Zillow Flexes its Muscles, eXp Commits First & More of Anthony’s CCP Updates

Anthony Lamacchia:

Zillow to prohibit listings that are privately marketed. Zillow and eXp announced consumer-first commitment to real estate transparency. The business case for exclusive inventory. As new real estate listings rules take effect, will buyers and sellers benefit? NAR new IDX rules move us closer to another lawsuit over CCP. Good God, things have been crazy for a few weeks ever since NAR came out with the now famous delayed marketing exempt listing option with respect to CCP. Now, in my last video, I talked about that. I broke down CCP, the clear cooperation policy, and I broke down this new delayed marketing-exempt listing process, which is spelled out here on this graphic.

What I told you all is I would be back with my position. I was planning on filming this today anyway, and then all of a sudden last night, boom, Zillow comes out and says, if you do any private marketing publicly, but private meaning off of MLS, and then it doesn’t sell and you want to go on Zillow, you can’t do that. That’s a hard position. eXp, the first major brokerage to commit not only to that, but basically said– Leo Pareja, who’s right there, very talented CEO, expert in all things real estate, and an extreme expert internationally with how things work in other countries. He is deeply concerned that our American real estate system is just going to fall apart, which would be horrible for buyers and sellers.

That’s his biggest concern. That’s why it’s no mistake that eXp is the first company to commit. I’ll read this headline in Bloomberg last night. “eXp Realty, a vocal advocate for transparency in real estate and the number one brokerage by transaction count in the US is the first to join Zillow and commit to posting listings in the Multiple Listing Service within one day of publicly marketing to consumers and ensuring that eXp listings are on Zillow and available to the largest possible audience.” This is so interesting, folks. I want to say to all of our real estate friends out there, all of mine that are watching, many of you are spoiled over the last five to eight years with everything selling quickly.

Many of you, and I even think there’s some people that are running some big companies that are losing sight of this. Many of you are forgetting the days of 15 years ago, 12 to 20 years ago, where homes didn’t sell immediately, where it was deeply concerning to even get a showing on your house. Your seller would go ballistic if you weren’t getting action on that property. We’re headed back there in many markets. In the Northeast up here, still low inventory, but it is increasing. Buyers have more hesitation. In South Florida, or really all of Florida, Texas, other Southern states, they have higher inventory. The pressure from sellers to expose properties across all channels goes up in the market we’re headed into.

The market that we’ve been in for five years, there’s not as much pressure from sellers on that. Sellers have the ability to get cocky. When Robert Reffkin at Compass says, “Oh, people want the right to privately market their homes, however they want.” They do have a right in some ways, especially with the new rules, but very, very, very, very few sellers actually want to do that. Anyone who tries to say it’s 20% of sellers, they’re full of shit. That’s just not the truth. It’s not 20% of sellers. It might be 0.20% of sellers. In the market we’re headed into over the next five years, less sellers are going to want to do it.

Really, let’s think about it. When there’s a syndication issue, when a listing is listed and there’s a syndication issue and it doesn’t end up on Zillow within a few hours, sellers are– they’re calling their agents, “Why isn’t my house on Zillow? Why isn’t my house on Zillow?” Zillow knows that and they’re flexing their muscles. I have to say, I don’t blame them. I think this is a brilliant move by Rich, Lloyd, Jeremy, Errol, these are smart people. What’s interesting, and the irony, the irony, so many in the brokerage space connected to NAR have been criticizing Zillow for many years.

I’ve had mostly a good relationship with them. We’ve banged heads like any company will do with any vendor on occasion. I’ve had mostly a good relationship with them, but I’ve respected their intelligence all along. I’ve always said, these are smart people. The move they’re making here is brilliant. The irony is, it’s somewhat going to save organized real estate, which is good for buyers and sellers. The NAR people who have been against Zillow, they’re waking up this morning going, “Yes, maybe Zillow’s not so bad.” Think about it. What would I have rather? I promised you all I’d give my position in this video. I would rather CCP stay the way it was.

I think that it was a good policy. I think it was put in place for good reason. I did reevaluate that decision a few times in the last year, but I think it was right. Think about it. NAR was caught in a bind. They got the DOJ breathing down their throat saying sellers should get choice. Robert Reffkin’s out there screaming from every mountaintop, “It’s not clear cooperation, it’s forced cooperation. Sellers should have a choice, seller choice.” Then he’s also saying things like, “It hurts a seller to have days on market. It hurts a seller to have price-changing history.” Oh, okay. It hurts a buyer if you don’t show those kinds of things.

Look at Florida right now, there’s higher days on market everywhere. Many markets over 100 days on market. The buyers deserve to know. Buyers are a consumer here that should be concerned about as well. We shouldn’t just say, “Oh, it’s all about the sellers.” Now I understand some posturing with that with Robert, trying to help his big agents in big cities, et cetera, but that’s an issue, and buyers are due that transparency. Our brilliant general counsel, he sent myself and Jerry who’s in the next room, a video the other day.

