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Other listing portals should follow Zillow’s lead and enact a rule banning listings that aren’t submitted to a multiple listing service and published on listing sites within 24 hours of being publicly marketed, according to Douglas Miller, a real estate broker, attorney and executive director of the volunteer-run nonprofit Consumer Advocates in American Real Estate (CAARE).
Miller is also the initiator of the first major antitrust lawsuit challenging the U.S. commission structure, filed in March 2019 and known as Moehrl. Moehrl, along with similar bomshell suit Sitzer/Burnett, was settled last year to the tune of more than $1 billion total across the real estate industry.
“Zillow’s decision to limit private listing networks is not just a policy tweak, but a stand for consumer protection, marketplace transparency, and real competition,” Miller wrote in a white paper released Monday.
“For too long, the real estate industry has allowed dominant brokers to game the system with impunity. This is a rare moment of alignment between a tech platform, legal reformers, and consumer advocates. The market, and the public, will be better for it.”
According to CAARE, Zillow’s new rule helps thwart private listing networks (PLNs), which the paper defines as “properties marketed internally by a brokerage or to a limited group of agents.”
The nonprofit contends that PLNs “serve to consolidate power within large brokerages” by increasing the likelihood of double-ended deals, in part by steering and pressuring buyers to hire in-house agents on the promise that those agents have access to off-MLS listings.
“PLNs fragment the marketplace, reduce transparency, and allow dominant brokers to manipulate inventory and control who gets access to listings and when,” the paper says.
“This undermines the integrity of the entire system.”
Doug Miller
Moreover, CAARE maintains that the claims that PLNs offer sellers privacy and the ability to “test the market” are misleading.
“Testing the market without full exposure provides misleading data and undermines the core principle of market competition,” Miller wrote.
“A seller cannot truly gauge interest or value without access to a wide pool of potential buyers.
“As for privacy, listing your home for sale inherently requires some level of public disclosure. There are already established ways to manage privacy—such as restricted showing times or NDAs for luxury listings—without sacrificing public visibility.”
The paper points to a 2021 Bright MLS study that found that homes marketed through the MLS sold for an average of 16.98 percent more than those that were not to underscore PLNs’ impact on sellers.
“PLNs restrict exposure, which limits competition among buyers,” the paper says.
“Fewer offers typically mean lower sale prices. Sellers are often not fully informed of the tradeoffs and may be misled into believing that private marketing is a strategic advantage.”
CAARE’s paper alleges that NAR’s Clear Cooperation Policy, which requires that listings be submitted to an MLS within one business day of being publicly marketed, actually made pocket listings worse — contrary to its stated intention. This is due to the policy’s exception for office exclusives — a loophole CAARE said effectively legalized “a new form of inventory hoarding.”
According to CAARE, Zillow new policy “[a]ligns with the original intent of CCP—to prevent hidden inventory,” “[r]estores visibility for buyers,” “[p]ressures brokers to abandon self-serving listing practices,” and “[s]ignals a major tech platform is willing to challenge the old brokerage cartel.”
“Zillow’s stance reflects a growing awareness that the traditional brokerage model too often prioritizes internal deal flow over client outcomes,” the paper adds.
“When inventory is withheld for the benefit of internal agents or affiliate relationships, the consumer loses.”
Further, the office exclusives exception is used to ignore or reinterpret the CCP such that it is made meaningless, according to Miller.
“I’ve personally seen agents violate this rule on a large scale,” he told Inman via email.
“Many justify it by claiming that marketing to their ‘sphere of influence’—friends, past clients, and social media followers—isn’t truly public. But it absolutely is. It’s public marketing masquerading as private outreach.”
Miller stressed that the CCP should have banned office exclusives but instead “NAR got it completely backward” and “carved out a gaping loophole for them” which then resulted in the policy “wip[ing] out the legitimate FSBO brokerage model that had been empowering sellers with affordable, public-facing marketing alternatives.”
According to Miller, sellers used to be able to list their homes with FSBO brokers for a flat fee to get public exposure on sites like Zillow without using the MLS.
“If their home didn’t sell, they could then pay a little more to upgrade to an MLS listing,” Miller said. “It gave sellers options and broke the Realtor stranglehold on visibility.”
But “CCP forced FSBO brokers to either list on the MLS or stop marketing publicly—effectively shutting them out of the market their clients relied on,” Miller added.
“It was a classic restraint of trade—an anticompetitive tactic masquerading as reform. Any FSBO firm or seller harmed by this policy has potential legal claims.”
He said he would have supported CCP if it had eliminated office exclusives, so long as it also allowed FSBO firms to market publicly without being “forced” to use the MLS.
“CCP was pitched as a pro-consumer reform,” Miller said.
“In reality, it entrenched broker power and crushed competition from innovators who were helping sellers cut costs and preserve autonomy.”
Zillow’s new rule will not apply to FSBOs, which CAARE said “implicitly supports the role of consumer-first FSBO models by creating a more level playing field for alternative listing strategies.”
CAARE’s paper tarred NAR’s new delayed marketing exempt listings with the same brush as office exclusives, calling them private listing networks as well — even though, once the policy is implemented, DMELs must be immediately entered into the MLS and will be available to Zillow and other listing sites through Virtual Office Website (VOW) listing feeds.
VOW sites require consumers to register in order to see certain information not available on Internet Data Exchange (IDX) websites.
“DMELs appear on VOW feeds once entered into the MLS, but that doesn’t solve the access problem,” Miller told Inman.
“VOW visibility is not the same as full public exposure. VOWs often require consumer registration, often include restrictions on how data is displayed, and are generally less accessible and far less visible than open IDX syndication to major platforms like Zillow and Realtor.com.
“The difference is not technical—it’s practical: Most DIY [unrepresented] buyers and smaller brokerages rely on open public platforms, not VOWs behind registration walls.”
“They’re often completely unaware these properties exist during the delay window. Many rely solely on public platforms, and DMELs rob them of fair access,” he added.
Because listings’ “discoverability” is delayed, that gives large brokers and their agents “a critical head start,” according to Miller.
“During that window, listings can be quietly marketed within firms or to preferred clients before the public ever has meaningful access,” he said.
“That’s how DMELs function as temporary private listing networks—even within the MLS. In a fair system, all buyers—represented or not—should get equal access at the same time. DMELs disrupt that, and the harm is real.”
Like fellow consumer watchdog the Consumer Policy Center, CAARE called on the U.S. Department of Justice (DOJ) to monitor the use of PLNs to restrict competition and consumer choice. CAARE also urged regulators to close the office exclusive loophole and ban dual and designated agency so that no agent or broker can represent both sides of a deal.
“PNLs exploit the trust and reliance of buyers and sellers,” Miller said. “They are a consumer abomination that survives only because enforcement is weak and the financial incentives for brokers are too strong to resist.
“They need to be stopped—not protected.”
Email Andrea V. Brambila.
