War with Zillow

What is really happening behind the scenes with private listings and the growing tension between Compass and Zillow? In this episode of Ladies Who List, Chicago real estate agents Hayley Westhoff and Anna Theofanous break down the controversy surrounding pocket listings and why it matters to buyers and sellers.

They explain what private listings are, how they differ from MLS listings, and how policies like the National Association of Realtors Clear Cooperation rule and Zillow’s 24-hour policy impact listing visibility and buyer access. This episode explores why some sellers benefit from private marketing strategies, including testing pricing, avoiding days on market, protecting privacy, and timing a launch for maximum impact.

You will hear real examples of how pocket listings can help sellers avoid costly pricing mistakes, create demand before going public, and adapt to fast-moving market conditions. Hayley and Anna also discuss how Zillow’s stance affects buyers searching for homes, agents paying for leads, and why alternative platforms are gaining traction as listing visibility changes.

If you are a buyer or seller navigating today’s real estate market and want to understand how marketing strategies, private listings, and industry policies could affect your next move, this episode delivers clear insight into an issue shaping how homes are bought and sold.

Transcript

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(Transcribed by TurboScribe.ai. Go Unlimited to remove this message.) Welcome to our podcast, Ladies Who List. If you've ever wondered what really goes on behind the scenes in real estate, beyond the glitz and glamor of selling sunset and the drama of million dollar listing, you're in the right place. We dive into questions you've always had, educating you on how to be a smarter and more successful buyer and seller, and giving you the truth about buying, selling, and everything in between. I'm your host, Hailey Westhoff. And this is my lovely co-host. I'm Ana Theofanis. Before we get started on talking about this war between Compass and Zillow, we are gonna do a Would You Rather question and answer it at the end. So, Joe, could you pick out of a hat and read the question, please? Would you rather have spaghetti hair or sweat maple syrup? Oh my God! I have no idea, I'm gonna have to think about that one. I know what I'm gonna choose. Okay. Yeah, yeah. Oh, it's easy for you. It's very, it's easy for me. I'm excited to hear. All right, so today we have a very juicy topic. We are discussing the war of the online searching platforms, particularly Compass and Zillow. This is juicy and this is brand new. We've been hearing about it for a few months, but it is every day, the ante just keeps getting upped and upped and upped. And it's really something that most agents don't even fully understand. So we are going to educate you on this so you understand everything about it because it is really, really fascinating and a little scary, actually. And it's gonna affect you if you're a buyer and if you're a seller. So it's gonna be really important moving forward. Absolutely. In the market. So, well, let's first talk about what this war, or I like to say this bar fight is about. In theory, Zillow is claiming it is taking a more ethical stance and they are claiming that they do not believe that a listing should be privately listed or what we all know as a pocket listing. Ana, do you wanna explain what a pocket listing is? Yeah, of course. So it's basically a listing that's not ready for market yet. So whether it's prepping it for market or the seller hasn't found a house yet, it's a listing that isn't on all of the platforms accruing days on market yet. Exactly. So Zillow is taking the stance that they do not believe that a pocket listing or a private listing is in the seller's best interest. So that has been the uproar over the last few months. And another thing to note is that the NAR adopted a policy called clear cooperation. And what that said is that they would not allow a listing to be on the private listing network for longer than 24 hours. Which is ridiculous. That is crazy. Which is ridiculous. And we'll get into why that's crazy. Exactly. So let's talk about what is, just so our viewers fully understand, because I do think it's confusing. What is Zillow? So yeah, it's a search platform. Obviously, that's where a lot of buyers initially start their searches. But I think what people don't really understand is how they make their money, which is a huge piece of this. And that is through agents that pay Zillow to feed them leads. So basically, when you're looking at a house and it says, the next available time for showing is in 10 minutes or whatever at the bottom, you can click that and it will feed to an agent that will show you the listing, right? If a listing is not on the platform, then they're missing out on all of these sales. Exactly. So what you're saying is Zillow gets paid by real estate agents who buy essentially leads for people looking on Zillow. Exactly. So that is how they make their money. Of course, they also make a little bit of money off ads and whatnot, but they make money from buyers looking on their platform and agents paying because so many buyers look on their platform. Exactly. So that is ultimately what this, in my opinion, is all about. So Zillow is taking the stance that they do not think a private listing is in the seller's best interest. And Compass and other brokerages, it's not just Compass, by the way, but Compass is leading the charge here. Compass and other brokerages are taking the stance that a seller should have the right to choose how they wanna market their property. And while a pocket listing or a private listing may not be the best scenario for them or a certain property, it may be for a different seller and they should have that right to choose how they market their property. That's the biggest piece here is a seller should have the choice. It shouldn't be Zillow's decision. It shouldn't be Compass or any other brokerage's decision on how a seller wants to market their property. I agree. So I think that's really what this boils down to. And I think we should talk a little bit about what a pocket listing is and why 24 hours also is not nearly enough. Tell me a situation where it was in the best interest of the seller and why a seller might actually benefit from a private listing. So the market right now is super hot, right? So we're talking about Lakeview area, really hot market. My sellers wanted to list at a price that was far above the closed comps. We're seeing all these actives way above, but I like to price my properties with the closed comps and let the market drive it up. So we had this little bit of a battle over pricing and that was the perfect situation to list on the private networks because it's not accruing days on market. It allows us to try a price and see if there's truly is demand at that price. So we did and we had a handful of showings and at the price they wanted, we just didn't have any interest. So those five days were so important for us. And then we were able to list it at the price where we felt was more in line with the closed comps. And you only have one chance to make a first impression. Exactly. And it was the right one. It was the right move for that seller. They needed to test that price and it took the private network to test that price and get them to realize, okay, this is not a good idea. This is not gonna be a good first price on the