Zillow recently shook the real estate sector by declaring its intent to exclude certain property listings. According to the new rules, any listing that is openly marketed must be entered into an MLS (Multiple Listing Service) and shared on Zillow and other platforms receiving internet data exchange (IDX) feeds within 24 hours of initiating a public marketing effort.
The real estate community has been buzzing about the potential implications of Zillow’s aggressive strategy to uphold the troubled Clear Cooperation Policy and its effects on the NAR’s (National Association of Realtors) recent Multiple Listing Options for Sellers policy.
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Firm Advocates
Among the most outspoken proponents of the Clear Cooperation Policy (CCP) and Zillow’s new mandate are eXp Realty and NextHome. eXp Realty confirmed their agreement with Zillow’s policy, which is set to take effect on May 1 for both Zillow and Trulia, coinciding with Zillow’s announcement last Thursday. Leo Pareja, CEO of eXp Realty, expressed concerns to HousingWire about the increasing trend towards private listings, suggesting that the residential real estate market could become segmented like its European and U.S. commercial counterparts, where data is compartmentalized.
Pareja emphasized that such segmentation compromises seller visibility, potentially leaving money on the table, and restricts access for buyers, particularly those in vulnerable groups, to essential resources for financial advancement.
Following eXp’s lead, NextHome also endorsed Zillow’s initiative the next day.
James Dwiggins, co-CEO of NextHome, praised the initiative on LinkedIn, describing it as a decisive victory for transparency. “NextHome fully supports Zillow’s approach, which safeguards both homebuyers and sellers from the increasing greed and deceit within the industry,” Dwiggins stated.
Similarly, Redfin, soon to be acquired by Rocket Companies for $1.75 billion, adopted a comparable stance on Monday. Glenn Kelman, CEO of Redfin, announced that Redfin.com would not display any listings that were publicly marketed prior to being shared across all real estate websites through the MLS.
Kelman explained that this policy ensures all potential buyers have access to property listings and proposed that MLSs should develop a ‘coming soon’ status for listings that prevents search sites from displaying the duration a home has been on the market and its pricing history. He noted this approach differs from a similar proposal by Compass, which might restrict access primarily to agents within the listing brokerage.
Anthony Lamacchia, broker-owner of Massachusetts-based Lamacchia Realty, remarked that homeowners expect to see their properties listed on Zillow shortly after they appear on the MLS, and failure to do so leads to questions for their agents. “Zillow is aware of this and is leveraging their influence. I must admit it’s a smart move,” Lamacchia commented in a YouTube video, adding that ironically, Zillow’s action could inadvertently bolster structured real estate transactions, benefiting both buyers and sellers.
Zillow’s Commitment to Consumer Protection
The Consumer Policy Center (CPC) also supports this policy, viewing it as a countermeasure against efforts by Compass and other major brokers to dominate the residential brokerage market and establish private listing networks that disadvantage consumers.
Stephen Brobeck, a senior fellow at CPC, argued that such networks not only harm buyers and sellers by reducing market transparency but also stifle competition. “The U.S. Department of Justice should scrutinize these practices for potential antitrust violations,” Brobeck suggested, urging all brokers to back Zillow in maintaining market transparency and preventing market fragmentation.
Balanced Perspectives
While firms like NextHome and eXp Realty are clear proponents of Zillow’s policy, others like Keller Williams, RE/MAX, and Anywhere Real Estate have offered more reserved responses. Representatives from these companies acknowledged the importance of transparency and broad access to listings but also emphasized the importance of providing sellers with various marketing options and relying on agents to guide their clients in making the best decisions.
Challenging Zillow’s Stance
Conversely, CoStar, the parent company of Homes.com, has expressed strong opposition to Zillow’s policy. Andy Florance, CEO of CoStar, criticized the policy in a letter to agents, calling it a significant power maneuver. Florance accused Zillow of prioritizing its profits over protecting consumer interests by controlling how listings are marketed, which he argued was anti-consumer and anti-agent.
As Homes.com strives to become the leading listing portal, Florance promised a more agent-friendly alternative, ensuring that his platform would not take a cut of agents’ commissions nor sell buyer leads to other agents. “Zillow might be overreaching,” Florance stated, suggesting that agents might choose other marketing strategies, consequently diminishing Zillow’s influence.
While Compass has been critical of the CCP, it has remained silent on Zillow’s recent policy change. However, Compass CEO Robert Reffkin shared Florance’s letter on LinkedIn, endorsing Homes.com’s support for agents.
Evaluating Alternatives
While battle lines seem to be drawn, Move‘s Realtor.com, recently disengaged from a legal tussle with CoStar, has yet to declare a stance. “We are giving the matter careful consideration,” a spokesperson for Realtor.com stated, affirming their support for listing cooperation which ensures a fair and competitive market.
Further Analysis
Industry analysts are not overly concerned about Zillow’s new policy. Jake Fuller, an analyst at BTIG, described the policy as more of a preventative measure than a reactionary one. “This doesn’t signify a major conflict between Zillow and Compass or any other brokerage opting for an internal private listing network,” Fuller commented. He noted that the actual number of listings affected is relatively small and that there is likely room for negotiation and dialogue between the parties involved.
