Does anyone remember the pet rock? When I was a kid, stores were selling it as a fluke. It was invented by an advertising executive as a joke of sorts for parents who didn’t want the work of pet ownership to give to their children. I even had one. It was literally a rock in a box on a cute little bale of hay.
Crazy as it may seem, this marketing gimmick made the inventor a fast millionaire. The public fell for the novelty of it all — but it wore off just as quickly. In the end, we all know a rock is not a pet, just like we all know that selling your home to get the highest price requires full-on exposure to the marketplace, not just privately inside one brokerage.
Private listing networks are a fad
Private listings networks are the latest pet rock — a fad for sure, created by a brokerage trying to outrun and outscale aggregators like Zillow. The spin is somewhat clever: Make it appear as if sellers need more choice, as if brokerages and agents aren’t doing that already and haven’t been for decades.
It doesn’t take a genius to understand that when you’re selling your home, you want to get the highest price. The central nervous system of the housing market is supply and demand, period. In a free and fair market, a seller offers their home to each and every potential buyer in the marketplace, in real time.
Price can only be unrestricted if the home is offered to the entire marketplace. Seriously, you don’t need Milton Friedman to tell you that having a pre-market or restricted market exclusive to one brokerage will most certainly deliver you a lower price.
Sellers decide where they want to expose their home for sale, and it is our job as professionals to educate them on the pros and cons. Maximum exposure will yield maximum price, but there are certainly exceptions where someone, usually with a high profile, wants their home sold quietly. And we do that. And we’ve always done that.
Remember your fiduciary duty
Be warned: If you put your home in a private listing network, you are signing up to an artificial market, a gimmick, and potentially not achieving the highest price possible.
Real estate agents should be warned because, as fiduciaries, this is a big disservice to your seller. I don’t care how you spin it: It’s a pet rock.
When real estate brokerages simply ignore the right thing and sell a narrative that benefits their bottom line of profits, growth and scale, the consumer will ultimately suffer. They are the ones who will pay for it in one way or another.
I encourage real estate professionals across the country to do the right thing and educate buyers and sellers correctly. The conflict between fiduciary duty and financial gain should be glaring to everyone. The pet rock had its moment. Let’s make sure private listing networks don’t.
Bess Freedman is the CEO of Brown Harris Stevens in New York City.