MLS on the public market. And so it worked in that case. Oh, totally. And if we had gone on at the higher price, then it would have sat in a listing sitting in Lakeview or Lincoln Park or any of those Northern areas over two days is a red flag for a lot of buyers. I agree. And in the opposite sense, we've had plenty of listings where we test the price on the private network and realize it's too low. And we have 20 inquiries and people literally banging the door down and we raise the price. I have heard and seen comments online and social media that an agent should be confident enough to price the property right. I partially agree with that, but there is an element that there is no experience that we do not know what buyers are out there. We do not know. We know comps, we can look at close comps, but we do not know at this very minute, at this very moment, what buyers are out there and what is their appetite and what is their level of urgency. And it's not just price either. I mean, sometimes we wanna list it on the pocket network because the seller's not ready yet for one reason or another. They're packing, they have little kids, they haven't found their house yet, but we still want to get it out there in a casual setting where it's not accruing days on market without blasting it out yet. I agree. And for example, we just had a listing, we met in April and the listing wasn't gonna be ready until July. Why miss the best, the tail end of the spring market? We're on the cusp of the spring market and the summer market when they're getting ready for market. So in that sense, it did make the most sense to put it out there. And we may get a better price on the private listing network than waiting until July when 40% of the demand goes away. So there are scenarios where it could absolutely be in the best interest of the seller. And what about celebrities or someone who just doesn't want their home with their bedroom photos in bed or they're just very private and they don't wanna be on the public market. There are situations where people don't want their home broadcasted. The same reason why some sellers don't wanna for sale sign in their yard. You just wanna be a little bit more private about it and they should have that right. I agree. And everyone on the other side of this is saying, okay, the more exposure, the more offers, the higher the price. That is true. However, there are strategies with using the private market where you do get more exposure and it's just a little different. For instance, we just had a listing, we put it on the private network for five days. We did one round of showings. We told everyone before, we are not accepting offers until we go to the public market. So we got a bunch of showings, we got all the hype, we exposed it to all those people that saw it on the private listing network. And then we got to go again on the live market and then we accepted offers. So in that scenario, we were able to go on the private network, do a round of showings, go on the public network, do an open house and then accept offers. Exactly. But if you only have 24 hours on the private market, that doesn't give you enough time to do anything. I mean, what's the point? Exactly. We don't even have time to be having showings in that time. So- And let's talk about that because we haven't talked about that yet. So Zillow has now doubled down and not only are they taking the stance that private listings are not in the best interest of the seller, now they're actually going to ban listings that have been on the private market for longer than 24 hours. Can we talk about that for a second? That's crazy. That is huge. That's huge. That means if you're a seller that has been on the private network for five days, your listing may not appear at all on Zillow. A lot of our buyers that are on searches on our platform still look on Zillow for some reason. People just like the way it looks. So that's a problem. It is a problem. And then you have these other sites now that are coming in like homes.com, which I had never used as a search platform. I don't know about you, but they're taking a really interesting stance on it too. So they're now gonna blast out the listings that are getting blacklisted from Zillow. I think it's a brilliant business model. Speaking of business models, I think Zillow is digging their own grave. I do too. Because the buyers out there are gonna get the memo that, hey, not all the listings are on Zillow anymore. And who wants to use a platform where they may be missing out on listings? And they already have been losing buyers, right? Because they didn't have pocket listings on there. Now if buyers find out that active listings aren't even on there, what's the point? Now you've completely lost anyone that was looking on it. Exactly. So if I'm a buyer and I'm deciding what platform I'm gonna use, am I going to choose the platform that I know doesn't have all the listings? No. No. And then if I'm an agent paying for leads, am I gonna choose the platform that doesn't have the buyers looking on their platform? I think that this might personally might be the demise of Zillow. Yeah. And I'm not mad about it. I'm not mad about it either. We have never been Zillow agents, premier agents that buy leads. One last note about this is all the brokerages are taking the stance in what suits their platform the best. If you think about it, Zillow, they did not syndicate private listings. What stance are they gonna take? That they don't believe in private listings. And then other brokerages that do have the option of private listings on their platform are taking the stance that they believe that every seller should have the right. So I think you have to have all of the facts to really decide what stance you're going to take. Obviously we work for Compass. Compass is our brokerage, but I do truly, not just because Compass is our brokerage, but I really do truly and deeply believe that sellers should have the right to choose how they market their property. And in certain situations, not all, a private listing is the best option for a seller. All right. It's that time we need to answer the question and you are so confident. So I need to hear your answer first. Okay. First of all, spaghetti hair, no one's gonna talk to you. No one's gonna date you. Like that's a problem. Are we talking like spaghetti and red sauce or spaghetti and butter sauce? Either one. I don't want spaghetti hair. Because that matters. Okay. Would you, if it was butter sauce, you're in? Let me think about that. Okay. For me, I don't want spaghetti hair. I want to be cute. I want to look cute. I can't have anything weird like spaghetti hair. That's just not gonna, it's not gonna work. So, and if you're sweating maple syrup, you smell nice and sweet. I mean, maple syrup does not smell that bad. It smells good. But can you imagine like your armpits? It would be uncomfortable, but I'd rather feel uncomfortable than be outwardly crazy looking. I have good points. I'm gonna have to agree, but for a different reason. I don't sweat that much. Only if I go to hot yoga, which if those were my two options, I would just ban hot yoga from my life. If I was sweating maple syrup, I just kind of like. Just squirted on some. Yeah. I just, I just walk like this. Waffles around and just. All right. That's a wrap. So hopefully you enjoyed and learned a little bit about this crazy war. And it will be interesting to see where this goes and what happens. Thank you for tuning in. And until then, see you next time.