REBNY considers major change to whisper listings agreement

Faced with an uptick of “whisper listings” — for-sale properties that never officially hit the open market — the Real Estate Board of New York is taking a hard look at the rules governing how residential agents share information with each other.

Members of REBNY’s residential board of directors are considering a proposed change to the universal co-brokerage agreement that would require agents to refuse a listing if the seller wants the property marketed privately, sources said. Under the current agreement, agents are supposed to share listings with other REBNY members as soon as they show the property or list it on a public website — the exception being when a seller explicitly requests otherwise.

The possibility that REBNY would put the kibosh on whisper listings has incited a fierce debate among brokers who argue that there are legitimate reasons why a seller would not want their property listed publicly. For instance, if a seller is a public figure, they may prefer to keep their property listing off the market because of security concerns. And those brokers said it’s not the board’s place to decide what’s best for those sellers.

“You can’t legislate what the seller wants to do,” said one brokerage chief. “I’m doing what my seller wants, not what REBNY wants.”

However, not all members of the residential board agree. “A lot of people feel that whisper listings don’t properly [serve] the greater good,” said one member, who spoke on the condition of anonymity. “When a brokerage has a whisper listing that they share with some but not all members of the industry, it doesn’t give the seller the widest exposure to the greatest audience.”

Elizabeth Ann Stribling-Kivlan, president of Stribling & Associates, said she personally doesn’t like whisper listings because when fewer people see the property, fewer have the chance to bid on it. “It doesn’t lead to the highest and best price,” she said. “It goes against basic tenets of economics.”

“Unfortunately, some people think by showing them to a small network, that shows some type of power and influence,” she added. “Like, ‘If only a handful of people know, it must be uber elite.’”

Compass President Leonard Steinberg recognizes that privately marketing a listing at the seller’s request can be appropriate in some cases. Last year, he did that with a penthouse at 161 Hudson Street which belongs to Parag Pande, a former portfolio manager at the Blackstone Group. (After a few months off-market, the condo was officially listed for $20 million in May.)

But he generally steers sellers away from whisper listings, he said.

“Often my answer is, ‘Let’s imagine going to Christie’s to an auction and they only invited two people,’” Steinberg said. “What price would they get? How many people thought da Vinci’s ‘Salvator Mundi’ would go for nearly $500 million?”