Last month, Zillow gave the industry a number. The portal released a study claiming sellers who listed privately lost a combined $1.36 billion over three years, and that off-MLS listings sold for 1.3 percent less than listings marketed on the open market.
The study landed two days after Zillow’s federal antitrust lawsuit against Compass and MRED, and one day before Compass CEO Robert Reffkin took to LinkedIn with a counterattack of his own.
This is the moment the fight stopped being about lawyers and started being about your next listing conversation.
Context
On May 12, Zillow filed a Sherman Act case in Northern Illinois alleging that MRED, the Chicago-area MLS, and Compass had coordinated to use MRED’s rule-making power to force Zillow to display Compass private listings nationwide, or lose access to its Chicago feed. A Compass spokesperson said Zillow was “punishing agents” for following their clients’ wishes, and that “Compass believes homeowners should have the right to decide how to market their homes.”
Two days after the filing, Zillow followed with a study. One day later, a survey. The study put a dollar amount on the seller’s choice to go private: $1.36 billion lost over three years, and another $1.49 billion lost when one brokerage represented both sides of the deal.
The survey put a percentage on the seller’s preference: 61 percent said broad online exposure produces better results than a private network, and 85 percent said they want an agent who can pre-market their home to the broadest online audience.
Reffkin pushed back. On LinkedIn, he revived an internal Zillow strategy document and said it highlights Zillow’s plan “to sue a brokerage in order to keep agents and homesellers from marketing outside of Zillow.”
So now we have two narratives, two dollar figures, two surveys and two CEOs talking past each other. And one agent. You.
Analysis
Let’s be fair to both sides.
Zillow’s methodology has weaknesses worth naming. The study used the Zestimate as its benchmark for what a home “should” have sold for. The Zestimate has been criticized for years as directionally useful but not surgically accurate. Comparing a Zestimate to a sale price and calling the gap a “loss” is a useful framing, not a settled fact.
Let’s be fair in the other direction. Real estate has been telling sellers for a century that more exposure produces better outcomes. Auction theory backs that up. Common sense backs it up.
If you put a home in front of every qualified buyer in your market, the price moves up. If you put it in front of a smaller group, you accept less competition. The directional truth in Zillow’s $1.4 billion number is uncomfortable for the private listing argument because, on average, the math has to bend that way.
Both things can be true. The study is overstated, and the underlying logic is sound. That is the honest read.
When two large companies put a dollar figure on your client’s decision, the only person in the room who can do the math honestly for that specific home is you. Don’t outsource that conversation to a corporate study or a corporate spokesperson.
Compass’s “seller choice” framing isn’t wrong. Sellers do have the right to decide. Some have genuine reasons to go private. A homeowner in a contentious divorce. A trust sale. A property with a sensitive tenant. A listing that has been through one bad round and needs a discreet reposition. These are real situations. They are also a small minority.
The honest question isn’t whether a seller has the right to choose. They do. The honest question is whether the agent explained what the choice will likely cost. On Zillow’s data, the average cost is roughly 1.3 percent. On a $750,000 home, that is about $9,750. On a $1.5 million home, $19,500. Those numbers belong in your seller’s hands before they sign anything.
A seller’s right to choose is only real if the agent explains what the choice costs in their specific numbers, not in industry averages. Coach, don’t close. Serve, don’t sell.
Roughly 55 percent of Compass listings flow through private exclusive or coming-soon pathways, according to its own shareholders’ report last year. That means more than half of all their sellers are choosing a private listing, knowing they are risking losing money on their house.
Really? Do you believe that? The internal data inside one of the loudest brokerages tells a quieter story than its press releases.
What agents should do
Run the math on your last 10 sold listings. Ask yourself two questions.
- Was the home priced and marketed for maximum exposure?
- Would 1.3 percent more on average have moved the seller’s net?
If the answer is yes, you already know what the right conversation looks like.
Build a short, plain-language one-pager that walks a seller through three options: broad exposure on Day One, delayed marketing under the National Association of Realtors carveout and private exclusive. Show what each pathway looks like in their actual price range. Quote their home, not the industry.
Document your recommendation in writing. Whatever the seller chooses, put the trade-off in the listing agreement and the file. The lawyers will spend the next two years arguing about who said what. Your file should be boring.
Stop calling either side’s marketing materials “data.” Zillow’s study is a position. Compass’s survey responses are a position. Your CMA, with your local comps, on this home, is data.
Closing
This week, the fight is corporate. The lawsuit, the studies, the LinkedIn posts. Next week, the fight is on your listing appointment.
A seller is going to ask what all of this means for their home. The answer isn’t a side. The answer is a math conversation, an honest one, that ends with a seller who understands exactly what choice they are making and what it costs.
That’s the work. That has always been the work.
Darryl Davis is the CEO of Darryl Davis Seminars. Get connected on Facebook or YouTube.
