Why This Recent Pocket Listing Study Is Both Right and Missing the Bigger Picture and Why I Believe Some Are Intentionally Misrepresenting the Findings...

by Brian Durham

Let’s start with something I think most people will overlook when reading this study.

This research is based on data from Texas. However, Texas is a non-disclosure state, and I contend that makes a difference.

Now, I already know the pushback…

“Agents still have access to MLS data, so it doesn’t matter.”

That’s partially true, but it misses the bigger point.

This isn’t about whether agents can see data.

It’s about how the market's structure potentially changes behavior when data is not universally accessible.

In disclosure states like Minnesota:

Sale prices are public record
Consumers can verify pricing independently
The MLS acts as a shared, trusted source of truth
Pricing strategy is anchored to widely available data

In a non-disclosure state:

Sale prices are controlled within brokerage and MLS systems.
Consumers rely more heavily on agents for pricing insight.
Data is harder to access and less verifiable outside of professional networks.
Private networks have greater influence on value.

That creates a different environment.

Not because agents lack data, but because data control is more concentrated in that model.

And that matters for a study like this, because pocket listings are fundamentally a strategy built around:

Limited exposure.
Controlled access.
Information gatekeeping.

So when you study pocket listings in a market where:

Data is already less transparent
Consumers are more dependent on agent networks
Off-market transactions are more normalized

You are not just studying the strategy.

You are studying the strategy in a system that is already built to support it.

And that makes it very difficult to apply those findings directly to markets where transparency through the MLS and public records is the foundation for how pricing and trust are built.

This isn’t a question of whether data exists. It’s a question of who controls it and how that control could shape behaviors.

What This Study Gets Right

There are parts of this study that I believe are very accurate. In fact, they confirm things I have seen firsthand over the years.

Negotiation leverage is real

When a property hits the MLS, it immediately enters a negotiation environment. Buyers expect to negotiate; in my market, they expect concessions, and they want to “win”.

When a deal is done off-market, that dynamic changes. The buyer is being given what feels to them special access, not opportunity. Sometimes that special access has value.

That part is real.

Certainty carries a premium

The study highlights what I would call a certainty premium. Buyers are willing to pay to avoid competition.

Just as sometimes sellers will take less for the certainty of a cash offer.

I have seen this play out over and over again. The ability to secure a property before it hits the MLS changes behavior.

Luxury behaves differently

According to this study, luxury sellers use pocket listings less often, but when they do, the premiums are higher.

That makes sense. At the high end, privacy and relationships sometimes matter more than raw exposure.

Where This Study Falls Short

Now, let’s talk about where, in my opinion, this study either misses the mark or does not go far enough.

The problem we can’t solve: the missing multiverse

The biggest issue is not just timing or market cycles. It is something much more fundamental.

We will never actually know what the true outcome would have been.

The study compares pocket listing sale prices to MLS listing sale prices. But the same house was never sold both ways at the same time. At least not without a MCU style multiverse.

Without that, we are missing the most important piece: the true counterfactual.

What would that exact property have sold for if it had been exposed to the MLS, created competition, and gone through a true bidding environment?

We don’t know. And we can’t know.

Even with matching models and controls, you cannot fully replace:

Buyer psychology
Competition dynamics
Urgency created by exposure
Emotional bidding behavior

Those things are created by the market itself.

Exposure still matters

At its core, real estate is still driven by one fundamental principle from ECON 101: supply and demand.

The more qualified buyers who see a property on the MLS, the better the outcome for the seller.

More exposure can introduce more negotiation. That is true.

But it can also introduce something far more powerful competition.

When multiple buyers are involved, they are no longer negotiating only against the seller. They are also competing against each other.

Almost anyone who worked in 2020 remembers what that was like.

And that is what drives price.

There is a reason that broader research has consistently shown that properties with greater market exposure, particularly through the MLS, tend to outperform limited exposure strategies.

For example, data from the National Association of Realtors has consistently shown that For Sale By Owner (FSBO) homes sell for significantly less than agent-listed homes, often around 10 to 15 percent lower. The gap is not just about agent negotiation skills. It is about exposure, marketing reach, and access to the full buyer pool through systems like the MLS.

The takeaway is simple:

Limiting exposure may create control. But it often comes at the expense of competition.

DOM and price reductions are not the problem

The study places heavy emphasis on days on market and price reductions.

But those are not inherent flaws of the MLS or the open market. They are transparency features.

Previously, MLS systems did not prominently display days on market or price history the way consumers see today. Those features became more visible over time, especially as platforms like Zillow began providing that data way back around 2006, and as agent and consumer demand for transparency grew, the MLS began providing it as well.

MLS systems evolve in response to the needs and wants of agents and consumers.

So if days on market and price reductions influence negotiation, that is not a reason to limit exposure. That is a conversation about how information is presented.

Transparency is not the problem. It is part of a healthy MLS-driven open market. The MLS is still the only agnostic data provider out there.

