Compass opens new front against Zillow with complaints to regulators, MLSs
“When sellers choose to publicly market their homes and make them available to the broadest possible audience, Zillow is keeping those listings from buyers because they were not initially prioritized on Zillow,” the spokesperson said over email. “In some cases, Zillow is displaying active, publicly available listings as not for sale.”
You seriously can’t make this shit up.
A thought experiment about unintended consequences.
I don’t typically write longer posts but I recently heard someone on a recent podcast (only tangential related) describe a branding exercise that stuck with me. Imagine Nike opened a hotel. You can picture it instantly, can’t you? World-class gym. Sleek minimalist rooms. Maybe LeBron in the lobby. You’d book it tomorrow.
Now imagine Hyatt launched a running shoe. What would that look like?
Exactly. It would look like nothing. Some brands carry a gravity that extends naturally into adjacent spaces, and some don’t. The exercise isn’t about who’s better. It’s about which direction the brand energy flows.
I’ve been thinking about this a lot as I watch Compass, a handful of MLSs, and the broader industry slowly, maybe accidentally, push Zillow toward becoming something it has deliberately avoided for twenty years: a full-service brokerage.
The people doing the pushing should be very careful about what they’re wishing for.
In January, Compass closed its acquisition of Anywhere Real Estate, becoming a conglomerate with 500,000+ affiliated agents across Compass, Coldwell Banker, Century 21, Sotheby’s, and ERA. In February, Compass and Redfin/Rocket announced an exclusive Coming Soon partnership, routing Compass listings to Redfin before they hit the MLS. In March, Zillow launched Preview as a response.
Then came the MRED situation. Nine Compass Private Exclusive listings triggered a feed suspension that removed 43,000 listings from Zillow overnight. Within hours, Compass launched a coordinated marketing blitz across its owned brands while competitors’ listings were invisible on Zillow. A federal judge ordered restoration in 48 hours. Zillow filed an antitrust complaint alleging a Compass regional VP sits on MRED’s board. The same board that pulled the trigger.
Private listings withheld from the MLS. An exclusive portal deal that bypasses the MLS. An MLS governance action that punishes Zillow while Compass capitalizes. A brokerage executive on the board that enforced it.
If you were in Zillow’s Seattle headquarters watching this, would you conclude the system is going to treat you fairly? Or would you start thinking about what your company looks like if it didn’t need any of them?
Here’s the thing about Zillow becoming a full-service brokerage: you can picture it.
Two hundred million monthly visitors. A brand synonymous with real estate search. Zillow Home Loans already in place. A Premier Agent network that already connects buyers with agents, agents who could, with a different employment agreement, become Zillow agents.
You search on Zillow. You find a home. You click “Schedule a Tour” and a salaried Zillow agent shows you the property. You get pre-approved through Zillow Home Loans on the drive over. You make an offer through the app. The whole thing feels like booking a flight.
That’s the Nike Hotel.
Now imagine Compass launching a consumer portal to compete with Zillow. Five hundred thousand agents, sure, but what’s the consumer brand? What’s the reason a buyer in Tampa opens the Compass app instead of Zillow? That’s the Hyatt running shoe.
Zillow has resisted this model because Wall Street rewards asset-light platforms, not brokerages. But Redfin proved you can be both. And Redfin’s hybrid approach, salaried agents in key metros with partner agents handling the rest, showed you don’t have to employ everyone to control the transaction. If Zillow’s current model is being slowly strangled by private listings, feed disputes, and exclusive pre-market deals, the multiples question becomes academic. You can’t monetize traffic you can’t serve.
While Compass plays chess with Zillow, something is happening inside its own house.
Compass was built on exclusivity. Robert Reffkin recruited the industry’s top producers with a simple pitch: you are the best, and you deserve a platform that treats you that way. Reffkin’s personal cell phone number was part of the deal. It was the velvet rope.
Then they bought Anywhere. Now those same elite agents share a corporate parent with Century 21 and ERA. The holiday party got a lot more crowded. No top-producing Compass agent wants to make small talk with the Century 21 agent from the strip mall office, but here they are, under the same roof. Ew.
