Zillow’s now enforcing its listings ban: 3 things to know
As of June 30, home listings that aren’t widely available may be kept off the nation’s top search site, prompting a lawsuit from Compass and praise from others.
Zillow's new listing standards, announced in April, have set off waves of reaction — including a lawsuit filed by Compass, which is leading a vigorous defense of private listings.
But now, with Zillow beginning enforcement of its ban on listings that are publicly marketed but not widely available to consumers, here are three things to keep in mind.
Zillow's ban applies to listings, not homes: Zillow will bar noncompliant listings from appearing on Zillow.com and Zillow Group-owned Trulia.com. However, an address with a previously blocked listing can appear on the sites if a different broker presents it in a new listing that follows the rules.
Agents with listings deemed to be out of compliance were notified on May 28. However, even if agents have a listing out of compliance, they won't face consequences immediately. Starting June 30, "an agent's third non-compliant listing — and any subsequent non-compliant listings — will be blocked from Zillow and Trulia for the life of the listing agreement between that listing broker and seller," Zillow said in a blog post.
Also, all listings that meet the standards will be visible, even if an agent has violated the rules in the past.
A battle playing out in courts of law and public opinion: Compass filed suit against Zillow and its listings ban on June 23, with CEO Robert Reffkin claiming that the home search site is "abusing its monopoly power to ban homeowners and their agents" for marketing homes elsewhere. A few days later, Compass asked the judge to stop Zillow from enforcing its listings ban until the case is resolved.
On June 30, Compass released results of a survey of 1,000 homeowners and reiterated its call for "seller choice" while highlighting Zillow's impact. Among the findings:
90% of homeowners believe sellers should have the option to "pre-market" their home, with 81% saying they would be interested in pre-marketing if they personally were selling.
59% said they would prefer to work with an agent who can offer pre-marketing, with 27% having no preference.
76% agreed price reductions can make a seller seem "desperate," while 71% said they would rather not display recent price reductions if they were selling a home.
77% said they would be very or somewhat concerned if Zillow wouldn't display their home listing and 69% said they would choose an agent who could guarantee Zillow placement.
Meanwhile, industry leaders have been weighing in on the issue, including eXp CEO Glenn Sanford, who has been "following the Compass-Zillow lawsuit with great interest, particularly since eXp has been characterized as a 'co-conspirator' in supporting listing transparency."
Sanford said a private marketplace system stifles innovation and would have prevented eXp from existing. "The MLS system, despite its flaws, has been the great equalizer. It ensured that a small brokerage in rural America could offer clients access to the same cooperative database as the largest firms in Manhattan."
What's next? While the Compass-Zillow lawsuit plays out (which could take years), listing bans similar to Zillow's are set to take effect.
Redfin's ban, which is similar to Zillow's, is set to begin in September. And by Sept. 30, MLSs must implement the National Association of Realtors' delayed listings add-on to the Clear Cooperation Policy, which will add some flexibility for sellers who want to delay listing homes via multiple listing services.
StreetEasy, the company's New York City-focused site, is embracing a modified version of the policy that will apply to agents, limiting their access to certain tools.