Harbaugh Real Estate

Zillow vs. Compass: What's Actually Happening?

In this short series about the Zillow/Compass lawsuit, I will explore underlying forces that have the potential to change how homes are bought and sold in America. In this first post, I will outline the principles behind the tussle and define some key terms you should be aware of as a buyer or seller of residential real estate.

An image showing Zillow vs. Compass

Key Takeaways

Many of you reading this are clients for whom I have helped to buy or sell property in years past. You may be wondering why I am addressing something that has to do with a competing brokerage and Zillow, neither of which affect me directly. The answer is that this lawsuit has the potential to impact you as a consumer, and I think that you should at least be aware of what is happening in case you need to buy or sell real estate again in the future.

The Players

Let's first talk about the players in this lawsuit.

Compass is currently the largest residential real estate brokerage in America. After recently completing its acquisition of Anywhere Real Estate—which includes well-known brokerages such as Century 21 and Coldwell Banker—some analysts estimate that Compass' market share now is around 25%, meaning roughly one-fourth of all the homes bought and sold in the U.S. go through Compass. As of Q3 2025, Compass stated that it had a national market share of 5.63%. According to Anywhere's website, they had a 13% market share in 2019. Combining the two, you can see that conservatively, Compass now likely has at least a 20% market share.

Zillow, as you probably already know, is the largest online real estate search platform. There are a number of competitors (realtor.com, homes.com, redfin.com, etc.), but by all accounts, Zillow gets far more monthly views than anyone else. While Zillow did briefly venture into the iBuyer market a few years back, they are no longer competing directly with brokers and investors in this arena. Their business is strictly technology at this point, and they make most of their money by selling advertising based on the number of visitors to their site.

Definitions

Now for a few definitions that will help you understand what is happening. In this section I am going to simply give you objective facts about these terms. Later, I will tell you what I think about them and how they are used.

MLS stands for Multiple Listing Service. Think of the MLS as a database. It is a central digital repository for real estate listings. Agents and brokers from competing businesses all use the same MLS to market their listings. Thus, agents representing buyers are able to find all available listings in one location. An MLS generally represents a finite geographical area. For example, in the Dallas / Fort Worth metroplex, there is a single MLS that encompasses the whole region. Houston has its own MLS. Austin has its own MLS and so on. Generally speaking, when an agent takes a new listing, they enter the pictures and information about the listing into their local MLS so that all market participants can see that listing. Most of the listing data seen on Zillow, realtor.com, etc. come directly from the MLS. In some cases, brokerages have direct data-feed agreements with portals like Zillow. Even in those situations, listings are typically also entered into the MLS.

DOM stands for Days on Market. It is a figure that can be found in any MLS listing. Simply, it represents the number of days the listing has been active in the MLS. DOM is significant to many people because it can indicate whether a property might be overpriced or if there has been great interest in a property. I will elaborate on this more in the upcoming posts in this series.

A private exclusive network is a pseudo-MLS contained within a single brokerage. Some large brokerages offer this as an option to sellers to list their property internally as a precursor to listing the property in the actual MLS. The idea is that an agent can "test the waters" before listing the property. This fundamentally derives from the fact that there is a traditional stigma associated with properties that have a high DOM relative to other properties (or that have had multiple price reductions). Many people see high DOM numbers and automatically assume there is a problem with the property. Obviously, this might lead to fewer offers and less interest, even if there really is no problem with the property. As a result, some brokerages attempt to get around this issue by offering a private exclusive option. Then, once the agent feels they have an accurate "market price," they list it in the MLS.

One other key term you should know is Clear Cooperation Policy. In 2020, the National Association of Realtors (NAR) adopted the “Clear Cooperation Policy,” which requires that if a listing is publicly marketed, it must be submitted to the MLS within one business day. This policy was designed to promote transparency and cooperation among brokerages, and it is this policy that has become a point of debate in several recent industry disputes.

Zillow and the Lawsuit

Several years ago, Compass publicly introduced its private exclusive option for sellers. Their pitch is, "Protect and maximize the value of your home. Listing as a Compass Private Exclusive lets you test price, gather insights, and build anticipation before going public." Their website even states that this strategy is designed to "build maximum exposure." Obviously, if a home were to be listed as a private exclusive listing and sell during that time, the home would never be listed in the MLS or Zillow.

After Compass began marketing its private exclusive option, Zillow decided to respond because it meant that some listings weren't being shown on Zillow. Zillow adopted a policy stating that any listing that gets publicly marketed in any way—a sign in the yard, a social media post, a newspaper or magazine write-up, a website or landing page spot, etc.—must be entered into the MLS within one business day. If the agent or broker does not do so, Zillow has the right to refuse showing the listing on its site for the duration of the listing agreement. Their public argument is that consumers are harmed if the listing stays private for any length of time. To clarify, Zillow is not attempting to mandate that all listings be shown in the MLS, only those listings that are being marketed in some public manner. This mirrors the NAR Clear Cooperation Policy. Again, more on this to come in subsequent posts.

Naturally, this upset Compass. So, they filed a lawsuit last year claiming that Zillow is a monopoly and is breaking antitrust laws by attempting to force Compass and others to comply with their policy. Compass argues that Zillow’s policy limits sellers’ marketing flexibility and reduces consumer choice. Meanwhile, Compass also filed an emergency injunction, asking a judge to require Zillow to show the listings while the lawsuit works its way through the courts.

Last week, the judge—U.S. District Judge Jeannette Vargas in Manhattan—ruled that a preliminary injunction is unwarranted because Compass is unlikely to successfully prove the merits of its claim in court. This means that Zillow can continue to exclude certain listings for at least the time being. And unless Compass ultimately prevails on the merits of its claim, Zillow will likely continue to be free to implement its current policy indefinitely.

For the record, I saw one statistic that showed Zillow only excluded a few hundred listings last year based on this policy. Anecdotally, I am almost certain there were many more private listings that ended up in the MLS last year after more than one day of being private. This suggests that Zillow may be exercising discretion in excluding listings. What criteria Zillow uses to exercise that discretion is unclear.

Conclusion and a Look Ahead

As I indicated at the beginning of this post, this lawsuit and the issues surrounding it are important to you because they touch on fundamental ways the real estate market works in our country. And they point to shifts that seem to be happening. Whether the lawsuit is ultimately successful or not, I think it is wise to explore the underpinnings of this case.

For example, why is DOM so crucial? Is it possible the importance of DOM is being inflated by market participants, including us agents? Are consumers actually being harmed by Zillow's policy? What about Compass' private exclusive policy? Is it harming or helping consumers? What happens if more brokerages start pushing private exclusive offerings? What might be the long term consequences of that on the entire real estate market? And if Compass continues to grow, does it reach a point where its private exclusive network is really just a shadow MLS?

I am going to write three more posts in this series to address these questions and more. In them, I will discuss:

  1. Private Listings and the Myth of DOM
  2. Does Zillow Actually Harm Consumers?
  3. Freedom, Transparency, and the Future of Housing Markets

As always, feel free to reach out if you have any questions or concerns about the market, even if you aren't buying or selling real estate.