Compass’ support of certain multiple listing services across the country is starting to change the way Zillow does business, Compass CEO Robert Reffkin said this week.
Reffkin referred to “the dominant portal” nine times during the roughly hour-long earnings call on Tuesday. He didn’t mention Zillow once by name.
Instead, he said that Zillow rose to power as a result of restrictive MLS policies that allowed it to use and monetize broker listings, and he suggested that era is ending.
“Like MLSs, the dominant portal takes the hard work and intellectual property created by brokerages and agents — without our permission and for free — takes it from the MLS and uses it for lead diversion to make money on it time and time again,” Reffkin said. “If the dominant portal had to actually compete to get better listings, compete on price, compete on features, compete on value, they would have to completely change their business model or fail.”
During a call with investors on Tuesday, Reffkin suggested that recent changes by major regional MLSs were the result of increased competition in real estate, and he took some credit for what he said was a new era of competition in the industry.
Robert Reffkin at Inman Connect New York.
His comments made it clear that he believes Compass is gaining an edge over the nation’s top real estate search portal thanks to its massive inventory of exclusive listings and recent moves by MLSs that support Compass’ marketing strategy.
“If the dominant portal no longer got listings for free from the MLS, they would need to compete for those listings resulting in listing agents getting their buyer inquiries and their name and brand back on their listings,” Reffkin said. “Everything Compass has done in the past and everything it is doing today is designed to infuse competition into MLSs and portals in real estate.”
Zillow didn’t respond to a request for comment on Reffkin’s statements.
Reffkin specifically named the MLSs serving Chicago, the Mid-Atlantic, Nashville and Southern California as those that have become more supportive of agents and brokerages.
“They have begun to compete, including by offering more flexible rules that let homesellers and their agents determine where and how to market their own properties,” Reffkin said. “MLSs that are expanding recognize that if they want to get agents in new markets to sign up to their MLS, they can’t expand with more restrictive rules and fines.”
“Instead, they need to compete with more marketing options and more marketing flexibility that helps listing agents and their sellers, as opposed to helping the dominant portal,” he added.
Bright MLS, MRED, The MLS/CLAW, and Realtracs are among the major players that have expanded nationwide and enacted rules that allow for what Reffkin called flexibility in how agents market homes for sale.
“If they have to compete for brokerages, brokerages win,” Reffkin said. “This is why I am supporting multiple listing services and portals that compete for our real estate professionals, and I’m working to inject competition in the MLS and portal ecosystem.”
Data from Chicago
Reffkin pointed to the partnership between Compass and Rocket-Redfin announced in February, where Compass agreed to share its full list of inventory with Redfin in exchange for leads from the portal.
Around the same time, Compass brands cut their direct listing feed agreements with Zillow, meaning that if an MLS cut Zillow’s access to the direct listing feeds it wouldn’t have access to for-sale inventory in that given market.
Credit: Canva
That’s what briefly happened in Chicago when MRED cut Zillow’s access to the MLS data feed and over half of all active listings in the region went dark on Zillow before a judge ordered them to be temporarily restored amid an ongoing federal lawsuit.
Meanwhile, Compass added over 20,000 coming-soon listings to Redfin as part of the partnership, and Redfin has sent over 60,000 leads to Compass agents.
Compass suggested that the framework has led to an increase in web traffic to its own search portal on Compass.com, with sessions growing 111 percent year-over-year in Chicago, far above growth in other markets.
“Is it unreasonable to expect that the company that has the most listings in the United States is the No. 1 place people search in the United States?” Reffkin asked. “I don’t think so.”
“The only reason that is not the case is because there are mandatory rules that are forcing listing agents to give up their data and their client data and give up their content to third party platforms,” he added.
“As these rules … go away — because we believe they are beyond anti-competitive, they’re illegal … as those go down and down and down every month and year, agents will just put them on our sites and then people will search where the inventory is,” he said. “We’ve done the research.”
Reffkin claimed that the partnership with Rocket led Zillow to launch Zillow Preview, a pre-marketing status that is new to the platform and that was announced less than three weeks after the Compass-Rocket partnership was announced.
“Competition resulted in more choices for agents and more choices for the consumer,” Reffkin said.
