A clash is brewing in the residential real estate industry. Compass, one of the country’s largest real estate brokerages, filed a federal lawsuit last Friday against a Seattle-based listing service, accusing it of monopolistic and anticompetitive behavior that, Compass argues, is damaging not just its business but also consumer choice at large.
The lawsuit is the latest skirmish in a growing industry war over something called pocket listings.
If you’ve ever wondered why some homes seem to pop up on the market out of nowhere, or why others disappear before you even get a chance to visit, pocket listings are part of the reason. These are homes quietly marketed to a select few buyers before they’re made available to the wider public, or sometimes never publicly listed at all.
The appeal for sellers is clear: privacy, control and a chance to test the waters without the pressure of a public debut. But critics say pocket listings chip away at transparency and fairness in the market. They argue when only a few insiders get to see certain homes, it limits competition and can drive down prices.
Compass vs. Northwest MLS
Compass’s lawsuit targets the Northwest Multiple Listing Service (MLS), a major database that real estate agents use to share property listings. Earlier this month, Northwest MLS temporarily blocked Compass from displaying its Seattle-area listings on its website. Though the decision was reversed within a day, the damage was done. Compass claims the rule—which still requires listings to be entered into the MLS immediately or not at all—hurts its business and restricts seller choice.
Should brokerages be allowed to keep listings private? And who gets to decide?
A Splintering Industry
Real estate heavyweights like Zillow, Redfin, Homes.com and CoStar have all taken clear stances on this issue—and they’re not all on the same side.
In March, the National Association of Realtors (N.A.R.) loosened, after years of pressure and lawsuits, its long-standing “Clear Cooperation” policy. That rule once required agents to publicly list a home within 24 hours of marketing it in any way. Now individual MLS databases can choose how long listings can remain private. And with that, the industry began to splinter.
Zillow and Redfin, despite being rivals, recently teamed up in principle: they announced any home marketed privately at first would be barred forever from being listed on their platforms. That’s a heavy blow for brokerages like Compass, which have invested heavily in exclusive marketing channels.
Compass’s CEO, Robert Reffkin, accused Zillow of “punishing” homeowners who want to test out private marketing before going public. “Zillow is abusing its market power and effectively telling homeowners, ‘We know what’s best for you, and if you disagree, we will ban you and your agent,’” Reffkin said. “Homeowners should have the right to choose how they market their homes.”
Compass has been promoting its Private Exclusives program since November, essentially a members-only listing network where homes are shown just to Compass agents and their buyers. It currently has about 7,000 properties.
Who’s Protecting What?
But not everyone sees Compass as the underdog. Executives at Zillow and Redfin argue pocket listings give unfair advantages to certain agents and create a shadow market that leaves regular buyers out in the cold.
“It’s a fairness issue,” said Errol Samuelson, Zillow’s chief industry development officer. “Brokerages are using the lure of these listings that are behind the velvet rope to benefit the brokerage, and when buyers don’t have equal access to listings, it creates fair housing issues and distorts the market.”
Glenn Kelman, Redfin’s CEO, went a step further, linking the rise of pocket listings to an attempt to preserve high commission fees at a time when pressure is mounting to reduce them. “Now you have agents saying to consumers that the reason you should pay me a high fee is I can show you listings that nobody else has,” Kelman said.
Others like Andy Florance of CoStar (which owns Homes.com) say Zillow’s real motive is less about fairness and more about controlling supply. He claims the company is effectively saying: “If you don’t use our marketplace, you can’t use it at all.” In his view, that’s a move to maintain dominance—not protect consumers.
A Power Vacuum and a Growing Rift
What’s making all this even messier is the fact that the traditional referee—the National Association of Realtors—is losing influence fast. Rocked by lawsuits, internal scandals and accusations of misconduct, N.A.R. is no longer the powerful arbiter it once was.
“Now you see different parties trying to lead the industry in the absence of an organization that’s supposed to help us all work together,” Kelman said. “When the cat’s away, the mice will play.”
And play they are. Compass, Redfin, Zillow and others are racing to rewrite the rulebook in a landscape where lines are constantly shifting. While one side champions transparency and fairness, the other fights for flexibility and seller choice. And in the middle are millions of homeowners and homebuyers trying to figure out the best way to move forward.
The courts will eventually weigh in on Compass’s lawsuit, but the bigger battle over pocket listings is far from settled. As regulators, industry giants and thousands of independent agents pull in different directions, the only thing that’s certain is that real estate as we know it is in the middle of a serious shake-up.
