Pocket Listings Raise Discrimination Concerns for Buyers, Fair Housing Advocates Say

Fair housing advocates are sounding the alarm about the growing prevalence of “pocket listings,” warning that the trend threatens to undermine decades of progress toward eliminating discrimination in the housing market.

Pocket listings, also known as private listings or whisper listings, are homes marketed privately rather than through public multiple listing services. They tend to be more popular with listing agents in large brokerages, allowing buyer's agents at the same firm first crack at a listing before it hits the market.

Such private listings are on the rise, with Bright MLS, the second largest multiple listing service in the nation, recently reporting that pocket listings, which historically accounted for about 2% to 4% of all listings, jumped to 8% in February, the latest available data.

For sellers, the main advantage of a pocket listing is privacy, allowing discreet homeowners to field offers without announcing their intent to sell their home to the general public—a tactic often used by celebrities or those with a high profile.

But such listings have long raised concerns for fair housing advocates, who fear that the rise of pocket listings could spur an increase in “steering,” the illegal practice of guiding clients toward or away from certain neighborhoods based on their race or other protected status.

For example, if a real estate agent shows a Black homebuyer only properties in a majority-Black neighborhood, but doesn’t share similar listings that otherwise meet their criteria in a majority-white neighborhood, it could be an example of steering.

“Pocket listings are going to create this ecosystem in which steering is much more likely, whether intentional or not,” says Michael Chavarria, executive director of HOPE Fair Housing Center in the Chicago area.

Chavarria, whose group investigates fair housing complaints, notes that pocket listings can also make it extremely difficult to detect and investigate potential instances of discrimination in home sales.

“Pocket listings will make it almost impossible for any victim of steering to identify it,” he says. “How do you know what units you weren't shown, if there's no place to ever publicly find information about the listing?”

Stephen Brobeck, a senior fellow at the Consumer Federation of America, tells Realtor.com® that his group is monitoring the subject of pocket listings as a potential area of concern.

“When consumers are not fully aware of marketplace opportunities, sellers have the ability to manipulate consumers for their own purposes,” he says. “Usually, the purpose would be making a quicker sale or earning more money. But, in a less transparent marketplace, any prejudiced sellers could harm certain customers in other ways.”

Industry groups raise concerns about pocket listings

Steering was a common practice in the early 20th century, contributing to the widespread racial segregation of residential neighborhoods in that period.

The listing technology of the period consisted of binders maintained by real estate agents, making it easy for unscrupulous agents to pick and choose which listings they revealed to certain clients.

Alongside redlining (race-based discrimination in mortgage lending) and racially restrictive deed covenants, steering was a key tool for maintaining racial segregation in that era.

However, the Fair Housing Act of 1968 specifically outlawed discrimination, including steering, in the sale or rental of housing, and the practice declined dramatically.

Today, with the advent of online real estate portals, the concept of steering may appear fairly antiquated to homebuyers, who have become accustomed to searching available listings on their own, and sending top picks to their agents.

But fair housing advocates say the rise of pocket listings threatens to reverse that progress by keeping more listings out of the public eye and under the control of agents who can decide who gets to see them.

“The Fair Housing Act compelled agents to open up these secret binders of listings to all buyers,” says Chavarria. “Now we're seeing a rollback, where we're creating this very opaque information stream that will create information asymmetry.”

In a recent statement, the National Association of Hispanic Real Estate Professionals argued that the rise of pocket listings was putting the nation “on the cusp of the worst fair housing crisis since the 1960s.” 

“The current trajectory, if unchecked, will lead to a two-tiered system that locks out many buyers and sellers,” the group said. “The practices of some large brokers, who seek to hoard listings and steer clients into dual agency agreements, must be stopped.”

NAHREP is calling on state and local lawmakers to pass legislation formalizing fair and transparent access to property information.

Courtney Johnson Rose, the immediate past president of the National Association of Real Estate Brokers, a prominent trade group for Black real estate professionals, has also spoken out against the rise in pocket listings.

“The idea of making listings exclusive and adding more pocket listings could lead to discrimination,” she told Real Estate News in April. “If I'm a seller and I only want my listing to be advertised to people of a specific demographic, I can do that through a pocket listing, or I can do that through an exclusive listing—I do see potential for fair housing issues.”

Illinois considers new rules

Brobeck, the consumer advocate, says that while pocket listings currently represent only a small minority of real estate listings, they could become an area of concern if that share grows.

“Specific impacts on consumers are not yet very visible,” he says. “But if a significant minority of sales were through pocket listings, everyone but the private listing brokers would be harmed.”

So far, no state has enacted a direct ban on pocket listings, but the legal framework around them is rapidly evolving.

In Illinois, the state General Assembly is considering House Bill 3452, which would require real estate agents to publicly advertise homes for sale, unless the seller signs a disclosure and opt-out form warning of potential financial downsides to private listings.

If passed into law, the legislation wouldn’t ban pocket listings, but would aim to ensure that sellers make an informed decision about avoiding public marketing of their home.

Chavarria strongly supports the bill, saying it offers enough flexibility to sellers with privacy or safety concerns, while discouraging agents from pressuring clients into a pocket listing that may not benefit them in the long run.

“What I love about the bill is, it's so common sense,” he says. “It's not that you can never do pocket listings. It's that you have to inform your client of the pros and cons so they can make an informed decision."