Senators urge FTC to examine ‘deceptive’ real estate practices
Democrats Booker and Warren sent a letter to the FTC chair warning that some industry practices may harm consumers and exacerbate the affordability crisis.
Key points:
- Democratic Senators Cory Booker and Elizabeth Warren identified three potentially anticompetitive industry practices that "warrant investigation by the FTC."
- Deceptive "contact agent" buttons, mortgage referral practices and private listings were cited as contributors to housing inaffordability.
- No companies were specifically targeted in the letter, but the footnotes include media coverage of Zillow and Compass.
While brokerages, MLSs and home search portals continue to fight over who controls listing data, lawmakers are increasingly scrutinizing the real estate industry's practices.
U.S. Senators Cory Booker (D-NJ) and Elizabeth Warren (D-MA) wrote a letter to Federal Trade Commission Chair Andrew N. Ferguson on Thursday to call attention to "deceptive practices in the online real estate marketplace" and suggest that further investigation is needed by the FTC to protect consumers.
3 real estate practices targeted
The senators argue in their letter that the industry's "dominant actors" are wielding their market power to engage in anticompetitive practices that threaten to exacerbate the country's affordable housing crisis.
Undisclosed affiliations: The letter first singles out "contact agent" buttons on home search platforms, asserting that potential homebuyers may believe they are contacting the listing agent but may instead be connected with "platform-affiliated agents who have agreed to remit a percentage of their commission to the platform."
"Platforms and agents do not disclose these commission-sharing arrangements, leaving buyers unaware that they are agreeing to pay inflated prices to cover the platform's revenue cut," the letter states.
Mortgage referrals: Next, the letter warns about partner agents on search platforms who are "frequently required" to direct buyers to affiliated mortgage lenders who might offer less competitive loan terms or rates. Even though agents might earn a referral fee from such connections, the buyer may not be informed, the letter notes.
Private listings: Lastly, the senators point the finger at "dominant real estate brokerage firms" pursuing private listings strategies. The letter argues that the use of private listings "artificially restricts housing stock," potentially harming consumers because "buyers are shut out of the true market and sellers may end up with less interest and competition for their properties."
Private listings also create an incentive for agents to keep deals in-house, the senators suggest. That benefits the brokerage, which earns the commission on both sides, but may discourage the firm's agents from finding the best deal for their client.
Who is most harmed
Younger and first-time homebuyers who are "making the largest financial transaction of their lives without knowing the full picture" may be most disadvantaged by these industry practices, Booker and Warren cautioned, while big real estate players benefit.
"These practices saddle homebuyers with higher-cost mortgages and thousands of dollars of additional agent fees, a large share of which are funneled to the market-dominant platforms or brokerages," the letter states.
"Because these costs are often rolled into the loan, they compound into tens or even hundreds of thousands of dollars over the life of the mortgage."
Not naming names, but ...
Although the senators do not name any companies in the letter itself, the footnotes are telling.
Citations include a number of articles about Zillow, including coverage of a RESPA lawsuit alleging that Zillow partner agents steered buyers to the portal's home loans program; what the portal's contact agent button "really means"; and how Zillow's market dominance allows it to control referral fee pricing.
Compass is also named in the footnotes, with two articles discussing how its mega-merger with Anywhere allowed the brokerage to supercharge its private listing strategy. Warren and fellow Democratic Senator Ron Wydan co-authored a separate letter in Dec. 2025, prior to the completion of the deal, urging both the FTC and DOJ to "closely scrutinize" the merger for potential antitrust violations.
Other citations reference the Zillow and Redfin rental syndication deal, which had been targeted by the FTC and five state attorneys general about a year ago. That lawsuit was resolved in August, with the portals agreeing to offer standalone multifamily advertising products beginning in 2027. Redfin is also required to invest "millions of dollars annually" as it re-enters the rental market.