If you’re on the market for a new home, you’ve likely already heard about whisper listings or pocket listings. But whatever you call them, you won’t find these listings on the MLS (multi listing service) or any of the popular real estate listing sites like ours that aggregate data from the MLS because that's the point—they are listings that are never publicly shared.

Gaining access to a whisper listing directly from an agent can be a great way to make a bid on a property without entering an aggressive bidding war. While this may sound desirable, whisper listings are also controversial. In fact, industry insiders are divided on the value they hold for consumers and agents alike.

Whisper listings have always existed, but recently, there has been an effort to crack down on these listings. In 2019, the National Association of Realtors (NAR) introduced the Clear Cooperation policy. The policy states that all listing brokers who participate in the MLS must submit their listing to the MLS within one business day of marketing the property to the public. In essence, the policy is designed to restrict whisper listings and, by extension, increase the surplus of available homes on the market. However, with or without the Clear Cooperation policy, whisper listings continue to impact the real estate market in New York City and nationwide.

Whether whisper listings are desirable depends on who you are and what you have to gain or lose from a listing never being widely publicized.

The consumers who have the most to gain from whisper listings are generally those buying and selling luxury properties. First, compared to the average consumers, few people searching for luxury properties begin their search by casually surfing the MLS or a listing site that relies on MLS data. Second, while open houses that attract many potential buyers are essential when selling most residential properties, open houses are uncommon in the luxury market. Finally, many luxury properties are sold and purchased by celebrities who typically prefer to close deals out of the spotlight.

Beyond the luxury market, however, buyers and sellers can benefit from whisper listings under some circumstances. On the buyer side, a whisper listing can be a great way to avoid ending up in a stressful or futile bidding war. On the seller side, a whisper listing can save one the time and hassle of preparing one's home to go on the market, staging it, and opening it up to the public for multiple open houses.

While whisper listings certainly can and often do serve consumers, it is important to recognize that may also limit consumer choice. Since the late 1990s, buyers have had unprecedented access to listing data, empowering them to do considerable research without the aid of an agent. Whisper listings reduce the average consumers’ access to listing data and ultimately make them more dependent on agents again. Likewise, on the seller side, whisper listings limit the number of potential buyers who ever hear about one’s available property, which can result in a lower closing price.

Whisper listings are generally embraced by agents and brokers and for an obvious reason. When a home sells, the commission is split between the listing agent and buyer agent. If a home never goes on the market, the listing agent generally represents both sides of the transaction and receives the full commission. For example, consider the following situation. An agent is working with a couple who want to buy a three-bedroom property in a specific zip code for just over $1 million, but this zip code currently has few properties for sale. The agent approaches a homeowner in the zip code who has a home that matches the couple’s specifications and lets the homeowner know how much the couple is willing to pay. If the homeowner agrees, the agent typically works with the seller and buyer and benefits from the full commission when the home sells.

While the above scenario may suggest that whisper listings are great news for agents, not all agents agree. At large brokerages, which list thousands of properties each year, whisper listings are generally welcome because agents don't always need to look outside their brokerage to find relevant listings to share with potential clients. At smaller brokerages, this is rarely the case. So, if larger brokerages such as Compass or Keller Williams aren’t required to share their listing data publicly, agents working for smaller and independent brokerages may end up with fewer listings to share with clients, which will ultimately affect their ability to close deals. This explains why NAR's Clear Cooperation policy is simultaneously loved and loathed by real estate professionals nationwide.

Whether you agree or disagree with whisper listings, one thing is certain—in a hot market where the housing surplus is low and bidding wars are common, whisper listings can be one way for buyers to get their foot in the door. At any time, for existing property owners who want to avoid the time, cost, and stress of staging their home and opening it up to the public, whisper listings can be a less stressful way to sell.

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