Connecticut will become the latest state to impose restrictions on private listings, with a new law requiring public marketing of residential real estate.
Gov. Ned Lamont signed SB 340 on May 27. The bill requires residential properties of up to four units to be openly marketed and publicly accessible to a multiple listing service or publicly available electronic listing service, unless the seller or landlord explicitly opts out.
The new law is aimed at private or “pocket” listings—or marketing a property to an exclusive group of brokers or prospective buyers, before the broader public gets a chance. Aimed at consumer disclosure, the bill threatens a fine of up to $5,000 or suspension of a real estate professional’s license.
The new law takes effect on Oct. 1.
State Sen. Tony Hwang, ranking member of the state legislature’s Insurance and Real Estate Committee, was one of the bill’s sponsors. Hwang said last month the bill responds to concerns from real estate agents in the state. The ban is part of a larger package of other real estate measures, including some continuing education requirements.
“These are practical, common-sense updates that support transparency, professionalism, and consumer confidence in Connecticut’s housing market,” Hwang, a Republican, said.
Meanwhile, the New York state Senate also advanced a similar bill on Tuesday, which would require listings to be publicly marketed on platforms accessible to the general public.
The New York bill has already passed the state Assembly, meaning it only needs Gov. Kathy Hochul‘s signature to become law.
This follows a similar ban on private listings in Washington, which was signed earlier this year.
Continued controversy
Private listings have engendered controversy in the real estate world. Fair housing advocates say they raise discrimination concerns. At least one study from Bright MLS found private listings take longer to sell and don’t guarantee more money.
As well, a study from Zillow found the sales price of such private listings was 1.3% less than comparable sales on the MLS, costing the seller an average of $4,230 per sale. (Realtor.com® recently struck an agreement with Zillow to show preview listings from brokers who participate in Zillow’s preview program, in an effort to boost market transparency.)
Lawmakers in Illinois and Hawaii have also proposed similar legislation to restrict private listings.
“In today’s constrained housing market, prospective buyers and tenants, including those using housing vouchers, may never have the opportunity to make an offer on a property for sale or lease simply because they were unaware it was available,” the Connecticut Realtors said in a statement backing the bill.
“This section ensures that sellers and landlords fully understand the consequences of limiting a property’s exposure and how, by doing so, they may be forfeiting an opportunity to negotiate not only a better price but also terms that would be most convenient and beneficial to them,” the statement said.
Get real estate news in your inbox
Tristan Navera is a senior reporter on housing policy, covering trends and solutions in the housing market from Washington, DC. He was previously a senior reporter at Bloomberg Law, and before that covered real estate for the Washington Business Journal. Earlier in his career, he spent a decade reporting on business and real estate in Dayton and Columbus, OH. A Cincinnati native, he holds a journalism degree from Ohio University.