Not a video. He sent an email and he said– I said, NAR is in a bind, and he responded and he said, “If they provide more transparency to buyers, then they hurt seller choice. If they provide more choices to sellers, then they risk freezing out certain buyers. No way to avoid the dilemma. They’re just trying to find the right balance.” That’s tough. Then they come out three weeks ago and they please all the people, which seems to include the DOJ with, “Hey, we’re sticking with CCP, but we’re adding this delayed marketing exempt listing option.” Stay with me, stay with me. Don’t end the video. By the way, like it along the way, if you could, we’d appreciate that.

Within a week, Mike DelPrete comes out with the business case for exclusive inventory. Classic Mike DelPrete breaks everything down, breaks down all the numbers, explains the differences in the commissions. Basically paints a picture that, “Hey, it’s financially better for brokerages if they keep the listing in-house.” Yes, I guess. I don’t always agree with that notion. If we have a buyer and a seller, and the seller sells with us, if one of our buyers buys that listing or buys another listing out in the marketplace, doesn’t really make much of a financial difference, if any, to my brokerage. Some people think that, and I understand parts of that argument.

Then Mike put this image in. I actually don’t know if Compass actually has this billboard out there. I just want to qualify it with that. See, “25% of the homes for sale one week before any other site, where homeowners choose to market first. No days on market, no price drop in history, no price drop history, Compass, compass.com.” Obviously, they’re doing this to compete with Zillow, but back to the point. This article comes out. Then another one comes out in USA Today. “As new real estate listings rules take effect, will buyers and sellers benefit?” You got Stephen Brobeck. Here he is, here he is. “If private listings increase, the market will become more chaotic, inefficient, and subject to manipulation.” He’s right.

See, the funny thing about Brobeck is this guy was on the right side of things for many years, going all the way back to buyer agency. Then he ruined it, ruined his credibility, when he decided to take Ketchmark’s side. He’s a senior fellow at the– I don’t know, some consumer policy center. Who cares? The point I’m getting at is, he’s right about what he said here. “If private listings increase, the market will become more chaotic, inefficient, and subject to manipulation.” He’s in the USA Today saying that. All these publications, they take quotes from him because he’s a consumer advocate, but then he took the other side, which screwed buyers in the big case.

Anyway, I’ll move on and get my blood pressure back down. Then, there’s more to the article. “Buyer choice just got really limited.” The point I’m getting at in showing you all this is, NAR can’t win. Let me keep going here. This is the USA Today. “This creates a new category that is exclusive and restricts transparency.” Now remember, these are articles post-NAR coming out with this. “We believe the rule change opens the door to increased housing discrimination and allows sellers to restrict public access to critically important information with regard to housing availability.”

This is why CCP went in place. Inventory was going down. It was getting more tempting for brokerages to hoard listings. That’s why in November of ’19, this was voted on and went in place in the spring of ’20. I was there. I could go on and on reading quotes. Here’s another article. This is by Darryl Davis, very talented real estate trainer. “NAR’s new IDX rule moves us closer to another lawsuit over CCP.” He came out hard. I chose not to come out as hard because I understand the position NAR is in. They can’t win. Just like Mike said, provide more transparency to buyers and you hurt sellers’ choice. Provide more choice to sellers, you risk freezing out certain buyers. Darryl Davis comes out with this.

Then James Dwiggins, great guy, smart guy, he’s screaming from the rooftops, which he doesn’t even need rooftops. He’s 6’8″. Anyway, if you read this, he’s telling a wonderful story about the history of his family in real estate. Then he explains some good things. “From Day 1, I have believed the Clear Cooperation Policy (except for the office exclusive carve out) has been about protecting home buyers, sellers from exclusionary and predatory practices. It provides complete transparency into the US real estate market,” Leo has said the same thing, “and has helped prevent steering and redlining because everyone has equal access.” That’s my argument. That’s Leo’s argument. That’s James’ argument.

If you read this, it’s quite an op-ed. He put it into Inman. Then he says here, “Now we’re creating an entirely new category called delayed marketing exempt listing that more brokerages will use.” Then he talks about more large real estate brokerages launch their own exclusive programs. I’m going to talk about that in a minute. “Pulling more inventory from MLS and the general marketplace. They’ll be forced to do it to compete.” Yes, they’ll be forced to do it. No doubt. I said that in one of Reffkin’s posts. I commented. He said, “Oh, it’s going to be funny when CCP–” This is like a month ago. “It’ll be funny when CCP comes undone, and then everyone’s jumping on the bandwagon to have their own internal system.”

I said, “Yes, that’s capitalism. You force us to do it, we’re going to do it. Now, we don’t have to create our own new system here at Lamacchia Realty. We have had a Lamacchia link system here since about 2018, and it has been used to match our buyers and sellers in our system before and during when they’re on the market. We have hundreds of thousands of buyer leads in our system. We have thousands upon thousands of seller leads. Dave Caroli, our head of sales and operations, he came up with a genius idea years ago. He said, “Why don’t we have a system that’s matching?”

