Judge Makes Ruling on Zillow/Compass Injunction
By Francis Lopez
In late 2024, Compass gained publicity with their three-phase marketing plan for sellers. Under the plan, sellers are first encouraged to place their listings on Compass’ exclusive platform, before entering a “coming soon” phase, and ultimately going live on the market. In April 2025, Zillow and Redfin responded by announcing they would ban any listings from their websites that are not on the MLS within 24 hours of being publicly marketed. Ultimately, Compass filed an anti-trust lawsuit against Zillow in June of 2025.
Compass has made it clear that it’s three-phase plan is intended to “test the waters” for sellers. Unfortunately, the marketing plan prevents non-Compass buyers from seeing the property, limiting the buyer pool for sellers. For buyers, this can also be extremely frustrating as they may not realize a property is for sale until after it has been sold off market. Ultimately, this strategy eliminates opportunities on both sides of the transaction.
It may appear surprising that Compass is fighting so aggressively to support a policy that clearly works against their home sellers. Intuitively, it makes complete sense that homes that are off-market and therefore are not exposed to all buyers sell for less money. How much of a discount off-market homes sell for may vary across geographic regions. Zillow found that California off-market homes sold at a market discount of 3.7%.1 Zillow also found that off-market sales underperformed and sold for less money at all price points, including the luxury market. The Bright MLS analyzed more than one million transactions across five states and found that homes listed and marketed on the MLS sold for 17.5% more than comparable properties sold off-market, even after controlling for property and neighborhood characteristics.2 So Zillow’s fight for transparency is also a fight for home sellers to achieve the highest possible price and for buyers to have equal access to the American Dream of homeownership.
Compass’ lawsuit claims Zillow maintains an illegal monopoly on online home listings, and has an anticompetitive agreement with Redfin. After filing suit, they followed up with request for a preliminary injunction to halt the Zillow ban policy. On Friday, February 6th, a judge denied Compass’ request for an injunction. In doing so, the Judge issued a 50-page decision finding no clear showing of a monopoly, and that Zillow and Redfin likely acted independently. So, while the lawsuit continues on, the Zillow ban policy can remain.
And while the various companies posture against each other, it should not be lost that the goal in real estate is a successful transaction between a buyer and a seller. Along with widely marketing a property through social media, newspaper ads, commercials and various other marketing, aggregate websites like Zillow and Redfin are a tool for both property buyers and sellers to find the right match in a transaction. At DeLeon Realty, we don’t believe in hiding your listing, rather, we want to maximize exposure to the greatest extent possible in order to ensure higher sales prices for our sellers. Using all of the possible channels to present a listed property is how real estate should operate, not in favor of any particular agent, but in favor of the clients.
1 https://www.zillow.com/research/mls-pln-sale-price-34846/
2. https://irp.cdn-website.com/3d0f9886/files/uploaded/On-MLS-Study-2023-1.pdf
Francis Lopez (DRE #02119541) | francis@deleonrealty.com | 650.407.0160
DeLeon Realty, Inc. | DRE #01903224 | Equal Housing Opportunity
