If you can’t see a home, you can’t buy a home: Lessons about transparency and consumer protection

States, fair housing and consumer protection groups, and members of the real estate industry itself are collaborating in a push to ensure that everyone has a fair shot at competing for any home that’s for sale, at the same time. 

In a recent Zillow webinar titled “Turning on the Lights,“ housing leaders and policymakers discussed how private listing networks (PLNs), which hide for-sale homes from the general public in favor of an exclusive network, are undermining market efficiency and consumer protection. Then, they turned to what can be done to help.

The webinar was hosted by Shireen Santosham, Zillow's director of public affairs, and featured a distinguished panel: State Rep. Scott Krug (R-Wis.), State Sen. Marko Liias (D-Wash.), HOPE Fair Housing Center Executive Director Michael Chavarria, and real estate compliance expert Summer Goralik.

“If you can't see a home, you can't buy a home.”

The consensus was clear: PLNs harm the very people the real estate industry is meant to serve.

• Buyers lose options: In an already supply-constrained market, selective access intensifies the problem. Private listing networks are not creating more inventory, “they're just changing who gets to see it,“ according to Goralik. Buyers lose options, and the process of getting people into their first home is slowed down.
• Sellers lose money: Zillow data shows that sellers who sell on a PLN lose out on exposure, which equates to an average of nearly $5,000 lost on each sale. As Goralik noted, sellers are often pitched “exclusive“ opportunities without clearly understanding the trade-offs, such as a smaller buyer pool and potential impact on the final sale price.
• Fair housing is undermined: PLNs risk a return to exclusionary practices. Chavarria said he’s “seeing a return to the days of that physical binder that real estate agents held and withheld from Black and Latino prospective buyers.“ Restricting who sees listings, especially with data showing homes in majority-white neighborhoods are more likely to be listed privately in some places, raises serious concerns about steering and equity.

This debate is not just an industry issue; it has real consequences for housing affordability and fair housing. Wisconsin and Washington have taken bipartisan action to rein in these practices.

A blueprint for other states

Krug and Liias shared their journeys to passing landmark, bipartisan legislation targeting PLNs to protect consumers in each of their states. Krug noted that discussions in state capitals are often less polarized than federal politics, and that this issue in particular transcends party lines. Liias agreed, emphasizing that the Washington law passed with only one dissenting vote because “it's about fairness, it's about transparency, it's about access, and in the housing market, we need all of those.”

• Wisconsin's approach: Wisconsin passed the first state law on listing transparency. The law targets public marketing: once a property is marketed anywhere, it must be entered into the MLS within one business day. The law also requires a standardized regulatory form to be presented to the seller, ensuring a conversation takes place about the risks and consequences of opting out of a full MLS listing.
• Washington's approach: Washington passed a robust bill stipulating that any time a broker markets a home, it must be visible to the public and to all other brokers at the same time. The only exception in the bill is for situations where limited marketing is necessary for health or safety concerns. 

For states considering similar legislation, Krug and Liias offered concrete advice on translating consumer protection principles into law:

• Build a broad coalition: Successful efforts rely on community-wide support. Liias specifically cited the importance of working with fair housing advocates and affordable housing groups, to build grassroots momentum.
• Act with urgency: Liias emphasized that it is critical to get ahead of this issue, noting that practices that are deeply rooted in the market will be harder to pull back. 
• Rely on other states as examples: Wisconsin and Washington had the difficult job of being first. As Krug noted, having a red state and a blue state as models will only make it easier for others to build a motivated coalition on this issue.

In the end, protecting the consumer

The goal of these bills is to ensure everyone has a fair chance to succeed. ”I'm talking to John and Judy Lunchbox, right?” Krug said. “They just want to know when their time is to come up, when their time is to see maximum profits, and when they're going to finally get ahead.“

A transparent market is a fairer market, and a fairer market is one where every family has a genuine chance to get ahead.