It’s funny. I read this article in Inman. “As brokerages rush to launch their own private networks,” we’re not rushing to launch anything. We already have it. We’re a step ahead and we’re ready for this. Even with that system, the overwhelming majority of our listings have gone through MLS. Why wouldn’t they? It makes more sense. It’s better for the seller, blah, blah, blah, blah, blah, blah. Now, back to the article. “Zillow to prohibit listings that are privately marketed.” I want to pick this apart for you all. Interesting comments from Errol in here. Errol’s a smart guy. Errol Samuelson, I believe, is his name. Yes, it is.

The portal will operate by the motto that a listing marketed to any buyer must be available to every buyer. Smart wording. “The new standards will go into effect on both Zillow and Trulia beginning May 1st.” This is interesting. “If it has been publicly marketed to a select group instead of an entire population via the MLS, Zillow will not publish the listing at all.” Listen closely, listing brokers. If you decide to go with this delayed marketing exempt listing, which forces you to put it in the MLS, but also forces you to only market it brokerage to brokerage and consumers don’t see it, Zillow’s going to see that and they’re going to say, “Now you’re not listing on Zillow.” That’s what they’re going to say.

They’re taking a hard line. I have to say, I think it’s a brilliant move. Errol went on to say, “The fact of the matter is this policy applies to any status. It could be a coming soon. It could be a delayed marketing. It could be an active listing.” Yes, he’s saying it applies to all, but a brokerage marketing internally within their company, they’re not going to be able to police that no matter how good they are at tech. He goes on and on about his position. Let’s see here. Now let’s read about eXp. eXp, which has long advocated for industry transparency, has vowed to support Zillow’s commitment to clear cooperation, which stipulates listings must be placed on the MLS within 24 hours of being publicly marketed.”

This has gone on everywhere. Unless you’re in some private MLS like we are here in Massachusetts operating on MLS pin, that’s different. Leo goes on to say, “eXp will always take a position that protects consumers first. That’s non-negotiable.” Then he talks about the partnership. I think I should read this. “This partnership is about delivering value and building trust, two things that matter more than ever in today’s rapidly evolving real estate landscape. By tapping into Zillow’s massive consumer reach, eXp agents are positioned to serve more people and create more opportunity. At the end of the day, this is a strategic move that reflects our relentless commitment to innovation.”

Yes, blah, blah, blah, blah, blah. He’s touting his company. I would be too. Then Errol says, “It’s simple. Sellers want exposure, and buyers deserve access.” A lot of good commentary in here. Any way you look at this, Zillow has made a huge power move here. They’ve basically made themselves the enforcer. Think about that one. All along, NAR and the MLSs have been the enforcers. Zillow just stepped in and said, “Now we’re the enforcer.” Now, they didn’t say that, but they basically said that, and that’s what’s happened here. I can’t blame them. I just want to mention a couple things with Zillow, and then I want to talk to Compass agents at Compass.

Zillow doing this, they’re doing it to protect themselves, but they’re also doing it because they realize NAR is in a bind. What did I just show you? NAR comes out, they make a slight adjustment. Everybody’s saying, “You’re going to get sued. That’s the next lawsuit.” Guess what? The goddamn plaintiff’s attorneys all over America, they’re sitting there reading the articles going, “Ooh, here’s the next lawsuit.” Remember what I told you all. These plaintiffs’ attorneys, they’re not going to just go away. They’re not going to go away until they get punched in the mouth. When they get punched in the mouth, legally I’m talking about, then they’re obviously going to change position and go pick on another industry.

Compass and Compass agents, many of you have been following Robert, and I don’t knock you for doing that, and you’ve been backing Robert’s position of seller choice, and sellers should be able to choose, they should be able to privately market, et cetera. I get it, and hey, I’m fortunate that many agents here at Lamacchia Realty follow what I preach as well and support me, and I appreciate that. I just want you to think about something, and I want you to think hard. Follow me here. If you work in a market where there’s a ton of Anywhere companies– some of you are like, “What does he mean Anywhere companies?” Sotheby’s, Coldwell Banker, Century 21.

If you work in a market that they have high market share like I do here in Eastern Massachusetts, when I say I, I work in this market, those companies together have way more market share than I do. They’re all owned by Anywhere Real Estate. Anywhere is working on creating an internal system to market properties cross brands. Think about that one. Let’s say in some markets they’ve got 30% market share. That means you, as a Compass agent, or Lamacchia agents, or whoever, you’re going to have restricted access, and you’re not going to be able to reach 30% of the properties that are out there. It’s not good for buyers and sellers, and it’s undoubtedly going to be harder for the small brokerages to compete.

Luckily, in most of the markets that we’re in, we have pretty strong market share, and I feel confident, but there’s always some markets that we’re new in, and we don’t have as strong a market share. Think about that as a Compass agent, watch what you wish for. Think about all the co-brokes you do with Coldwell Banker, Century 21, and all those companies. If they band together and they market the listings only to one another, now you don’t have access to those listings for your buyers. That’s a problem. That’s something that everyone should be thinking about. That’s it, folks. Good luck. Stay tuned in. Happy home selling.

Learn more about Anthony Lamacchia