A growing wave of proposed and recently passed legislation takes aim at real estate marketing strategies that include periods when properties are not widely shared through multiple listing services or public search portals like Zillow.
So far, at least one state has passed a law requiring real estate to be sold to the public within one day of listing or signing a rental agreement. Lawmakers in four other states have proposed similar bills, at least one of which is supported by Zillow, and several others by state real estate agent organizations.
The growing trend follows more than a year of tense discussions and bickering between some of the real estate industry’s biggest players in a battle to determine how real estate is sold in the United States.
Part of the bill has been proposed by real estate agent associations. But behind it all is an ongoing battle between Zillow, the number one search portal, and Compass, the number one broker.
“Zillow was founded on the principle of consumer transparency, so we support legislators’ efforts to give everyone access to housing information and fair competition for the right home for their family and budget,” Zillow said in a statement. “We also support efforts to ensure sellers understand what they stand to gain if they agree to market their home to a limited group of people. Research shows that, on average, sellers lose money when they list on a private network.”
What is not clear is whether the bill applies to listings within Compass’ three-tier marketing strategy. This strategy also includes periods where listings are not widely disseminated through multiple listing services. Last week, Compass announced it had partnered with Rocket-Redfin to display listings in at least one stage of a three-stage marketing strategy.
“These bills are a covert attempt by Zillow to maintain its market dominance by restricting homeowner choice and limiting competition, to the detriment of both sellers and agents,” a Compass spokesperson said in a statement.
Below is an updated list of state-level bills proposed and passed for the purpose of private marketing of real estate properties. This post will be updated as more state legislators introduce new bills.
Wisconsin led the way and became Act 69 in December. The law requires brokers to respond to requests for information and property presentations. Also,
The bill would allow sellers to opt out of widespread public marketing by signing an opt-out form. This form requires sellers to state their reasons for opting out. You should also be aware that fewer potential buyers may see your listing, and reduced exposure may lead to a lower selling price.
“Within one business day after the commencement date of an agency agreement authorizing a public company to sell or rent the owner’s real estate and to advertise or market the owner’s real estate on one or more Internet platforms or websites accessible to the general public and real estate licensees representing prospective buyers or tenants, unless the owner completes and signs a disclosure and opt-out form prescribed by the Authority.”
The Wisconsin Association of Realtors supported the bill before it passed in November.
State records show Zillow lobbied in support of the bill that created Act 69, AB456, and a similar bill introduced in the Senate.
This bill takes effect on January 1, 2027, so other bills may come into effect sooner.
Although the word “nondisclosure” does not appear in the bill, it appears to be similar in that it requires widespread disclosure.
“A broker shall not sell or rent residential real property to a limited or exclusive number of prospective buyers or brokers, or any combination thereof, unless the property is sold simultaneously to the general public and to all other brokers, unless reasonably necessary to protect the health or safety of the owner or occupier.”
The bill passed the Senate unanimously last month and awaits a vote in the House.
Industry veteran Russ Cofano said the bill lacks important definitions.
“The Washington State Legislature ends on March 12th, but I believe the Washington bill will pass before then,” Cofano wrote on LinkedIn. “The interesting question, at least for Washington state, is that while this bill mandates public marketing, it does not define it. [sic] That actually means. ”
Connecticut: SB 340
Connecticut’s Senate bill would create new forms sellers and landlords would have to sign to avoid publicly selling properties through the MLS or real estate portals.
The bill would create a form that would require sellers to sign and notify them that opting out of public marketing through an “internet platform” or MLS could not reach many prospective buyers, limit the number of offers, lower sales prices, and may not be in the seller’s best interest.
“Marketing real estate through private or limited access channels requires simultaneous public advertising to promote transparency and ensure open and nondiscriminatory access to real estate information for all prospective purchasers or tenants.”
Connecticut Realtors and Zillow both spoke in favor of the bill.
Zillow lobbyist Tory Fishman wrote a statement in support of the bill on March 2nd.
“Unfortunately, there is an increasing trend in some parts of the real estate industry to systematically hide available inventory and provide access only to a select group of buyers and agents within private listing networks,” Fishman wrote. “This bill would provide broad and fair visibility into residential properties, which is good for consumers, good for fair housing, and good for the state of Connecticut.”
Hawaii’s bill has the support of the Hawaii Association of Realtors and the state Real Estate Commission.
The bill would amend Hawaii’s laws regulating real estate agents and real estate agents to require extensive public marketing.
“Unless reasonably necessary to protect the health or safety of the owner or occupier, a real estate broker shall not list or offer for sale or lease any residential property to a limited or exclusive group of prospective purchasers, real estate agents, real estate salespeople, or any combination thereof, unless the property is offered simultaneously to the general public and to all other real estate brokers and real estate salespeople.”
Violation of this proposal would be considered unfair or deceptive conduct under state law.
Hawaii Real Estate Commission Chairman Derrick Yamane said the commission supports the bill. The Hawaii Association of Realtors also spoke in favor of the bill.
The bill passed its first committee vote unanimously last month. A broader committee discussion is scheduled for March 3.
The bill would require seller agents to share information about the property with buyer agents, respond to inquiries from buyer agents, and make them available to show prospective buyers about the property.
It also includes elements that appear to codify the original intent of explicit cooperation into state law.
“Publicly advertise or sell real estate listed for sale on an Internet platform or website accessible to the public and to prospective purchasers of a real estate licensee, unless the seller completes and signs a disclosure and opt-out form prescribed by the department within one calendar day of the commencement date of the brokerage agreement permitting the licensee to sell the client’s real estate.”
Sellers who opt out of public marketing must sign a form acknowledging that their property may not be seen by many buyers.
“Reduced exposure to listed real estate may result in a reduction in the number of offers to purchase listed real estate, which may adversely affect a seller’s ability to sell listed real estate on favorable terms,” the form also states.
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