Zillow’s private listings policy is coming for the Windy City, and Chicago brokers appear ready to fight back.
On Monday, Inman learned that the region’s multiple listing service, Midwest Real Estate Data (MRED), sent an email to its managing brokers related to Zillow’s Listing Access Standards, which target publicly marketed private listings.
The correspondence was a response to murmurs around Chicago that privately marketed listings — notably those on MRED’s Private Listing Network — would be banned from Zillow. However, MRED told Inman Monday that the ban has not yet taken effect in Chicagoland, and a copy of the email obtained by Inman showed MRED firing back at Zillow.
“MRED has made it clear to Zillow that selectively excluding certain listings may violate MRED’s rules,” MRED’s email to its brokers said, “as well as the terms of Zillow’s license agreement with MRED, which requires Zillow to access and display all licensed listings without bias or restriction.”
Zillow similarly confirmed that no private MRED listings have been banned from the portal.
“We have been attempting to work with them since the spring and have not yet sent listing access violations in MRED,” a Zillow spokesperson told Inman Monday.
However, Zillow does appear to be figuring out how to enforce its Listing Access Standards in the MRED coverage area — MRED is one of the largest MLSs in the nation and includes nearly 50,000 members — and was critical of MRED’s Private Listing Network.
“This is a play for MRED to protect its own private listing network. Hidden listing schemes disadvantage sellers and buyers, and that’s what this is,” Zillow’s spokesperson said. “Additionally, the data shows 30 percent of potential buyers searching in Chicago are from outside the area and both buyers and sellers are missing out on these opportunities.”
The tit-for-tat appears to set up the next showdown in the private listings saga, one that involves Zillow seeking to both maintain its access to listings in Chicago while also uniformly enforcing its ban on listings that aren’t displayed broadly to the public via its own platform.
Inman reached out to agents in Chicagoland who said off the record they hadn’t personally received the MRED email. Multiple members of the MRED board of directors didn’t respond to requests for comment.
Real Estate News first reported that Zillow’s ban had not yet taken effect in Chicago.
MRED Private Listing Network in crosshairs
MRED created its Private Listing Network nine years ago as a means for brokers from multiple competing firms to gain access to limited information about real estate listings before they’re marketed publicly.
The network is commonly used by agents across Chicagoland who share access with clients before the listing goes live on the MLS.
MRED agents obtain seller permission to put listings in the Private Listing Network via an addendum that acknowledges properties within the network reach a smaller pool of prospective buyers.
“As a result, a seller may not obtain the maximum price or optimal terms for the sale of seller’s real estate,” a draft of the addendum reads. “Real estate that is under contract before it becomes ‘active’ in Midwest Real Estate Data’s MLS or other listing services (hereinafter referred to as the ‘Services’), has not had the benefit of being fully exposed to the open market.”
“Seller further acknowledges during this marketing stage, information about Seller’s Property will not be transmitted through the [MLS] Services used by the public to search for property listings,” the addendum continues.
The existence of the network is apparently a complicating factor for Zillow’s rollout of its ban on publicly marketed privately listings, which was previously thought to have debuted nationwide. The statements on Monday make clear that the ban is not in effect in multiple markets, including one of the biggest.
“Chicago is one of the very last markets Zillow’s Listing Access Standards have not yet launched in due to the unique situation of MRED’s own private listing network,” the Zillow spokesperson said.
In a statement to Inman, Jeff Baker, CEO of Illinois Realtors, said he was aware of ongoing discussions between MRED and Zillow.
“Right now, our concern is related to some of the direct contact between portals and Illinois firms and requests for potentially anti-competitive feed agreements, which would work around the MLS,” Baker said. “Our guidance for brokers is that they should use extreme caution if encouraged to coordinate the exclusion of another market participant like an MLS.”
More context
The emerging battle is playing out amid a legal dispute between Zillow and Compass, the latter of which acquired @properties earlier this year and became the largest brokerage in Chicago.
Zillow’s private listings policy appeared to take direct aim at Compass’ ongoing attempts to build a broad network of listings that are available only through Compass’ agents and platform.
Compass sued Zillow in June and has asked a court to block the portal from enforcing its private listing policy.
MRED’s Private Listing Network addendum makes similar disclosures to the ones sellers accept when they agree to market their homes privately through Compass.
Under that brokerage’s Three-Phased Marketing Strategy, some Compass listings are marketed privately as Compass Private Exclusives and begin marketing off of the local MLS.
Sellers who agree to that marketing strategy sign a disclosure that informs them that by marketing off the MLS, the “property is not distributed to other brokerage firms and other public sites, which could reduce (i) the number of potential buyers who can learn about the property; (ii) the number of showings; (iii) the number of offers; and (iv) the final sale price for the property.”
Sellers using that strategy can also instruct their Compass agents to place the property in the MLS at any time, or they can outright reject the strategy and go straight to the MLS.
@properties CEO Thad Wong
Sellers who begin marketing privately and continue to do so for more than a day before publishing their listing on the local MLS face the prospect of being banned from Zillow for the life of the listing.
In response to the latest drama and upcoming policy battle, @properties CEO Thad Wong told Inman that MRED was “standing up for its professionals.”
“By defending seller choice, MRED is preserving every homeowner’s right to choose how their property is marketed and sold,” Wong said. “While some MLSs have chosen to align with portals that promote a one-size-fits-all model, MRED is championing innovation, entrepreneurship, and competition. Those are the qualities that create better outcomes for homeowners.”
Update: This story was updated after publication with comment from Thad Wong and additional details Inman obtained regarding the correspondence between MRED and Zillow.
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