The War for Control in Real Estate: Commoditization vs. Seller Discretion

There is a war raging in the real estate industry. It’s a quiet, high-stakes battle being waged behind the scenes. But make no mistake, the outcome will affect millions of homeowners, tens of thousands of agents, and the future of how homes are bought and sold in America.

 

On one side is a powerful alliance: Zillow and the National Association of Realtors (NAR), along with its approximately 500 affiliated multiple listing services (MLSs), are pushing to commoditize the sale of homes, effectively to make every home look like just another loaf of bread on the shelf, getting stale over time. Their goal is to piece-by-piece strip away any uniqueness in how homes are marketed.

On the other side are those fighting for the rights of home sellers and their agents.

 

This involves people like me (Greg Hague), CEO of 72SOLD, the Inc. 5000 #1 ranked real estate firm in the Southwest. Another is Robert Reffkin, CEO of Compass, the nation’s largest brokerage by market share. We believe in preserving seller and listing agent discretion, the right to market homes creatively, strategically, and in the way that best serves the seller, not the online platforms.

 

 

Agents are now required to input homes into the MLS and onto Zillow within a day of any public marketing. Failure to comply comes with serious penalties, suspension, fines, even delisting.

Once in the system, Zillow and the MLSs impose even more limitations. Agents must follow strict rules in writing descriptive copy and cannot even encourage interested buyers to contact them to learn more about the home. There are also creativity-killing rules regarding online property photos. These rules severely restrict the professional discretion of listing agents, limiting their ability to differentiate a home in ways designed to create a perception of uniqueness and enhanced value.

What’s the impact? Homes are mass-uploaded, stripped of the advantages that exclusivity and timing can bring. They are all dumped into the same bucket, subjected to sale-price-damaging metrics like visible days on market and price changes… both of which can unfairly taint buyer perception. A home that hasn’t sold in 30 days appears “stale,” even if it’s priced right. A price reduction makes buyers think the seller is desperate. A price increase makes them look elsewhere.

Worse, Zillow’s “Contact Agent” button deceives buyers into thinking they’re being connected with the listing agent. In most cases, they’re not. They’re routed to an agent who paid for the lead and often knows nothing about the home. That’s a disservice to buyers because they are connected with somebody who typically knows no more about the home than they do. It’s also a disservice to sellers whose home is in the hands of someone who knows nothing about it, and has a financial motivation to pitch the buyer on homes they have listed.

 

 

Zillow’s product isn’t homes, it’s buyers. Homes are just the bait. Zillow profits by selling buyer leads to agents. To generate revenue, Zillow needs a steady pipeline of home listings to attract buyers who are redirected to pay-for-lead agents. That’s why it supports rules that force listings onto its platform quickly and uniformly, eliminating competition from new marketing portals or strategies that might better serve sellers.

The MLSs are no different. Their business model depends on mandatory participation by agents. NAR, which is affiliated with most of the nation’s MLSs, pulls in millions of dollars a year, mostly from agent dues. It uses rules and penalties to ensure agents submit homes to MLS when they begin public marketing, even if that means limiting their flexibility to market homes creatively in ways that better serve sellers.

In short, the commoditization side is fighting to control the real estate ecosystem to lock in their monopoly and shut out innovation that might threaten their grip.

 

 

We believe sellers should be free to choose when, where, and how their homes are marketed. Sometimes, this means launching with immediate and uncontrolled mass buyer exposure. But often, especially in a cooling market or at the luxury level, it makes sense to use controlled marketing, creating urgency, exclusivity, and a sense of VIP early access. That’s how luxury brands sell their products at premium prices. That’s also how many of the nation’s top agents drive higher prices for sellers.

We believe that real estate agents should be empowered, not handcuffed. Professionals in law, medicine, and finance are trusted to use discretion in advising clients. Why should real estate be different?

And we believe buyers deserve transparency, not
bait-and-switch games from lead-selling platforms.