And the technology edge? Compass positioned itself as a technology-enabled brokerage, and for a while that mattered. But everything they built before 2026 now feels like last season’s phone. AI has leveled the playing field so completely that every brokerage, every MLS, every single agent has access to tools that match or exceed what Compass spent hundreds of millions developing. The tech moat is gone.
So the cachet is diluted and the tech advantage has evaporated. I’m hearing that some of these high-end agents are looking at Side and other alternatives, trying to recapture the exclusivity that Compass used to represent. Compass bought scale and may be losing the thing that made the scale worth buying.
Rob and I talk a lot about 2nd and 3rd order consequences on our Industry Relations podcast. Here’s the scenario that should keep Compass up at night.
They’ve spent the last year building private listing infrastructure, cutting exclusive portal deals, and creating an environment where Zillow’s access to inventory is increasingly uncertain. They’ve poked the bear.
And the bear has $2 billion in cash, 200 million monthly visitors, a mortgage company, an AI platform, and a brand that every American consumer already trusts for real estate. If Zillow decides the only way to guarantee access to inventory is to control the inventory, they have every asset they need to do it. And unlike Compass, they start with the consumer, not the agent. That’s the high ground.
What would happen to Compass’ stock price when the Wall Street Journal reports, “Zillow Launches Mega-Brokerage”?
The industry has spent years worrying about Zillow’s power as a portal. They should be much more worried about Zillow’s potential as a brokerage. A portal can be starved of data. A brokerage that controls its own listings can’t be.
Every feed suspension, every exclusive pre-market deal, every private listing that routes around the open market is a data point in a Zillow board presentation titled “Why We Need to Control Our Own Inventory.”
Can you picture what a Zillow brokerage looks like?
I can. And it looks like a Nike Hotel.
Inspired by a Facebook post on MRED’s website.
First-time homebuyers, rejoice!
“There’s just one problem: The death of the thirtysomething homebuyer may have been greatly exaggerated. A new analysis from Redfin, shared exclusively with Business Insider, found that the median age of the first-time buyer last year was 35 — a slight decrease from the year prior. It adds to the growing pile of evidence that the new median of 40 was a mirage. While millennials, now 29 to 45, generally lag behind boomers on the homeownership front, the purchasing milestone hasn’t shifted nearly as much as the NAR report suggests.”
Fascinating reporting by James Rodriguez of Business Insider based on new data from Redfin and other sources. James, to me, is one of the rare writers outside the ORE bubble who seems to really get our business.
There is a bit of quibbling between NAR and other organizations that conduct surveys. But it seems the narrative might need adjusting.
“Because no data source is perfect, what you really want to do is say, What is the bulk of the evidence showing me?” Zhao tells me. “When we compare our results to analyses that other people have done looking at credit bureau data or mortgage data, it seems to support the idea that the age of the first-time buyer has not increased all that much.”
This is important because national policy is being shaped by these narratives getting out. Worth the read.
I was in Chicago last week at NAR Headquarters for the NAR Influencer Summit. My kids got a kick out of me being an “influencer.” I feel so Gen Z! Rob Hahn was there, as was Keith Robinson from NextHome/Real Estate Insider’s Podcast, Katie Lance, and a few other podcasters/bloggers/etc. I heard there were more invited but couldn’t make it due to scheduling.
The meeting was held at the top of the NAR building on Michigan Ave. Very cool. I hadn’t been inside the building since pre-pandemic, and never to the top, so that was kind of a treat.
What struck me initially was who from NAR was present: basically Nykia Wright, CEO of NAR, and her entire executive team. Some of them, based in Washington DC, had flown in to attend the event. And they were there for the entire meeting, which lasted from 12 PM to about 6 PM. We were told nothing was off limits, but to be respectful. A lot of the executive team gave brief presentations and then we could ask questions.
Nykia was the first to present. She basically went over NAR’s new strategic plan. I had already read it, so a lot of it was repetitive. Some of the team were brand new to NAR; others had already been there a while, like Lawrence Yun, Shannon McGahn, Mark Birschbach, and Jonathan Waclawski.
Nykia spoke about roughly a 20% reduction in NAR staff, which was higher than the 14% number I had read previously. Based on the tenor of the conversations, budget pressures were clearly a big driver across many departments.
This ain’t your old NAR.
