Zillow is making a request to cancel the “no commingling” rule from The National Association of REALTORS® (NAR) MLS Policy by placing a sponsored content article in Inman News.
Basically, the rule says that if you are displaying IDX listings as a broker participant in the MLS, then you cannot blend those listings with other listings that are not contributed to the MLS.
In the sponsored ad published by Inman News, Errol Samuelson of Zillow says,
“Under that rule today, we can’t show, for example, an auction listing next to an MLS listing. If there’s a home builder who is building a new community, we can’t show those builders’ listings next to the MLS listings. And so what happens is a buyer may not be aware that they’re missing out, they’re not seeing those other listings in the main search results.”
That is a very reasonable argument in that context. There are many other brokers who operate businesses in New Home and Property Management where the builder or property owner does not want the broker to submit the listing to the MLS. It was a very common request when the offer of compensation was a requirement. Now that it is not, there is little reason why a broker would not follow the ClearCooperation Policy (CCP) and include those listings.
Here is where it gets very interesting.
Zillow is a broker who publishes new home and rental listings today on their website that are not submitted to the MLS.
Isn’t this heresy? Isn’t Zillow in violation of Clear Cooperation?
What about FSBO listings on Zillow?
If Zillow is a broker, aren’t they required to contribute those listings to the respective MLSs in compliance with Clear Cooperation within one day of advertising those listings?
I looked at posting my home for sale on Zillow today. Here is what I found in their terms and conditions.
Post once and your home will be listed on both Zillow and Trulia, reaching buyers on the largest real estate network on the Web. Plus, home shoppers receive emails about new homes on the market – including yours.
And it gets better.
In the Inman sponsored ad, Samuelson makes the argument against brokers contributing listings to private networks.
“When you put a listing into a private network, sellers get hurt. Private networks, or “pocket listings,” are also bad for buyers. We’ve always believed in transparency at Zillow, and when listings sit behind a velvet rope in a private network, the only way that a buyer can get access to those listings is by being forced to work with the brokerages operating that network. It reduces that buyer’s choice. They may have an agent they’ve known for a long time, an agent they enjoy working with, who they click with and now they can’t work with that agent if they aren’t at the brokerage that operates the private network.”
The Department of Justice argues that the term “Private Network” is actually a term for a competing MLS. Networks like Top Agents Network and the PLS claim in their filingings against NAR that they are MLSs. They are competing for membership and listings like any other MLS, and that the Clear Cooperation Policy is an antitrust policy that prohibits them from competing. In advertising listings that are off-mls (where Zillow is doing the exact same thing), private networks are created for listings that are exclusively on their websites.
This is where the Zillow statement to request repeal of the commingling rule gets very interesting.
If Zillow can publish listings as a broker on their brokerage website and commingle them with IDX listings, then they are creating a private network; with listings behind a velvet rope that only Zillow visitors may experience. Zillow is withholding those listings from the MLSs that they are participating in, violating the Clear Cooperation Policy that they outwardly support.
When is Zillow a broker participant in the MLS, and when are they an advertising portal?
I would argue that they cannot be acting as both, on the same domain. Neither can any other brokerage participant.
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Shouldn’t MLSs and Brokers be investigating Zillow’s violation of CCP for listings advertised on Zillow and not being contributed to the MLS within one day?
Here are some listings that they are advertising: New construction.
I guess that Zillow’s argument is that they are not the broker for these listings. As far as I know, most states have laws that prevent a broker from advertising listings without a listing agreement. Moreover, I would argue that the only way that Zillow can be an advertising portal (and a real estate broker) is to maintain the wall between IDX listings and non-listings, while remaining in compliance with the no commingling policy.
I could not agree more. Zillow chose to become a brokerage to get the information from the MLS sites and now wants to change rules that protect customers from being shut out of viewing them only to say that it is ok as long as it is Zillow doing so.