the same segregation patterns that Fair Housing laws were designed to eliminate. Because I don’t think you can.
The Bottom Line
Private exclusive listings are discrimination. Not always intentional, but discriminatory in effect. The legal framework to challenge them already exists. The data proving disparate impact is overwhelming. State legislatures are acting. Major platforms are banning them. And eventually, someone is going to win a lawsuit that makes every agent and brokerage involved in pocket listings legally liable.
The question every agent has to answer is: which side of history do you want to be on?
Because in 2026, “good intentions” and “seller choice” aren’t good enough. The effects matter. The data is clear. And the path forward is obvious: transparency, equal access, and the MLS doing what it was designed to do.
If you’re looking for an agent who believes housing opportunities should be transparent and accessible to everyone, reach out to me. Lets do this the right way.
