Compass drops lawsuit against Zillow over listings ban as more sites embrace pre-marketing homes
Brokerage Compass dropped its lawsuit against Zillow after the listings giant said it would allow some pre-marketed homes on its platform, ending a multi-month fight between two real estate giants over how homes are advertised and sold.
Compass, the world’s largest brokerage, sued Zillow last year over its “Listing Access Standards,” which banned listings that had been marketed to only select buyers from appearing on its platform. Zillow’s move was a blow to Compass, which has made those types of listings central to its business model, arguing that they allowed sellers to test wish-list pricing without revealing potentially damaging data like time on market or past price history.
Following a multi-day hearing, a judge ruled last month that Zillow’s policy could remain in place while the lawsuit continued. On Tuesday, Zillow said it was updating its standards, citing how the listings environment had “evolved,” and said it would begin to display pre-marketed listings from companies including Keller Williams and Re/Max.
Compass, meanwhile, recently inked a deal with Redfin to display its “Coming Soon” listings, with its “Private Exclusives” to also appear on the site at a later date.
“Our goal has always been to give homeowners more choice to decide when, where, and how to market their homes," Compass CEO Robert Reffkin said in a statement. "We are pleased to see that other brokerages are now recognizing the strong consumer demand for more options in how they sell their homes. Homeowners deserve more choices, not fewer choices.”
“Zillow welcomes Compass’ decision to voluntarily withdraw its lawsuit. As we said from the outset, the claims lacked merit, and the court’s preliminary injunction ruling reinforced that view,” a representative for the company said in a statement. “Hidden listing networks that gate access to listings behind a registration wall or require buyers to work with a specific brokerage do not meet our standards and, to the extent Compass continues operating a network of inventory hidden in the shadows, those listings remain at odds with our standards.”
The standoff between Compass and Zillow stemmed from a National Association of Realtors policy designed to limit semi-private listings that are shown only to select buyers. The NAR initially required that all listings be broadly distributed on multiple-listing services within 24 hours of beginning marketing, but later loosened its requirements, allowing individual MLSs to set rules for sellers who want to delay the broad marketing of their homes.
Following the changes, Zillow announced its policy banning homes that had been marketed semi-privately from ever appearing on its site.
Shares of Zillow rose 2.3% to $46.27 late Wednesday after the suit was dismissed. Compass shares, meanwhile, dropped 5.3% to $8.08.
Claire Boston is a Senior Reporter for Yahoo Finance covering housing, mortgages, and home insurance.
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