Study Confirms What We’ve Known For Quite Some Time: Privacy Sells

A new independent academic study just validated the strategy we’ve been offering our clients — and the numbers are striking.

A finance professor at the University of Georgia recently published what may be the first truly neutral, independently funded economics study on the impact of private home sales. The paper analyzed over 700,000 transactions and arrived at a finding that surprised even the researchers: sellers who sold privately — without putting their home on the open MLS market — achieved prices approximately 1.7% higher than comparable homes that went through the traditional listing process.

For a $3 million home in Santaluz, that’s roughly $51,000 in additional value. For luxury properties in the $6 million range, the premium jumps to 8% — nearly $480,000 on that same home.

This wasn’t a study funded by a brokerage or a portal with an agenda. It was supported by a university research award, with no outside industry backing. And its conclusion cuts against decades of conventional wisdom in our industry.

Why Does This Happen?

The study identifies two key mechanisms at work — and both align with exactly what we see in the San Diego luxury market.

First, private sellers avoid the “price cut stigma.” When a home sits on the MLS and requires a price reduction, that history follows it everywhere. Buyers see it. They wonder what’s wrong. They negotiate harder. The study found that MLS-listed homes undergo price cuts 25.5% of the time. For private sales, that number drops to just 5.6%. Selling quietly protects your position — if the price doesn’t work, you simply try a different approach without leaving a public trail.

Second, private sellers capture closer to the full asking price instead of giving it away in negotiation. On the open market, your list price is essentially a ceiling. Buyers negotiate down from it — that’s how the process works. In a private sale, that dynamic changes. The sale-to-list price ratio for private transactions is 1.6% higher than for comparable MLS sales. Sellers essentially received their asking price. Traditional MLS sellers did not.

The researchers tested whether these results were being driven by agents “double-ending” deals for their own financial benefit. They weren’t. The benefit flows to sellers, not to agents.

The Compass Advantage: A Private Exclusive, 3-Phase Marketing Plan

Understanding why private sales work is one thing. Being positioned to actually execute them is another — and this is where working with the Gloria Shepard Team at Compass makes a meaningful difference for our clients.

Compass operates the largest private listing network in the country through Compass Private Exclusives. At the Seller’s option, before any home we represent ever appears on the MLS, it can be quietly introduced to a curated network of qualified buyers — agents, investors, and clients who are actively looking but whose needs never appear in a public search. This level of access represents a unique Compass advantage, often beyond the reach of standard brokerage networks.

Our approach is built around a deliberate three-phase marketing strategy designed to maximize your outcome at every stage:

This isn’t a workaround — it’s a deliberate architecture for protecting your negotiating leverage while reaching the right buyers at the right time.

What This Means for You

Whether you’re considering selling in the near term or simply want to understand all of your options, the research now backs what we’ve been advising our clients to help protect their property value: exposure and price are not the same thing. More eyes on your home does not automatically mean a better outcome. The right eyes — at the right moment — often does.

For a full copy of Darren K. Hayunga’s research paper click here. If you’d like to have a private conversation about what a phased marketing strategy could mean for your home specifically, we’re always happy to talk about your options so you can make a fully informed decision that’s in your best interest.