I asked a lot of questions. When I thought I was getting corporate gobbledygook, I pushed back and asked for clarification—which, most of the time, I got. There were some myths I had about NAR that were busted. Some answers I thought were incomplete. But overall I have to say I was impressed with the effort and thought that Nykia and her executive team put into it. Honestly, really impressed.
At one point Nykia described herself as a “business doctor.” I thought that was apt. She described her patient, NAR. By NAR she meant the entire ecosystem: staff, leadership, brokers, and agents. She laid out what the patient needed to do to survive. As a pragmatic doctor, there was no need to dwell on the past. The past was done. Her focus is making sure the patient survives going forward. Her beside manner? All business.
The prescription was pretty clear.
The patient needs to get sober.
Change its diet. Lose some weight.
Eat healthier foods. More greens. Fewer carbs.
And one by one, members of her executive team came up and explained how the patient would start exercising again—new routines, new disciplines, new habits meant to produce a healthier organization.
Maybe even stop hanging around with a few bad influences.
Everyone in the room seemed to agree with the diagnosis.
But agreeing with the doctor and following the doctor’s orders are two very different things.
So the real question isn’t whether NAR has a plan.
The question is whether the patient will actually follow it.
We’ll see.
But at least the doctor has arrived.
My thanks to Bennett Richardson for the invite and Nykia for her hospitality.
Third Point Sends Letter to Board of Directors of CoStar Group
We thought then, as we do now, that the Company’s anemic performance can be ascribed entirely to the misallocation of billions of dollars into Homes.com, overseen by a feckless board of directors that has failed to protect shareholders from Mr. Florance’s quixotic quest while rewarding him with exorbitant pay packages. Like an elementary school child who wins a prize even for finishing last, Mr. Florance’s bonuses are perhaps the costliest “Participation Award” our firm has witnessed.
This guy, Dan Loeb, doesn’t do subtle.
I don’t know all the players but it looks like Third Point ( I’m guessing a hedge fund) is a huge investor and there was some sort of “standstill agreement” with CoStar that expired at midnight. And these guys at the hedge fund came out swinging this morning with a letter that reads like a controlled demolition. Loeb is nominating a slate of directors to replace the majority of the board, which he describes as “feckless” and “supine enablers” of Andy Florance’s Homes.com obsession( a.k.a. ZDS –Zillow Derangement Syndrome).
More from the letter:
The Company’s plan to build a dominant online classifieds business in the U.S. RRE industry was deeply flawed, with structural problems affecting both sides of management’s proposed two-sided marketplace. First, customer demand was dominated by deeply entrenched competitors with strong brands and ample resources. Second, and even more damaging, the Company lacked meaningful differentiation in its supply of properties due to the presence of MLS’s freely syndicated listings. While these problems were immediately obvious to any informed observer, management and the board either ignored or failed to understand them.
Ouch, that’s going to leave a mark. He’s basically saying, we liked the monopoly we owned before. We don’t believe nor did we ever believe you could establish a monopoly in residential real estate.
So CoStar has sunk roughly $3 billion into U.S. residential real estate over five years. The return? About $60 million in revenue last year. Meanwhile, Florance received $37 million in compensation despite the stock dropping 27% over five years while the S&P 500 returned 94%. No bueno according the Mr. Loeb.
Loeb’s description of Florance’s bonus as the “costliest Participation Award” his firm has ever witnessed is the kind of line that ends up in business school case studies — which, he helpfully notes, is exactly where CoStar’s residential strategy belongs.
But I’m not so sure. I keep thinking of that conversation attributed to Masayoshi Son (CEO of SoftBank) when he was talking to Adam Neumann of WeWork.
Masayoshi Son: In a fight, who wins — the smart guy or the crazy guy?
Adam Neumann: The crazy guy of course.
Masayoshi Son: Correct, but you are not crazy enough.
I’m not sure I would ever bet against Andy Florance. Isn’t “quixotic” just another word for crazy?
But it sounds like Third Point wants CoStar out of the residential real estate (RRE) business. So let’s pull on that thread a little bit.
Who do they sell it to?
Yup, you guessed it…Compass. And Reffkin is for sure crazy enough!
