Zillow shocked the industry last week when it acknowledged that it hadn’t actually begun enforcing its new rules banning certain private real estate listings from later appearing on Zillow in Chicago.
That came with another surprise: Chicago isn’t alone.
Zillow hasn’t publicly said which markets include some type of private listings that are still being shown on the portal. It instead said in a fiery statement that Chicago was “one of the very last markets” where its controversial policy was not yet being enforced.
The surprise in Chicago — which has long used a private listing network facilitated through the MRED MLS — along with the acknowledgement that the policy isn’t being enforced in all markets, highlights the complexity of implementing a blanket policy on a network of hundreds of thousands of agents and hundreds of multiple listing services nationwide.
Eric Stegemann | CEO, Solid Earth
“It’s incredibly complicated,” said Eric Stegemann, an MLS expert and CEO of Tribus Group. “How do you know that a listing wasn’t entered into the MLS before it was publicly marketed later on? The enforcement action of that is difficult. My guess is they said, ‘You need to do this.’ Whether it’s actually been checked, I don’t know the answer to that question.”
Chicago isn’t the only market with a network that allows agents to share listings without adding them to a public MLS or a portal like Zillow or Redfin.
Inman confirmed with real estate professionals in San Antonio that LERA MLS users have access to, and commonly use, a private listing database (PLD) that allows them to market listings without sharing them via the public MLS. The network was described as similar to one in Chicago.
In a brief statement to Inman, a Zillow spokesperson said that its Listing Access Standards “have been live in San Antonio since the summer.”
Yet the San Antonio Board of Realtors and a representative from LERA said they hadn’t heard of any enforcement actions by Zillow blocking listings that start in the PLD and end up on the MLS, and other agents and brokers confirmed that checking the private listing database is a common business practice for agents in the region.
“There’s no indication that Zillow’s policy change has affected our subscribers’ listings, and we’ve received no related reports,” Keith Jones, COO of LERA MLS, told Inman in a statement.
Zillow didn’t respond to a request for comment about where it has yet to begin enforcing its standards. It also won’t share data on how many listings have been banned from its platform for violating the policy.
But the acknowledgement in Chicago, and the apparent lack of enforcement in other markets, show that Zillow’s ban on publicly marketed private listings — which has become a flashpoint in the industry — may be more difficult for the tech company to implement than it once seemed.
At stake is whether the business strategy of scores of agents will be disrupted as part of Zillow’s stated goal of providing consumers with access to the broadest possible number of real estate listings via its platform.
Chicago. Credit: Pedro Lastra / Unsplash
Difficult to enforce
In early November, MRED sent a statement to its managing brokers suggesting that Zillow was at risk of losing access to listings across the third-largest market in the country.
“MRED has made it clear to Zillow that selectively excluding certain listings may violate MRED’s rules,” MRED’s email to its brokers said, “as well as the terms of Zillow’s license agreement with MRED, which requires Zillow to access and display all licensed listings without bias or restriction.”
Zillow’s response included the first public acknowledgement that it had yet to begin enforcing its private listings rule in all markets, despite widespread reports that the controversial ban took effect June 30.
Other real estate professionals in San Antonio said there had been no apparent change to the region’s commonly used private listing database, which is described as a tool for subscribers to create private listings visible to all LERA members but not syndicated through an IDX.
“A lot of people are like, ‘I won’t put the sign up, but I’ll put it in a private MLS,’” said Ryan Cover, a sales coach with the Neal & Neal Team in San Antonio. “A lot of people want to put it on the market, but they haven’t found the right home yet. But they’ll market it for the agents to see if they have a serious client looking in a neighborhood. That’s a really big appeal.”
While Zillow’s policy states that the platform will ban listings that are shared outside of an individual brokerage and marketed for more than a day without being put on the public MLS, listings in LERA’s PLD can remain private indefinitely. They can then be moved to a public-facing general listing database.
Zillow’s policy allows for office exclusives — which NAR defines as private listings that aren’t shared among MLS participants and subscribers — but only if the listing isn’t shared outside the listing brokerage.
Reagan Williamson, broker of record with Homecity Real Estate in San Antonio and secretary/treasurer of LERA MLS, said the database was similar to MRED’s private listing network.
“Our private listing network is used a lot. The only persons who have access to the private listing database are subscribers to the MLS. That’s it,” Williamson said. “There’s no shareable link from the PLD out to the general public.”
Williamson said the private database was built in response to the original Clear Cooperation Policy enacted by the National Association of Realtors.
San Antonio | Image via Canva
“With Zillow being a broker in the state of Texas, they can access it, they just can’t aggregate it out,” he added. “I haven’t heard anything from Zillow. I don’t know how they’re going to monitor this nationwide.”
An industry flash point
Zillow’s policy has ignited one of the most heated debates in the real estate industry today.
The policy was created at the same time that Compass was working to create a broad network of listings that were only available through Compass agents. Listings within that network aren’t on a public MLS, and the existence of the network itself is marketed publicly to consumers.
Compass sued Zillow in an attempt to block the policy, calling the portal a monopoly and saying its policy limits consumer choice.
Compass is the largest brokerage in the U.S. and, after acquiring @properties earlier this year, has the largest market share in Chicago.
