In case you haven’t seen the headlines…
A lot of people are pitting Compass (the largest independent real estate brokerage in the country) against Zillow (the largest public aggregator of listings in the country) over the future of real estate. The most central factor of the debate is the publicity of listing data, that is, when each (and every!) listing shows up on publicly available sites such as local MLS databases and aggregators like Zillow.
This debate is not new. In fact, you may have seen my article last year about the pros and cons of off market sales. These listings are referred to commonly as “Office Exclusives” and have been used by every brokerage for decades as a tool for their clients. They are making headlines now as MLS’s and companies like Zillow and Redfin are pushing back against brokerages exercising this right. Since listings are a source of revenue for all things real estate, all parties are taking an understandably strong stance to protect their income and place in the market.
The Stance of Compass
Compass, as a brokerage, believes that sellers deserve more flexibility in how they sell their home. As agents, we have a responsibility to protect our clients’ best interests and sometimes that means being discreet about sales, only sharing a property with a select group of peers to facilitate a deal without public scrutiny or unwanted press.
While Compass is pushing for the ability to market listings more privately, Compass is not advocating that ALL listings be marketed this way. There is still immense value “going public,” and Compass sees that as part of the marketing strategy.
The Stance of Zillow
The headlines are calling out Zillow, but really the other side of the debate is held by all public listing services (Zillow, Redfin, Local MLS’s around the country, etc.). They argue that maximum exposure of listings (being featured on their platforms which are free to the public) is the most fair and balanced way for transactions to take place.
For them, the only way to achieve this fairness and balance is to insist that every single property be featured. And in order to force all brokerages (not just Compass) to comply, these entities are drawing hard lines around what they will and will not tolerate regarding the marketing of Office Exclusives.
What is currently allowed
As of right now, as an agent in Greenwich (keep in mind that every jurisdiction is different because each MLS is different) here are the available options to offer my clients in an exclusive arrangement:
Compass Private Exclusive – an “Office Exclusive” that I can not publicly market. Meaning that if I so much as mention your home in a social media post or eblast, I risk being fined, banned from the MLS or even have my license revoked. To avoid those consequences, I leverage my personal network to market your home 1-on-1 to agents and buyers that I know personally may be interested. This is a great way to test price, gain initial interest and maybe even sell the property without your neighbors knowing until they see the moving truck.
Compass Coming Soon – a teaser of your listing that can only be live on Compass.com for one business day before it must be published to the MLS (or risk the same consequences as above). This builds momentum for a public launch and one final day to make any adjustments to a listing (price, terms, etc.) before your home starts accumulating Days on Market which can have a negative impact on your sellability as time goes on.
Public Listing – shared to all MLS sites and aggregators. Once published here, I can market the listing from social media and email, to print ads and digital banners. On the flip side, I do not have control over how your home shows up on public portals and Zillow and similar sites can also leverage your property for their own gain. For example, Zillow sells the ability for other agents to show up when consumers look at your listing even though I am the agent you’re working with.
What’s Best for You?
As your agent, my fiduciary responsibility is to sell your home for the highest price that can be achieved in the desired timeline and under the specific terms that best meet your needs. From flying completely under the radar to posting a massive billboard in Times Square, and every level of marketing in between, the choice should be yours.
Many people who oppose Compass (and the other brokerages leaning into Office Exclusives) tout that Compass is advocating for your listing to only show up for Compass agents, which may only be 5-10% of all agents in a given area. While for some sellers that is a 95% missed opportunity, for others it is 95% more discrete for them and their loved ones. Also, an office exclusive is not a permanent decision. You should have the choice of how long 5% of people can see it, 10% of people, and/or all 100% of people. Right now, the choice is being made for you.
Along with that forced choice is showcasing your listing with statements that may derail marketing efforts. For example, a Zestimate—often woefully inaccurate—is designed to entice consumers to use Zillow. It is not designed to help sell your house for a price that you think is fair. Zillow includes information about homes such as presumed risks for floods, fires, and other potential challenges without context or the advice of a professional (agent, attorney, inspector, etc.) which may dissuade buyers from even considering a property that actually would be a great fit given their own short and long term priorities.
At the end of the day, Compass, Zillow, and every Real Estate entity are prioritizing their own bottom lines—period. For Compass the bottom line is driven by empowering agents to do the best for their clients and maximize the equity in their homes. More freedom to market homes in accordance with our seller’s needs and what we know will likely bring the best result, allows us to sell more homes more quickly. For Zillow the bottom line is driven by selling false and negative information without context, disguised as “fairness.”
Look, the overwhelming majority of homes are marketed publicly on an MLS, including TeamJGB’s listings, and that marketplace is extremely efficient. But the fact that YOU are not in control of the dispossession of your most valuable asset makes no sense.
Think about how anything else in the country gets sold: the owner of the product decides which route to take when bringing the product to the marketplace. Costco or Target? Whole Foods or a booth at the Farmer’s Market? There is a reason that Amazon exists and thrives, but there is also a reason that Hermès is stunningly successful, and it’s not just their signature orange color…
There is a lot of noise out there. The best solution for you is more likely to come from a dedicated real estate professional than some hyperbolic headline. If you’re curious about what this debate means for you and your family, let’s chat.
Team JGB: Craig Gibson, Liz Levison, Julie Grace Burke, Jack Richards