Thank you for this opportunity to submit testimony in support of HB4964, which would promote informed seller choice and also help prevent restrictions on buyer choice. I am Stephen Brobeck, a senior fellow at the Consumer Policy Center (CPC) and former executive director and CEO of the Consumer Federation of America. I’ve spent several decades researching and commenting on residential real estate brokerage issues. The CPC (www.consumerpolicy.org) is entirely funded by its fellows, who work pro bono, and receives no corporate funding.
Some brokerages are encouraging seller clients to privately list their properties. Certainly sellers should have that ability, but they should make that decision through an informed choice, not because of a hard sell by their agent. The enactment of a law similar to HB4964 would help accomplish that purpose. It would provide sellers with important information about the potential disadvantages of private listing their property. Sellers who permit their agents to undertake a limited search for buyers, especially if it is prolonged, greatly limit public exposure of that property, jeopardizing its sale price.
Compass Real Estate has led efforts to promote private listings while still allowing these listings on multiple listing services and real estate portals at any time. They are trying to have their cake, eat it too, and deprive others of pieces. When properties are privately listed, sellers lose access to many potential buyers while buyers are denied knowledge about all properties for sale, thus encouraging them to select a Compass agent simply to gain access to the company’s private listings. As my recent research report on the company revealed (https://consumerpolicy.org/wp-content/uploads/Compass-Market-Report-4.15.26), a key reason Compass is promoting private listings is to encourage double-ending – Compass agents representing both seller and buyer – which the company has acknowledged in a recent lawsuit, is highly profitable. This report also includes important information about Compass market share in Chicago.
More generally, enactment of a law similar to HB4964 would promote informed consumer choice and a more transparent residential real estate marketplace. Without its protections, there is likely to be a rush to private listings by many brokerages, balkanizing the marketplace so that buyers would face significant challenges in their search for a property. This balkanization would also make it difficult for buyer agents to provide information about a wide range of listings. I encourage the Illinois General Assembly to approve HB4964.
