Tensions between Compass CEO Robert Reffkin and Zillow are continuing to build in the lead up to Zillow’s new listing standards going into effect later this month.
On Friday, Reffkin highlighted Zillow’s iBuying business, which operated between 2018 and 2021, during which time Zillow bought more than 20,000 homes from homeowners who sold their properties directly to Zillow, bypassing the MLS.
“Now, Zillow research claims homeowners lose money if they don’t use the MLS,” Reffkin wrote. “When Zillow was making money buying homes off the MLS, it supported off-MLS sales. Now that it can’t profit from leads on those off-MLS listings, they say it’s bad for homeowners to list off the MLS. Either Zillow’s “research” that homes sell for less off the MLS is flawed, or they spent 3.5 years taking advantage of homesellers. Only one can be true.”
Reffkin’s claims that Zillow “profited” off its iBuying business is not completely accurate. In Q3 2021, Zillow reported a net loss of $328 million, mostly due to a $421 million net loss before taxes on Zillow Offers. In total Zillow lost roughly $1.5 billion in three years due to its iBuying program, but it was after the close of Q3 2021 that Zillow decided to shut down its iBuying program, citing of course the mounting losses the operation was causing for the firm.
After the close of its iBuying operation, Zillow struck a deal with iBuyer Opendoor in August 2022. Through the partnership, Zillow users can use the platform to request and offer from Opendoor. It is this partnership that Reffkin highlighted in a second LinkedIn post on Sunday.
“Even this weekend, ZIllow is sending emails like this to homeowners encouraging them to sell off the MLS through their Opendoor iBuyer partnership, despite Zilllow’s ‘research’ stating that homeowners lose money if they don’t use the MLS. On www.zillow.com/sell Zillow gives sellers four options to sell,” the Compass CEO wrote. “While all four options use the Zillow platform, two of the four options encourage homeowners to sell off the MLS. Zillow supports selling homes off the MLS if they can make money from it, but if an agent lists off the MLS where Zillow can’t make money from the listing then Zillow bans it. Zillow is ok with Zillow providing off-MLS options to homesellers, but Zillow bans agents that do so. The hypocrisy is crystal clear.”
The options Zillow gives sellers is selling a property with an agent, as a for sale by owner (FSBO) or an all-cash offer from Opendoor. According to Zillow’s research, in 2023 and 2024, home sellers who did not list on the MLS lost $1 billion in sale proceeds, an average of $5,000 each or 1.5% less than what those listing on the MLS sold for.; In communities of color, this number jumped to 3.2%, more than double the 1.2% loss recorded in majority-white neighborhoods, Zillow said.
In majority-Black neighborhoods, Zillow’s analysis found home sellers who did not list on the MLS saw a median sale price difference of $9,851, while in majority-Hispanic neighborhoods, the number jumped to $13,728.
In a variety of public forums, including in an opinion piece published in the Chicago Tribune last week, Errol Samuelson, Zillow’s head of investor relations, argued that Zillow supports a seller’s ability to market their home as they choose.
“To be clear, sellers and their agents have the choices they need to market their homes, whether their goal is to maximize price or privacy, or something in between. They can sell their home completely privately off the Multiple Listing Service and third-party websites. They can make it available only to other agents in the market to share with their buyers one-on-one. They can keep the address or photos from being shown online. They can even list it on the MLS but keep the listing off the internet entirely,” Samuelson wrote. “None of that is changing, nor should it. Sellers should retain full control over how and where they market their homes.”
Samuelson and Zillow claim that the option that Compass is trying to “protect” is one that is not about sellers but instead about their bottom line.
“They are choosing to make more money by persuading sellers that limiting which and how many buyers can see their home is somehow good. They are engineering private marketplaces that benefit themselves while actively harming buyers and sellers, all the while framing the practice as pro-consumer,” Samuelson wrote.
Zillow’s listing standards go into effect on June 30. The policy allows for delayed marketing exempt listings and “coming-soon” listings that are entered into the MLS within one day of public marketing, as well as true office exclusive properties that are only marketed within the listing brokerage or via one-to-one communication with agents at other firms.
Additionally, Zillow is allowing listing agents to share sneak peaks of listings on social media or in an email newsletter to buyers, as long as these posts do not include identifiable details about the property, such as price or address, or a call to action.
English (US) · 