IDX as We Know It Survives Thanks to MRED

“This is a BIG WIN for brokers in Chicagoland and everywhere.”

Marilyn Wilson posted that on the WAV Group blog the day after Judge Tharp denied Zillow’s injunction against MRED. The same day, her WAV Group co-founder Victor Lund published Two Cases, One Map on RETechnology, the news site WAV Group owns. Victor called Marilyn’s post “the right first read” and told every MLS to send Zillow a compliance notice and pull the feed if the listings don’t show up.

Neither post mentions that Victor Lund is being paid by Compass. In the spirit of disclosure, so is my Industry Relations co-host, Rob Hahn. Rob and I don’t agree on much of this, which is kind of the point of the show. Rob is clear about the relationship on every post he writes about this affair.

“Note: I have already disclosed that I have a business relationship with Compass. However, they pay for my time as a consultant, not my opinions. I bring it up again here because of the topic of this post, though all of the opinions herein are mine and mine alone. You are free to make up your own mind.”

I assume Victor has a similar disclosure somewhere. I didn’t see one on either post.

Both Victor and Rob do real work for this industry, and some of the compromises on the table right now exist because they pushed for them. But to me their interpretation is flawed. This ruling is less of a win for brokers and more of a BIG WIN for Compass.

First, the fair part. MRED earned the win. Objective criteria has been in MLS display rules since the 2008 DOJ settlement, and Zillow’s Listing Access Standards had a hole you could drive a truck through. At first I thought the tweak MRED made to its objective criteria definition in October was a red flag. The testimony changed my read. A banned listing came back to Zillow the minute the seller fired the agent. That looks an awful lot like filtering by brokerage. Judge Tharp found no agreement between MRED and Compass, and he found Rebecca Jensen objected to the standards before she ever talked to Compass about them. Zillow isn’t the hero of this story either. Its ad business needs every listing, and the judge noted the word “transparency” showed up more than 300 times in the briefs. “The lady doth protest too much, methinks.”

So that leaves the part the congratulations card left out.

“Brokers everywhere” is doing a lot of work in that sentence. According to the court’s opinion, Zillow banned 1,390 listings under its standards. All but eight were Compass listings. The ban was the only thing that made a Compass Private Exclusive cost the seller something. Take it away and Compass gets both halves of the deal: a private window where its own agents can match the buyer and keep both sides, and full Zillow exposure as the backstop when that doesn’t work. Compass itself claimed the ban cut use of its three-phase strategy from 39% to 22%.

Compass tried to kill the ban in federal court in New York, lost the injunction, and dropped the case. Last October, Robert Reffkin emailed MLSs urging them to “block Zillow from IDX and VOW feeds.” Victor’s advice to MLS boards is that email with better formatting.

But, here’s what bugs me. After this ruling, a portal has to display every listing the MLS approves for distribution. The brokerage still decides when a listing gets to the MLS and which buyers get to see it before then. Cooperation became the portal’s obligation. Gating stayed the brokerage’s privilege.

To be fair, there’s a real compromise buried in all this. In Chicagoland, Compass agreed to put its Private Exclusives into MRED’s private listing network, where every MRED member can see them. In Seattle, the new NWMLS First Look status does the same thing for 21 days. That’s a lot better than a listing only Compass agents can find, because now a buyer’s agent at any firm can bring a buyer. But the visibility stops at the agent’s screen. A buyer without an agent still can’t see the house. And in Seattle, once the listing goes public, the days on market and price history from the quiet period stay off the public sites. Brokers got the listings back. Consumers got a later, sanitized version of them.

The funny thing is WAV Group published the best answer to all of this a week earlier. Daniel Jones’s Declaration of MLS Stewardship Principles, which WAV Group featured on its blog, says it plainly: “Marketing preferences govern a broker’s own channels. They do not govern the commons.” It also says a seller’s control over timing “does not extend to controlling who may see it.” Neither WAV Group post quoted it.

So, MLS execs. Read the order before you read the victory laps. Enforce your objective criteria rule if your license actually says it. And before you send Zillow that letter, make sure your own rules hold brokerages to the same standard. If portals have to show every buyer every listing, no brokerage should get to decide who “the right buyer” is.