“To protect its market dominance, Zillow has retaliated against competitive threats by enacting an exclusionary policy,” Compass argued in its lawsuit.
Zillow says its new listings policy, which is set to go into effect on June 30, is enforcing the National Association of Realtor‘s Clear Cooperation Policy and ensuring transparency in the market.
Redfin, which has taken a similar position, was named as a co-conspirator in the suit, but not a defendant.
Through its so-called “three-phase marketing plan,” Compass has challenged the status quo of real estate marketing in the U.S. The brokerage is pushing sellers to market houses exclusively through its portal, which allows them to test pricing and marketing without being subject to days on market and price cuts, which hurt sellers.
Under the three-phase marketing plan, a listing begins as an office exclusive, which is marketed in-house to Compass agents or sent privately to agents at other firms. From there, the listing moves to a “coming soon” status and appears on Compass’s website. Many MLSs nationwide allow coming-soon listings to be publicly marketed, but MLSs differ in how long a listing can remain in this stage.
If the listing fails to sell during the first two phases, it’s listed as active on the MLS. Compass’s data shows that in 2024, 94% of listings that began as private exclusives ended up on the MLS.
Compass currently has about 7,000 private exclusives.
Rivals argue that Compass is merely trying to double-end deals to increase profits. Zillow and a host of brokerage critics say that preventing listings from hitting the public undermines progress made in creating a more transparent market for consumers.
