Zillow escalates Compass tiff, moves to ban some SF listings from website

Zillow is turning up the heat in its feud with Compass as a sitewide ban on the brokerage’s listings looms.

A spokesperson for Zillow confirmed that the housing listing website is gearing up to ban the listings of agents who market private listings publicly without sharing them with Zillow and has already sent warnings to those in violation, the San Francisco Chronicle reported. At the beginning of this year, 384 homes in the Bay Area were in violation by listing exclusively via Compass and not on Zillow, the San Francisco Business Times reported.

The ban on noncompliant listings is planned to go into effect June 30.

The escalation comes a month after Zillow’s New York City-based offshoot StreetEasy announced that agents who violated the policy would be banned from using certain services on the platform.

The move is seemingly aimed at a new program at Compass, the largest brokerage in the country, that allows home sellers to move these so-called pocket listings to the public market after Compass has had the chance to market the property exclusively through its system.

This way, buyers who go directly through Compass can learn about a listing before others see it on Zillow, enabling them to make an offer before the property hits the open market. It also allows sellers to soft-launch their home and field early offers.

A spokesperson for Compass clarified to The Real Deal via email: “[National Association of Realtors] and Zillow permit ‘office exclusive’ listings. Zillow takes it 1 step further than NAR and says that an agent who shared office exclusive listings 1:1 with agents outside of their brokerage firm will have the listing banned.”

Compass estimated that about one-third of its listings in the Bay Area use the program to list exclusively via Compass’ public marketing apparatus via its website and promotional materials, the San Francisco Business Times reported. Most eventually end up on the open market.

In the San Francisco Association of Realtors Multiple Listing Service, “there are 105 non-Compass ‘MLS Coming Soons’ and 50 Compass ‘Coming Soons,'” the Compass representative told TRD, “showing that 68 percent of the listings that Zillow will ban are not from Compass.”

To come into compliance, agents nationwide will need to share with Zillow all listings posted on a public multiple listing service (MLS) within 24 hours of them going live on other channels. Each real estate agent gets two strikes before being banned from Zillow entirely. A third property violating the policy, and any others after that, would not be allowed on the site.

Compass won’t be the only brokerage affected by the changes. Other firms, such as Coldwell Banker and eXp Realty, also have their own exclusive listing networks.

— Chris Malone Méndez

Correction: This story has been edited to reflect that Zillow is banning listings at the listing level, not at the agent level. The story also now includes context provided to The Real Deal by a Compass spokesperson.