How a legal battle of real estate titans affects home buyers

The housing market is poised for a comeback if and when certain interest rate policy conditions become more friendly for buyers and sellers

But even though there are more houses for sale, you may not see all of them on the biggest housing platform

Since 2023, every home buyer has used the Internet at some point during their home search

But in April, the largest platform, Zillow, decided to change its game

As of June 30th, any listing publicly marketed has to appear on a multiple listing service or MLS within 24 hours or else Zillow won't publish it

Agents pay to access and list homes on an MLS, which is generally regional

The listing service not only shows agents everything available, it also distributes information on listings to platforms like Zillow

And so we just believe that if a listing is publicly marketed somewhere, it should be publicly marketed everywhere. Right. And that's the crux of our philosophy

Raquel Russell is the vice president of agent success at Zillow Group. And over the last several months, a handful of brokerages have been talking a lot about these private listing networks

And I should say pocket listings, private listings have always existed, but they've always been the exception, not the rule

And quite frankly, they still are. Public marketing can be a sign in the yard, a social media post, or a listing on the brokerage company's own website

Zillow says its new standards get rid of barriers, bias, and backroom deals

It mirrors the National Association of Realtors' clear cooperation rules. It's basically about transparency and making sure everybody has a chance to see that property, maybe bid on that property

Zillow's a big deal in real estate. The company estimates 67% of home buyers used its websites and apps in 2023

It says more than 130 million homes appeared in its database in 2024

But could that number dwindle with its new listing access standards And what does it mean for the 100 of home buyers who look online So what going to happen is they are literally not going to know if they seeing every single

thing that's coming on the market. They just won't know, which means now they have to engage

a real estate agent. Zillow's rules aren't sitting well with real estate heavyweight Compass

which filed a lawsuit in June claiming Zillow is breaking federal antitrust laws

consumer behavior and the explosion of the internet and the way in which buyers and sellers

think about shopping for homes alongside all the other things they shop for has evolved

which created an opportunity, an opportunity that I think Portals, but most importantly

Zillow has benefited from. Ashton Alexander is a senior VP of strategy and business operations

at Compass. She says the company employs a three-phased marketing strategy. Here's how

that process works. First, the property is listed as a Compass private exclusive, like a beta test

to a smaller audience. Then it goes into Compass coming soon. This means it can live on the internet

it can be searched by anyone, but doesn't display days on market or price drop history

Then it goes live on all platforms, meaning it is active on MLS and pushed to third-party sites

like Zillow. You're not going to be penalized with the days on market starting to accrue. You're not

going to be penalized by price drop history being visible. This strategy wouldn't meet Zillow's 24

hour MLS requirement. And Russell argues what's good for the seller isn't always good for the

buyer. From a buyer perspective, we do believe that prospective buyers in a free market should

see what's happening in the market, should see the days on market for a home, should see if there

has been a price drop in the home. Zillow claims private listings caused sellers to leave more than

a billion dollars on the table over two years or about $5,000 less per home sold

Compass says Zillow is acting as a gatekeeper of home listings. This isn't about gatekeeping. This is about consumer transparency and making sure that

buyers have access to all the homes that are available I don think any of us want to go back into a world where buyers can only see certain homes and some homes or certain buyers can only see certain homes and some homes

So the two sides of this lawsuit have their positions fleshed out. What do real estate professionals think of the arguments

I think actually both Zillow and Compass are being disingenuous for their reasons for doing this

I'm Katie Spaniak. I am a real estate agent with the XP Realty. I have a YouTube channel that basically helps people sell their homes fast for more money

stress-free. So Zillow is, I would call it a necessary evil for us as real estate agents because truly

it is the most, I would say, user-friendly website out there that shows all the homes

that are on the market. I'll give Zillow some flowers and NAR some flowers on this

I'm Rob Keilman. I am a real estate agent in coastal Virginia

I also am the co-host and producer of the Real Estate Talk podcast

I like the fact that everybody's kind of on a loving level playing field and we can, I can compete against agents at other firms with no problem in that regard because we're using the same tools

The problem I have though is that Compass is saying we're going to just market your listing to Compass agents

That, and that is not giving the sellers enough exposure. Sites like Zillow, Redfin and Realtor.com are now mainstays of the home buying experience

Zillow claims the motivation behind the change is fairness and transparency. The other side says there's another factor in play

They're a for-profit company. They're trying to make money. And the way they do that is by selling leads

They want to get the maximum number of clicks. And that's what they're driving for

So here's how Zillow leads work. Let's say you're just starting out on your home buying journey

Before you even sign with a real estate agent, you find the perfect home

So you click the contact agent button. Instead of the listing agent, Zillow routes you to an agent or team in the area that bought the lead

Before they show the house, the buyer agent gets that Zillow user to sign with them

And here what I could say about Zillow leads They good Good And they very expensive Very expensive Zillow needs to continue to get people to go to Zillow And if they don have all of the

listings that are out there, they can't get the agents to get the leads because their agents

won't pay for leads if they know all the listings aren't there. Spaniac focuses on home sellers. So

she's the listing agent. And she'll be the first to tell you as a buyer going to the listing agent

isn't your best course of action. A lot of buyers actually think that they can go to the

listing agent and they're going to get a deal on the house. I do not like dual agency. I don't

I don't like it at all. It's, I don't, I mean, I think it's not good for sellers and buyers

Who am I representing? I have done it. And ultimately somebody's always angry

Zillow's new standards take effect as housing inventory in 22 of the 50 largest cities is back

at pre-pandemic levels. But Realtor.com says it's not officially a buyer's market quite yet

It's really going to depend on where you are. It's more choice for buyers, but not a lot of

other buyers are buying because stuff is so damn expensive with the interest rates on mortgages

The average 30-year fixed mortgage is above 6.5%. But many existing owners are locked into rates

between 3% and 4%. It's going to take a cut to the Federal Reserve's Fed funds rate to get the

cost of mortgages down and spur the market. Jerome Powell better cut these damn interest rates

so that we can get affordable housing again. When that happens is the people who are sitting on the

two and the three percent can finally say, you know what, I'm going to now buy a new home and

it's not going to be worse than what I'm living in and more money. Until it gets down, the market's

going to stay in this weird kind of low inventory and high inventory depending on the states that

in. For now, traders predict the Fed will cut rates for the first time this year in September

For Straight Air News, I'm Simone Del Rosario. Read and watch the news with the unbiased straight facts by downloading the SAN app today