As two real estate giants escalate a war over how homes should be listed for sale online, both sides say they鈥檙e acting in the interest of consumers.
Both sides also stand to make a lot of money if they win.
The issue intensified at the end of 2024, when Compass, the country鈥檚 largest brokerage by sales volume, began advising its sellers to use a three-phased marketing approach 鈥 making their homes visible only to Compass agents and clients as a 鈥減rivate鈥 listing, making them viewable only via聽, and reserving the option to later make them public on popular house-hunting sites like Redfin and Zillow.
In the real estate industry, listings are currency. Faced with thousands of them disappearing from its site, Zillow punched back.
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The Seattle-based company, starting at the end of June, said it聽聽from appearing on its site 鈥 an ultimatum it hopes brings an end to Compass鈥檚 practice of selectively sharing listings before they appear on big search portals.聽聽will follow with a similar ban in September.
Then Compass filed a lawsuit against Zillow over its policy to ban private home listings. 鈥淭he Zillow Ban seeks to ensure that all home listings in this country are steered on to its dominant search platform so Zillow can monetize each home listing and protect its monopoly,鈥 Compass said in the lawsuit. A Zillow spokesperson said Monday that the company believes the lawsuit's claims are unfounded and that it will vigorously defend against them.
Each of these housing market players pitches itself as a pro-consumer brand. Compass says its selective marketing approach offers sellers privacy and control. Some sellers want to market to more exclusive groups before their home appears on big listing sites, which feature details like days on market and price cuts, which can signal a seller is willing to negotiate on price.
Zillow and Redfin say they are for transparency in the market, which is good for both homebuyers and sellers. The only way to know a home鈥檚 true price, they argue, is to advertise it as broadly as possible.
But Brian Boero, chief executive of 1000watt, a marketing agency for residential real estate companies, says their pro-consumer stances are largely just messaging.
鈥淭hese companies are using the consumer as almost like a human shield here to protect their business interests,鈥 Boero said. 鈥淭hey may believe these things sincerely, but this is first and foremost about rational self-interest.鈥
Should Compass win the private listings war, it would upend the paradigm in home listings that buyers have grown used to over the last two decades.
When Zillow and Redfin arrived in the mid-2000s, they promised to democratize the home search, pulling back the curtain on a market once controlled by agents and the local databases they operated called multiple listing services. For buyers, the experience changed overnight: Homes that were once buried in classified ads or hidden in books that could be viewed only alongside a broker were suddenly just a click away.
Sellers鈥 agents at first rejoiced 鈥 they didn鈥檛 have to work as hard to advertise their properties, and listing on the sites was free.
But someone was paying: buyers鈥 agents. When a prospective buyer clicks a listing鈥檚 鈥淐ontact an Agent鈥 button, Zillow or Redfin sells that inquiry to a paying agent. They also take as much as 40% of the agent鈥檚 commission if they close the sale. Brokerages like Compass have long bristled at the steep fee.
But as home sales drag for a third straight year, Compass is trying to change the game. By publishing listings exclusively on , it cuts out the referral middlemen.
鈥淥rganized real estate has been implementing rules that have been stripping homeowners and their agents of flexibility and choice,鈥 Rory Golod, president of Growth and Communications at Compass, said in an interview. 鈥淭hey are trying to monopolize where inventory goes and how people sell.鈥
Redfin and Zillow, of course, have their own interests to protect 鈥 as well as the model that鈥檚 come to shape the modern home-buying experience.
鈥淭his isn鈥檛 just about Zillow or Redfin 鈥 the internet has changed home search for the better, where every buyer can have access to all of the inventory,鈥 said Joe Rath, Redfin鈥檚 head of industry relations. 鈥淕atekeeping in any form is antithetical to the internet.鈥
Matt Kreamer, Zillow鈥檚 spokesperson, said transparency is core to Zillow鈥檚 philosophy: 鈥淲e believe that home listings that are available to some buyers should be available to all buyers,鈥 he said.
Their calls for openness also happen to preserve their business: more listings, more traffic, more fees.
Ultimately, Boero, the marketing chief, believes that Zillow鈥檚 market power will force Compass to blink.
鈥淶illow is the most powerful brand in the history of housing,鈥 Boero said. 鈥淵ou just can鈥檛 imagine not having your home on Zillow as a home seller 鈥 it sounds like a stupid thing to have happen.鈥
But others see an opportunity for Compass to prevail in bringing traffic directly to its site.
鈥淪outhwest Airlines didn鈥檛 sell tickets on any of the online aggregators for years, and they鈥檙e doing great,鈥 said Mike DelPrete, a real estate tech consultant. 鈥淧eople look at multiple sources.鈥
The dispute appears to be heading toward a compromise that would allow both Compass and the listing aggregators to uphold their business models, rather than a solution centered around buyers and sellers.
Redfin鈥檚 Joe Rath said his company would be open to hiding certain data, like days on market and price drops, if that鈥檚 what it took to keep listings public. 鈥淲e would much rather give ground there and have the listing,鈥 he said, 鈥渢han not have the listing at all.鈥
