Some industry participants call this the policy that the National Association of Realtors should have put out.
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A battle over how homeowners list their properties for sale is shaking up the housing industry, with big implications for sellers and buyers.
On April 10, the massive real estate company Zillow announced it would not accept any listings that have been previously offered for sale in a selective manner, a direct response to a step from an industry group that many observers felt limited choice in the marketplace.
In March, as USA TODAY previously reported, the National Association of Realtors set out new guidelines for how seller listings can be shared. The group clarified that real estate brokerages can continue to share listings among agents at the brokerage, as has long been the case. But it also offered sellers a new option: delaying disseminating a listing beyond the Multiple Listing Service databases once it is posted there.
Supporters of the “delayed marketing exempt listing” option say it gives sellers an opportunity to test the waters of the market before committing to advertising a property more broadly. But detractors disagree, arguing that it makes the marketplace more fragmented, inefficient, and potentially discriminatory.
In early April, Zillow flexed its muscle. “We believe a listing available online anywhere consumers can see it must be online everywhere listings are displayed,” the company said in a statement.
Zillow acknowledges that various brokerages have their own web-based marketplaces, both internal and external-facing, which may defy easy categorization, but says the spirit of its policy holds: as soon as a listing is shared with a consumer – whether on a brokerage’s own website, via a lawn sign or social media, or in any other method – it must be shared with the local MLS within one business day or forfeit the opportunity to be shared on Zillow, ever.
The qualification about being accessible to consumers is important, because there are reasons when sellers might want privacy, rather than broad exposure. That can be achieved by allowing real estate agents to market properties among themselves, as they have long done.
Zillow’s step matters: the company is the 800-pound gorilla in residential real estate. According to a February investor presentation, 80% of consumers come directly to Zillow. Among users of listings apps, Zillow commands 64% of all traffic, more than four times its closest competitor, Realtor.com.
Not everyone is cheering.
“Portals should remain neutral,” said Andy Florance, founder and CEO of the parent company of Homes.com, a smaller residential marketplace, in April 14 comments shared by a spokesperson.
“Zillow is asserting that they, not NAR, not your brokerage, not you the listing agent—and not even the homeowner whose house it is and is paying the commission—should decide how a listing is marketed,” Florance added. “This isn’t about protecting consumers — it’s about protecting Zillow’s ability to profit from listings by selling leads to competing agents.”
Zillow does benefit from consumer traffic to its website, including by selling customer leads and ad space, and also offering house hunters various additional services such as mortgages. But many consumer advocates and industry participants say it’s still a step in the right direction, toward a more cohesive and transparent marketplace of listings.
“We encourage all brokers to support Zillow’s efforts to maintain the transparency of real estate markets and prevent their balkanization,” said Stephen Brobeck, a senior fellow with the Consumer Policy Center.
And Summer Goralik, an independent real estate compliance consultant, called the step “significant” and “bold.”
“While the industry looked to NAR or the DOJ for direction on listings, Zillow stepped in, took a stand, and seized control of the narrative,” Goralik told USA TODAY.
Most industry participants note that NAR’s March policy was crafted in response to lobbying from a few large national brokerages, including Compass. Compass declined to comment for this story, but previously told USA TODAY that “sellers need more options and flexibility in how they market their homes.”
