In a fiery letter directed at real estate agents, CoStar CEO Andy Florance has launched a fierce critique of Zillow, accusing the online real estate giant of taking a self-serving stance by banning certain private listings. "Zillow has overplayed its hand," he declared, stirring up tensions in the competitive housing market.

Florance's message, shared with agents last week, emphasized that even if Zillow blocks a listing, it will still be visible on Homes.com and other major platforms, including Redfin and Realtor.com, which collectively attract an astounding 418 million visitors each month.

However, Zillow's decision has garnered support from within the industry. On Monday, Redfin CEO Glenn Kelman publicly endorsed Zillow's approach, stating that Redfin would not publish any listings that haven't been widely shared via the MLS. He asserted that all buyers deserve equal access to listings.

What Zillow's Move Means For Homeowners

Zillow's recent announcement entails a ban on listings that are marketed but not made available through the MLS. Errol Samuelson, Zillow's Chief Industry Development Officer, explained that if a property is marketed, it should be accessible to all potential buyers to promote fairness in the market.

Moreover, research conducted by Zillow and Bright MLS indicates that off-MLS listings can lead to consumers paying thousands more for homes, disproportionately affecting sellers in communities of color.

Florance's Call to Action

In his letter, Florance urged agents to collaborate with Homes.com, claiming it to be more "agent-friendly" while ensuring listings receive proper attribution. "Your Listing, Your Lead" is the mantra he touted, highlighting that Homes.com never diverts leads to competing agents or takes commission splits.

"This isn’t about protecting consumers; it’s about preserving Zillow’s profitability by selling your leads to competing agents," Florance asserted, clarifying his stance against Zillow's business model.

Industry Response and Future Implications

Other major portals are weighing in on the matter as well. A spokesperson from Realtor.com emphasized their commitment to listing cooperation, advocating for maximum exposure for sellers and fairness in the market.

Meanwhile, Redfin has called for an innovative "coming-soon designation" for listings that prevents search sites from showing how long a home has been up for sale, which could encourage sellers to use the MLS more effectively.

Background on the Debate

The tension stems from Zillow’s new standards, which are framed as a response to the controversial Clear Cooperation Policy, mandating that listings be submitted to the MLS within a day of being publicly marketed. The National Association of Realtors reaffirmed this policy recently, adding Multiple Listing Options for Sellers.

Florance criticized the decision, insisting that real estate portals need to maintain neutrality. He concluded his letter by encouraging agents who feel pressured by Zillow to contact the U.S. Department of Justice, claiming that Zillow’s heavy-handed tactics could be deemed anti-competitive.