Looks like CRMLS isn’t playing. They brought receipts and a little sick burn to Compass, CEO Robert Reffkin latest social media tizzy fit.
“The specific language that you recently pointed out on social media about listing control and display in the EULA has been there for years. Why that language exists requires a bit of a history lesson, so humor me as I explain how what we provide is a good thing to all parties. “
Here’s some more context
“For years, we had seen grey market activity by people who have access to the MLS selling its data to those who didn’t, which meant brokers and agents weren’t being compensated for the valuable information they provided. Conservative estimates for how much money was being made this way started at around $5 million per year, with the potential to have gone as high as $100 million. So, we saw an opportunity to monetize the data in a way that puts money back in the pockets of those who provided it. “
Think Napster
Here’s the whole thing if you want to read it. The second to last paragraph seems to indicate that Mr. Reffkin isn’t being totally sincere.
“Okay, Mr. Reffkin, you got some people’s attention. You may feel like you’ve got us pinned, but the thing is, you’ve yet again ignored or refused to be bothered by some important facts.
I typically don’t get into the reeds regarding every defamatory claim about CRMLS that comes up on social media, but the misinformation you’ve spread is worth addressing and clarifying. Let’s just put things in clear terms right from the jump; CRMLS’s EULA doesn’t endorse taking control of listings away from agents or brokers or improperly profiting from them. Instead, it’s goal is to provide benefits back to the brokerage community for the listing content provided.
To begin, the most recent changes to our EULA were about two things and two things only:
- Multifactor authentication: Our front-end vendors wanted this security enhancement and we’re happy to install it as it optimizes our data security.
- Appeal rights: We added a provision to ensure brokers have the right to correct issues that may arise during arbitration.
- And that’s it.
The specific language that you recently pointed out on social media about listing control and display in the EULA has been there for years. Why that language exists requires a bit of a history lesson, so humor me as I explain how what we provide is a good thing to all parties.
Systemwide Copyright and Data Protection
For many years, CRMLS (along with many other large MLSs) made quarterly filings with the US Copyright Office to protect the MLS database and safeguard intellectual property.
However, the Copyright Office denied protection, claiming that MLS data was just a directory, meaning the information could not be copyrighted. In response, CRMLS and other MLSs worked together to educate the Copyright Office on the creative elements within MLS listings.
To prove our claim, CRMLS submitted Operations Committee meeting minutes, where dozens of our participating agents and brokers debated the necessity and purpose of every MLS data field. This illustrated the creative decision making and coordination involved in building the MLS system as the MLS determines what is part of the official listing record.
As a result, the Copyright Office has since recognized MLS listings as eligible for protection, allowing us to better protect agents’ work from unauthorized use.
Which brings us to REdistribute…
REdistribute and Data Control
Now that the MLS had a say on its database, we went to work trying to make new ways for the data to work for our users. For years, we had seen grey market activity by people who have access to the MLS selling its data to those who didn’t, which meant brokers and agents weren’t being compensated for the valuable information they provided. Conservative estimates for how much money was being made this way started at around $5 million per year, with the potential to have gone as high as $100 million. So, we saw an opportunity to monetize the data in a way that puts money back in the pockets of those who provided it. Thus, REdistribute was born, and language to support it was included in the EULA several years ago.
REdistribute is an independent company born as a joint venture between MLSs. It packages MLS data for institutional use, so entities like mortgage lenders or banks can get a better concept of the real estate market. Those entities pay to license the data, and the MLS can then allocate those payments back to the brokerages who provided the data.
This system recognizes that the value of the listing belongs to the agents and brokers who created it. It doesn’t mean that the MLS “owns” the data. If every agent were to have individual ownership of their listing, then every use of the data outside the MLS (think AVMs or IDX feeds) would require approval from all the thousands of CRMLS brokers. That’s unfeasible. The MLS manages the data in ways that benefit our users, but that data is only valuable as a set, not as a bunch of individual fragments.
In short, CRMLS worked to protect listing data under copyright and helped create REdistribute to legally share and monetize brokerage data, allowing MLSs to bring that value back to brokers.
What This Means for Today’s Market
Now that the history lesson is over, let’s talk about what this means for agents and brokers operating today. We’re facing a shrinking market with tighter margins, so CRMLS is always looking for new ways to return value to our brokerage community.
