Chicago MLS Chief Defends Private Listing Network Against Zillow

Jovanka Novakovic isn’t flinching.

“I haven’t changed the way I market because of Zillow’s restrictions,” the Chicago-based Compass agent said. “I can’t think of a listing where I did anything differently.”

Novakovic is one of the brokers whose strategy is under fire from Zillow. The issue is over listings on the Chicago MLS-backed Private Listing Network, as Zillow has taken aim at platforms sharing home offerings with brokers that keep them off public websites like its own.

Novakovic said she uses Compass’ three-phased marketing strategy on all her listings, starting them out as Compass Private Exclusives before going to the Private Listing Network and then to the traditional public MLS. Clients agree to it after she gives them an overview of the process, and she said it gives sellers the opportunity to research the market value of their homes. Around 75 percent of her listings end up on the public market after going through the earlier phases, she said.

Her experience is part of a broader clash playing out between Zillow and the Chicago-area’s Multiple Listing Service operator known as Midwest Real Estate Data (MRED) over its Private Listing Network (PLN). The PLN shows brokers subscribed to MRED its listings but keeps them out of view on portals available to the general public.

Zillow’s effort to limit methods like Compass Private Exclusives has also affected how it treats PLN offerings, which it considers to be in violation of its recently updated Listing Access Standards. Although Zillow has been warning Chicago managing brokers that listings hitting the PLN before going public violate the company’s rules, it hasn’t begun enforcing them in the Chicago market and still displays them on its website once they’re publicly for sale.

On the other hand, MRED insists the PLN has a place in the housing market and is doubling down on supporting the tactic. In the dispute’s latest step, MRED’s CEO Rebecca Jensen gave a spirited defense of the PLN in a message to her members this week.

Jensen laid out circumstances when a seller might want to use the PLN, including in sensitive situations following divorce or death. The letter didn’t mention Zillow by name, but Jensen made an apparent jab at Zillow’s new Listing Access Standards, saying the PLN is an alternative to “a one-size-fits-all model that restricts options for sellers and their brokers and is devoid of compassion and understanding.”

The Private Listing Network, launched in 2016, is an MRED service that lets agents make listings that are visible to all brokers with access to the MLS, but are kept off public websites like Zillow.

Zillow’s recent emphasis on its Listing Access Standards, similar to the National Association of Realtors’ Clear Cooperation Policy, requires that a home offering be made available on Zillow within one business day of public marketing. However, Clear Cooperation Policy differs by allowing MLS-wide private listing services like MRED’s.

But with Zillow’s policy, marketing a property on a private network then moving it to the public MLS isn’t allowed. Compass has sued Zillow over the rules, arguing they violate antitrust laws.

Zillow has said private listing networks distort the marketplace, hurt consumers and threaten fair housing standards by concealing some listings from the public. “Hidden listing schemes disadvantage sellers and buyers, and that’s what this is,” Zillow said in a previous statement to TRD.

Jensen’s message brought attention to what she called the “Five Ds” that could prompt a seller to list privately: divorce, death, disability, displacement and downsizing. She framed the PLN as an option rooted in “human empathy” to prevent broadcasting sellers who want privacy.

“Rigid rules or public exposure that the seller can’t control heightens an already stressful time,” Jensen’s lengthy email said. “When we created the PLN, our goal was to honor those experiences while maintaining the transparency and data consistency that make the MLS valuable.”

Matt Laricy, head of Americorp, one of Chicago’s top brokerages by sales volume, said he received a call from Zillow warning that listings that hit the PLN may not appear on Zillow. Laricy said he’s generally opposed to private listings, but he sometimes moves listings into the PLN during the holiday season when buyer activity slows down, before making them public again.

Laricy claimed Zillow representatives said they may make exceptions in some cases for circumstances like that, but he hadn’t received confirmation.

“Right now, the MLS is getting pulled in the middle of this power play between two behemoths of companies,” Laricy said. “They can’t really afford to be in bad graces with Zillow and they can’t afford to be in bad graces with Compass, so they’re trying to just walk the line and be relevant.”

MRED hasn’t stated how it will respond if Zillow begins enforcing its company rules, and a spokesperson for the MLS didn’t respond to a request for comment. MRED has said its license agreement with Zillow requires Zillow to display all public listings without restriction. But the MLS also hinted it’s not a fan of private exclusives — a step of seclusion beyond the PLN — by claiming it will work to give all its registered brokers a look at the full slate of the region’s real estate offerings.

“MRED’s dedicated to ensuring that all our brokerages and brokers have access to all listings within your market and will equally enforce our rules around displaying MLS data,” Jensen said in the Nov. 12 email.

Editor’s note: This story has been updated to clarify Zillow’s communications with Novakovic.