Last week, Zillow began using the market power it has been accumulating to take greater control of your listings—betting homeowners will choose exposure on Zillow over loyalty to you, their trusted agent.
Zillow made good on its threats Friday by banning an agent’s listing who hadn’t submitted their listing to Zillow within 24 hours of marketing it. Zillow banned this listing—even though it is properly listed on Bright MLS and complies with all MLS and NAR rules. Now, when buyers search for that property on Zillow, they see it falsely labeled as "Off Market." Zillow has long misled buyers about who the real listing agent is; now they mislead buyers about which homes are actually for sale.
Zillow demands all your listings immediately and then takes the leads generated, selling them to other agents. These leads belong to you and your sellers—not Zillow. Zillow is taking your clients right out of your hands.
It gets worse.
Zillow sends hundreds of millions of marketing emails to homeowners. One is titled "Helping you sell for more." When homeowners click, Zillow encourages them to "Sell your home yourself," "advertise your listing for free," and "avoid paying a listing agent commission." Tens of thousands of sellers are now listing directly on Zillow without using an agent or paying a listing commission. Zillow has used the IDX feeds and your listings to build up their audience and now they are cutting out agents, brokers, and the MLSs. Zillow is taking advantage of the end of the MLS “no-commingling” rules to blend these Zillow “no agent listings” seamlessly among legitimate agents’ listings. These Zillow “no agent listings” are only on Zillow and not on the MLS, brokerage sites, or other portals. Zillow is bullying agents, threatening to ban agents’ listings for life if they are marketed anywhere other than Zillow. But yet they are fine with listings that are only marketed on Zillow and nowhere else? Are the rules only for thee and not for Z? It is hypocrisy to say you are protecting clear cooperation while you are actively doing the opposite. Maybe Zillow confused clear cooperation with clearly co-opting your commissions.
Perhaps the most brazen display of Zillow’s hypocrisy is in the actual language of their new ban. While Zillow preaches they are protecting the industry by requiring submission of listings to the MLS within 24 hours of public marketing, in fact their new rule does not apply to listings directly submitted to Zillow, and Zillow alone. You read that correctly; they will gladly do the very thing they are preaching against!
If Zillow demands all agent listings but continues offering Zillow-exclusive listings, Zillow will offer buyers more listings than MLSs, weakening the MLSs and increasing Zillow’s dominance over your business.
Zillow gained huge market share by buying Trulia. While regulators might never let Zillow buy Realtor.com or Redfin outright, Zillow is gaining control through "partnerships." Zillow is paying hundreds of millions, possibly up to a billion dollars, to Realtor.com and Redfin. Billion-dollar checks come with influence and control. Zillow’s former CEO Rich Barton stated at Inman Connect that Zillow has "close partnerships" with Redfin and Realtor.com, calling them "great partners." That sounds to me like an anticompetitive cartel. Immediately after Zillow announced they would ban listings marketed outside Zillow, Redfin quickly announced they too would obediently follow suit. How do agents and brokers keep earning commissions when Zillow aggressively holds the reins over four major real estate portals? Zillow is consolidating power over listings, buyer-agent commissions, and now, listing-agent commissions. How is this even legal?
Homes.com is now the only agent-friendly real estate portal committed to "Your Listing, Your Lead." We don’t take referral fees from your commissions, we don’t sell your leads, and we never compete with you for exclusives. For nearly forty years at CoStar Group, we have consistently honored these principles. Homes.com remains independent of Zillow’s agent-unfriendly control ecosystem.
On Friday when we learned Zillow had banned that agent’s listing we boosted it for free on Homes.com providing enhanced exposure on Homes.com and advertising all over the internet. I commend the agent that is standing up to Zillow’s outrageous bullying and intimidation. With the largest real estate marketing investment in the world, the Homes.com network draws more than 100 million unique visitors a month to our sites. Over the weekend 10,000 potential home buyers viewed that “Z banned” listing on Homes.com.
Every real estate agent in America should stand up to Zillow’s bullying. The Northwest MLS (NWMLS) recently announced an excellent change to their disclosure forms. The forms now require that brokers disclose to buyers and sellers referral fees they are paying or potentially receiving. Home buyers and sellers need to know about the Zillow tax. Ask your MLS to follow NWMLS’s lead and enact similar rules to shift the balance of power away from Zillow and back in agents’ favor. Homeowners need to know that when their home is listed for sale on Zillow, their trusted agent is not getting the leads because Zillow is selling them off to other agents without the homeowners’ knowledge or permission. Homeowners need to know that Zillow is no replacement for the expertise a professional real estate agent brings to a successful home sale.
Please refer your buyers and sellers to Homes.com where we respect and protect your relationship with your clients.
Sincerely,
Andy Florance
CEO CoStar Group & Homes.com
P.S. If you feel that it is anticompetitive for Zillow to partner up with Realtor.com and Redfin to increase their market power to control your industry, let the DOJ hear your voice by clicking United States Department of Justice Antitrust Division.