Have we asked for certain elements of control over listing data? Yes. Have we done it to enrich ourselves? Absolutely not.
The systems we have in place stand to benefit all our users, regardless of brokerage size, and create an even spread of opportunities for everyone. I wish to see more of this spirit of collaboration in our industry, but that requires trust and honesty from all parties, not random jabs that are devoid of context.
Before I conclude, Mr. Reffkin, here’s one more piece of history. In September 2023, while at the RISMedia CEO and Leadership Conference, you asked to meet with myself and CRMLS VP Ed Zorn. We were prepared for a conversation on CCP and No Cooperation Listings (aka Office Exclusives). Instead, you spent the better part of an hour discussing topics related to data distribution and the use of listing data. You asked us how we could get the rest of the country to adopt the CRMLS way of handling listings. You praised our ease of access and terms of use. You were frustrated that other MLS entities did things differently and that you had challenges getting complete listing data. CRMLS could deliver what Compass needed in the way of data due to the MLS owning the MLS listing record and only because we had the terms in our EULA that you identified in your post. That ownership allows the MLS to open up the use of the data by all members of the MLS in a consistent and fair manner.
CRMLS remains committed to transparency, accountability, and service to agents, brokers, and consumers. We will continue to focus on providing accurate information and delivering value to the real estate community we proudly represent. Rather than allowing misinformation to divide us, let’s focus on working together to build a stronger and more informed professional community. “
Compass agrees to share its exclusive listings, with 2 caveats
“However, the NYC-based brokerage that has fiercely championed private listing networks said its offer comes with two conditions: The brokerage or MLS agrees not to alter or monetize the homeowners’ listings in any way, keeping the listing agent front and center, and the brokerage or MLS can ensure agents won’t be fined or banned for sharing listings with the brokerage or MLS.”
It sounds like they’ve closed the book on their Private Exclusive Book. That was quick. And now it seems they’re launching a new narrative about sites and MLSs that “monetize” listing data. I thought this was all about “seller’s choice”?
Honestly, it’s hard to keep track of how much shit they throw at the wall. Will they ban Google from showing their properties next, since Google monetizes search traffic? Are they banning all forms of referral compensation, or just the ones from people and brokerages they don’t like? MLS orgs are not allowed to charge vendors data licensing fees? Well maybe that last one might work ; )
And what’s this nonsense about not wanting listing data to be altered? The reason Zillow and other portals stopped taking direct feeds from brokers is because the data was garbage. Why should Compass get to issue non-compliant data to the MLS while everyone else has to play by the rules?
And don’t even get me started on this idea of “ensuring agents won’t be fined or banned for sharing listings with the brokerage or MLS.” Who is going to take that risk?
Homes.com will ‘boost’ listings that are banned on Zillow: Florance
“Homes.com is going to support any agent who gets blackballed or blacklisted on Zillow, and boost their listing,” he told Inman exclusively on Thursday, adding that access will be free to those impacted by Zillow. “We don’t think it’s right to ban people’s listings for your economic interest.”
But what about the economic interest of the seller or the buyer?
There’s a lot I think Homes.com does well, but every now and then (like now), Mr. Florance seems to be driven by a personal vendetta against Zillow. And look, I’m not always the biggest fan of Zillow either (for example, I don’t think Homes.com ever sued their own clients).
But in the end, this feels like a hollow threat.
To put a finer point on it, I updated the graphic that accompanied the Inman article today.
Mega MLSs are attempting to sell Remine — either whole or in parts
“The MLSs collectively paid $53.5 million to buy Remine. Remine is a wholly-owned subsidiary of MLS Technology Intermediate Holdings, which is a wholly-owned subsidiary of MLSTH.
According to legal filings, on February 19, MLSTH hired Rock Creek Ventures, a financial advisory firm that specializes in business restructuring, to run an eight-week sale process for Vienna,Virginia-based Remine under a proceeding known as an assignment for the benefit of the creditors or ABC.According to the American Bar Association, an ABC “is a business liquidation device available to an insolvent debtor as an alternative to formal bankruptcy proceedings”
Embarrassing. And it couldn’t come at a worse time.