The part the data can’t see

The study concludes that agency conflict is not driving outcomes.

But here is a critical distinction that needs to be made.

There is a difference between what data can measure and what actually happens in the real world.

Data can show:

Sale price
Representation structure
Transaction outcomes

But it cannot fully show:

Internal brokerage incentives
Recruiting strategies
Lead routing systems
Cultural pressure inside teams

I have personally experienced this during recruiting conversations as an agent:

“Come here, you will get access to all this off-market inventory if you join X.”

That is not about the client.

That is about control and stifling competition.

Those dynamics exist whether they show up cleanly in the data or not.

The absence of evidence in the data is not evidence that the behavior does not exist.

The Study Isn’t Biased, But It’s Incomplete

To be fair, I do not believe this study is biased against real estate agents or the MLS. In many ways, it actually validates that agents and the MLS can create value.

But it does have an academic blind spot.

In academia, if something produces a measurable outcome, especially if it aligns with the paper's thesis, it is often considered valid.

If a strategy results in a higher price, the conclusion becomes:

The strategy works
The market supports it
The behavior is rational

But that framework leaves out something critical.

Just because something works does not mean it is being used correctly.

The rational actor problem

The study assumes that everyone involved is acting rationally.

That means:

Sellers are maximizing price.
Buyers are optimizing outcomes.
Agents are acting purely in the client’s best interest.

But real estate does not work that way. If it did, I would not have had to sit in dozens of grievance review panels and ethics hearings on the state Professional Standards Committee over the years.

Real estate is emotional

Selling a home is not just a financial decision.

It involves:

Stress
Timing pressure
Life changes
Fear
Uncertainty

Buyers and sellers are not spreadsheets.

They are people with emotions.

Those emotions directly influence outcomes:

Sellers accept early offers for convenience
Buyers overpay to avoid missing out
Agents guide decisions based on experience, bias, or incentives

If you’ve ever represented a VA buyer in multiple offers, you know what I mean.

When you remove that emotional layer, you risk misinterpreting what is actually happening.

Where I Stand

I am not against pocket listings as a tool.

There are valid use cases:

Privacy concerns
Tenant situations
Unique circumstances

In fact, my MLS has a withhold option for these reasons, with a disclosure about the potential issues with a withhold. Any MLS could have that same thing.

I’m sure Tim Dain at Northstar MLS would be happy to talk about it with any MLS executive who might read this and does not have one. (Full disclosure, I am a current BOD member for Northstar)

But that is all very different than turning it into a strategy.

Open market (MLS) is still the best path, in my opinion

I firmly believe that putting a property on the MLS is the best approach for both sellers and buyers.

For sellers:

Maximum exposure
True competition
Market-driven pricing

For buyers:

Fair access
Transparency
Equal opportunity

That is how a healthy, open market functions.

What I do not support

I do not support:

Using pocket listings to double-end deals
Brokerages’ gatekeeping of listing data
Private inventory is being used as a recruiting tool
Strategies built around limiting transparency
Making financially based agreements to show exclusive data to this portal or that portal.

That is not innovation.

That is control.

For years, I have heard agents complain about “The MLS just sells my listings to X so they can sell leads back to me,” and that is simply not true.

There is a button you can push at listing time to prevent it from being shared with the portals.

But the Brokerages themselves decided to share those listings with the portals because the sellers want to see their listings there.

Because the seller wants as many eyes as possible to see their home.

The Bigger Risk

If the industry continues down a path of:

Fragmented data
Limited access
Private networks replacing open systems

We are going to see:

More lawsuits
More regulation
Less consumer trust

And that is not good for anyone.

I know plenty of agents now who think the MLS, Association, and their own Brokers have too many rules.

Just wait until the Government steps in, takes away that 1099 status, and makes everyone an employee of the brokerage.

Or, as I discussed in my previous article, the potential settlements I foresee if we stay on this road will dwarf the NAR one.

Final Thought

This study does a good job explaining how certain deals can produce different outcomes.

But it does not answer the most important question:

The question isn’t whether pocket listings can produce a premium.
The question is whether that premium is consistent, repeatable, and in the client’s best interest.

And until we can answer that, the open market (MLS) remains the best path forward for the vast majority of sellers and buyers.

If You Want to Talk About This, Let’s Talk

I heard a line from Rob Hahn a few months ago, and it stuck with me. “I have strong opinions that are weakly held.”

I love this because I feel the same way about most things.

Because if you can come to a conversation with facts and have an honest discussion, I will always come from a place of curiosity and with an open mind.

If you are an agent trying to navigate this, or a seller trying to decide what strategy makes the most sense, I am always happy to have that conversation.

To me, there is a right way to do this business.

And knowing the difference matters.

Paper in question for your review.

Study from Bright MLS.

Study from NNR MLS and Naniik.

FSBO vs Agent Sold selling prices. (See page 109)