Hoby Hanna: Zillow is ‘overstepping,’ limiting ‘creativity’  

Howard Hanna CEO Howard W. "Hoby" Hanna IV made waves in June 2023 when he announced that his company — the largest independent, privately held brokerage in the country — would pull Howard Hanna Real Estate listings from the Internet Data Exchange (IDX) in an effort to keep them off of competitors' websites.

Two years later, the debate over private listings and office exclusives has escalated, pitting industry titans including Compass and Zillow — and their company faithful — against one another. 

But in a recent interview with Real Estate News, Hanna explained that the issue of control over listings and inventory is more complicated than it might seem. Here's what he had to say. 

This interview has been edited for length and clarity.  

Two years ago, you pulled Howard Hanna listings from the IDX. Why do you feel it's important to have more control over your listings?

When I started my career in real estate, I was taught that you get listings, you sit across the table from clients and it's not just about you as an individual — your company is creating a value proposition. And I think good brands put a lot of time and effort into marketing and into the right relationships and strategies.

But somehow the rules got in place that were about display, about the internet, and we saw the emergence of great companies take advantage of some of those rules and regulatory aspects. We've formed this belief that the model is at its core a wonderful thing. And I don't want that to go away. But it's a B2B model. And somehow the industry allowed the model to become a B2C. 

I can tell you that when most innovative real estate agents and companies are talking about their marketing strategy, they are not really referencing the MLS to the consumer. That's the misnomer that MLS executives don't want to hear. I think if you were to ask 10 people what an MLS is, they wouldn't even know because it's B2B. 

How would you explain your value proposition to a client?

If you're going to work with me at Howard Hanna, my value proposition is that I have all the listings on my website, and part of the benefit you get by signing this buyer agency contract is you're going to know about those listings, even if it's 24 hours in advance. 

Forget exclusive and private — what that buyer wants is to know that, if you're the market leader, are they going to know about the new listings, especially in a tight market? Why wouldn't a brokerage firm leverage that?

If everything gets fed to sites like Zillow or Realtor.com, we lose that differentiator, because now you're tied to these MLS distribution display rules. If I want to put all my listings in the MLS, but my seller doesn't want their listing syndicated, why should the MLS or other brokers limit that strategy?

How do you view the current debate over private exclusives?

This has become sort of a Compass versus Zillow argument, but when I look at our local market, we're sitting there — at that kitchen table, in that dining room — and that seller didn't decide to list with the MLS. They didn't decide to list with Zillow. 

I look at what Compass is doing as innovative — even though it's been around forever — and every company wants to complain that it is unfair. But every company that's been around for at least 30 years had private listing networks. 

I did a little tracking of the voices that are very anti-Compass and looked at their market share, and yeah, I could see where this is scary for their business model. So they're trying to vilify somebody for being innovative, but if the consumer doesn't like Compass' three-phase thing, they shouldn't sign up for it.

Critics of exclusive inventory have highlighted a number of risks. Do you think those concerns are valid?

I'm not running Compass. I don't know what their contract looks like and the disclosure.

People often come back and say, well this could lead to fair housing and discrimination, and my argument there is, well, I didn't know that people of color or protected classes couldn't go to HowardHanna.com or to Compass.com. I mean, it's an argument that just hasn't made as much sense to me, especially in today's day and age. You know, if Southwest Airlines isn't going to be on Expedia, are they discriminating?

How do you feel about Zillow's new listing standards?

Forgetting the true private exclusive, if a broker wants to market within the Clear Cooperation rules for 24 hours — or if an MLS changes it to more time — and it's in the guidelines, then I don't know how Zillow can ban a listing if they're participating in the MLS. There's a limiting of the innovation and creativity to try and homogenize the display of listings. 

Zillow doesn't procure the inventory. They need Compass, they need Howard Hanna, they need Baird & Warner, they need Anywhere, because otherwise, why is anybody going to their website? I just think it's overstepping. 

As an industry, we bought into forgetting that there's no such thing as a free lunch. So we all boosted these websites by giving our data for free for many years, and then they turned around and came back and monetized it against us and built the eyeballs. 

For strong brokerage firms that don't have the eyeballs Zillow or Homes.com have, they're asking how they can get some of that back. Even if it's for 48 hours before it hits all the other markets. Even if it's for an exclusive period that a seller agrees to. That's where I think what some of the MLSs are doing, and potentially even Zillow, is restricting trade. 

We work with Zillow. I like the folks at Zillow. But don't start putting rules on us — if a seller doesn't want to be on Zillow, don't penalize that agent and that seller.