Although it has been empirically shown that homes sold off-market—without being listed on the Multiple Listing Service (“MLS”)—tend to command significantly lower prices, few analyses delve into the underlying causality of the pricing disparity. While limited market exposure is an obvious factor, there is growing evidence to suggest that structural racial inequities embedded within off-market practices, may also be contributing to these disparate outcomes.  

It is well known that highly educated immigrants, and tech workers relocating to Silicon Valley, are an important, welcomed, and significant component of the buyer pool that have contributed to the high demand for Silicon Valley real estate.  Therefore, any practice that could exclude these potential buyers’ access to homes could result in a significant financial impact on the seller, not to mention a moral impact on society.   

Multiple studies have confirmed that homes not listed on the MLS consistently sell for less. A recent Zillow report released two months ago confirmed that off-market properties consistently sold for less than those listed on the MLS—with California exhibiting some of the steepest discounts nationwide.¹ Notably, this trend held across all price tiers—including the luxury segment—refuting the commonly asserted argument that affluent buyers will pay a premium for exclusivity. Over the 2023-2024 period, Zillow estimated that sellers lost over $1 billion in sales proceeds by forgoing the broader MLS exposure. Id. 

One of the most comprehensive analyses—comparing 840,000 on- and off-MLS home sales across multiple states over several years using data from Bright MLS—revealed similar results.² This rigorous study excluded flips, new construction, and intra-family transactions to ensure accuracy. It concluded that homes listed on the MLS sold for an average of 13.0% more than off-market properties. Id. This premium for being on the MLS rose to 19.7% during high-demand months such as spring, highlighting the value of broad market visibility. Id. 

Although it is inherently logical that reduced exposure and competition results in lower sales prices, what is less obvious is that the intentional concealment of certain listings from most interested buyers results in the disproportionate exclusion of home buyers who are newer to the community. While this excluded group includes many younger families from the tech community that are newer to this area, it also limits access to certain ethnic groups, reducing diversity and potentially creating unequal opportunities within the housing market. 

A Closer Look at Local Markets

To better understand the implications at a local level, we examined off- and on-market 2024 sales in Menlo Park and Palo Alto—two of Silicon Valley’s more active housing markets with a notable volume of off-market transactions. Smaller towns such as Atherton and Los Altos Hills were excluded due to a statistically insufficient sample size.  

The findings mirrored broader trends. In Menlo Park, homes sold off-market had a median sale price of $2,500,000, compared to $3,200,000 for homes listed on the MLS—a staggering 21.9% discount. Even measured by price per square foot, off-market sales lagged by 14.1%. 
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In Palo Alto, the discount was smaller, but still meaningful. Off-market homes sold for a median of $3,514,500, compared to $3,695,000 for those on the MLS—a 5.2% difference. On a per-square-foot basis, the gap was 5.7%. 
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Although I graduated from Stanford's Graduate School of Business, I am not a professional statistician. Further research should be done by statisticians to confirm and expand upon these findings. 

Limited Visibility, Limited Opportunity

Off-market listings often remain within an agent’s internal network—typically shown only to their own clients or, at most, to others within the same brokerage. Some agents use these secret listings as bait to attract buyers with the promise of lower prices due to reduced competition.   

Who Gets Access to Off-Market Properties?

Based on both industry experience and research, more traditional and long-established agents are more likely to promote off-market listings. For some, these listings offer a way to reduce marketing expenses while potentially increasing commissions, as off-market sales are frequently double-ended, meaning the same agent or brokerage represents both buyer and seller.  

The ease and lucrative nature of off-market deals are particularly attractive to veteran agents. These legacy professionals, who often share the same racial background as their sellers, may (hopefully unintentionally) perpetuate a lack of diversity and inclusivity within the pool of potential buyers. This raises the question: are off-market sales inadvertently excluding more diverse buyers? 

To explore this, I analyzed surname data from recent sales in Menlo Park and Palo Alto to identify potential ethnic representation differences between MLS and off-market transactions. An analysis of the data sets for Menlo Park and Palo Alto revealed a higher percentage of surnames associated with ethnic minorities among buyers purchasing through the MLS compared to those buying off-market properties. 

In Menlo Park:

• 58% of the 291 homes sold on the MLS had buyers with surnames associated with ethnic minorities. 
• Only 29% of the 48 homes sold off-market fell into the same category. 

In Palo Alto:

• 73% of the 366 MLS sales had ethnically diverse surnames. 
• Just 37% of the 52 off-market sales reflected the same diversity.
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These stark contrasts suggest that off-market transactions may inadvertently reduce diversity in homeownership by limiting access to a broader and more representative pool of buyers. 

The Ethical Dimension

These findings raise concerns on two fronts. First, it is well-documented through numerous studies that sellers typically receive less money for off-market sales. However, agents seeking a quick sale and potential increased commission due to double ending may not convey the significant financial implications of selling a home with such dramatically reduced exposure.  Additionally, the implicit discrimination observed, supported by the findings, elevates this issue beyond an economic problem to an ethical concern. If real estate agents are unintentionally contributing to discriminatory outcomes, it raises the question of whether such actions violate the ethical responsibilities of agents and potentially breach Fair Housing Laws. 

There is a strong societal interest in promoting a transparent housing market where all buyers have equal access to available homes. When brokerages encourage off-market sales due to their own financial interests, they are almost certainly breaching their fiduciary duty to their sellers. This practice can inadvertently limit exposure to a diverse pool of buyers, including many immigrants who contribute significantly to the innovation economy in regions like Silicon Valley. 

Toward a More Transparent Future

As a real estate professional who left a promising legal career at Wilson, Sonsini, one of the best law firms in the Nation, in search of a more principled calling, I am committed to a fairer and more open housing market. I believe that every buyer—regardless of their background—deserves equal access to opportunities. And every seller deserves the best possible result, not a discounted price resulting from hidden deals and limited visibility. 

The American Dream should not be reserved for the few who happen to be “in the loop.” It should be available to all. 

I am not alone in my concerns about these issues associated with these secret “office exclusive” listings. Here are some third-party articles that have explored this questionable practice: 

• Zillow. (n.d.). MLS & PLN sale price trends. Zillow Research.
• Haimerl, A. (2025, March 15). For sellers and buyers, realtors’ high commissions come under fire. The New York Times.
• Inman. (2025, April 16). eXp rolls out advisory forms for sellers considering a private listing.
• Avalos, G. (2025, April 17). Zillow sharpens battle lines in fight over private home listings. The Mercury News.
• Inman. (2025, April 17). NWMLS shuts off Compass IDX feed amid private listing conflict.
• Business Insider. (2025, April). Zillow’s new real estate agent listing rules could change how homebuyers search for homes.
• Swaminathan, A. (2025, May 5). A real-estate giant wants sellers to list their homes privately. Will homeowners benefit? Market Watch.
• BAM. (2025, April 16). Consumer Watchdogs Weigh in on Private Listing Networks.
• Selling Later. (2024, October 31). Skipping the Home Because Buyer Agent Commission Isn't Offered Upfront.
• BAM. (2024, August 23). Boycotting Listings? A Look at Homie’s Lawsuit Against NAR and Big Brokerages.