Zillow’s Battle with Chicago MLS Excludes Consumer Perspective

Even though a turf war is playing out in Chicago that could soon upend how local homebuyers and sellers engage with the market, you shouldn’t expect the people most affected by it to get a say.

Zillow has threatened to pull listings from the Chicago area’s multiple listing service, which is operated by Midwest Real Estate Data (MRED), unless the MLS scraps its Private Listing Network — a feature Zillow says promotes exclusivity and restricts fair housing access.

In Chicago, if Zillow and MRED can’t resolve their spat before January, listings from the Midwest’s biggest market could disappear from the country’s most-visited home search site.

MRED is caught in the middle between the portal giant and major brokerages like Compass, which have warned they’ll yank listings from the MLS entirely if the private network goes away. (Many Compass listings are already dodging various MLS’s across the nation altogether as the brokerage promotes an initial phase of exclusive, internal marketing.)

Chicago’s MLS also has a nuclear option: should Zillow really start to block listings that start out on the private network, MRED has hinted it could declare Zillow in violation of their licensing agreement and cut off Zillow’s access to local homes for sale.

So far, MRED has sided with the brokerages. That prompted Zillow to try dancing around the MLS, by asking brokerages to feed it their listings directly.

It’s a messy, high-stakes standoff, and one that — as one of Chicago’s top brokers Matt Laricy pointed out while Zillow dug in its heels this week — has little to do with helping consumers.

“Compass only wants the pocket (listings) because they want to keep things in-house… Then their stock price goes up,” Laricy said in a video posted to social media. “Zillow wants everything to go on the website… they get more leads… their stock price goes up. So they’re both just looking out for their pocketbooks. Neither of these are good for the consumer.”

He’s right. The MLS wants to do what’s best for the brokerages that make up its paying subscribers, with Compass chief among them, so they keep paying to subscribe. Zillow wants to charge more fees for handing brokers leads. None of their talking points are centered on how to improve the experiences of their actual clients.

These kinds of self-interested arguments put forth by corporate entities that profit off the biggest financial decisions most people ever make probably weren’t what consumers and their lawyers had in mind when they agreed to a $418 million settlement with the National Association of Realtors that promised to reshape the real estate industry’s approach to its clients.

The Private Listing Network isn’t exactly a pocket listing haven. Unlike traditional “coming soon” listings that never see full daylight, the MRED’s private network is viewable by all MRED subscribers — a fairly wide pool of licensed brokers in the region. But they are invisible to the public and to agents outside the area, which means Zillow can’t access them.

That’s the rub.

Nationally, Zillow has taken a hard stance against pocket listings, even suggesting they deepen housing segregation. But in this case, it’s accusing MRED of cloaking homes from buyers for brokers’ benefit, while Compass and others argue the network enables marketing flexibility that doesn’t run afoul of local MLS rules.

Meanwhile, new players are eyeing the prize. Google has begun “experimenting” with hosting for-sale listings directly on its platform, potentially reshaping how buyers find homes in the future. CoStar, which owns Homes.com, keeps jabbing Zillow in court and intensifying the portal wars.

For now, consumers are on the sidelines of a fight that’s supposed to be about their homes. If either side truly wanted to champion transparency or access, they’d start by considering the public’s role in the conversation.