This is the second of a two-part series. In Part 1, we examined how the Zillow Preview and Compass-Redfin deals signaled the end of consumer-firstism in real estate. This article looks at what’s next for all players in the industry.
Let’s start with someone no one is actually talking about. This is someone sitting at their kitchen table trying to figure out if they can afford to move.
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That’s the person who will spend more money on this trade than on any other trade in their lifetime, and in an ideal world, the person who should trust that the system they’re navigating is working in their best interest.
The person is about to receive a very unpleasant education.
Compass with Redfin. Zillow and Keller Williams, REMAX, HomeServices of America, and more. All announcements are summed up in the same words: Seller Choice, Broader Exposure, and Better Results for Everyone. Press releases are perfect.
The reality is more troubling.
What is actually happening is that the largest players in the industry are segmenting the market step by step.
Tier 1: Agent is connected to the appropriate portal transaction. As a seller, your listing gains early momentum and attracts interest from a select few buyers before it hits the open market. Buyers who are connected to the appropriate network will see it first.
Tier 2: Agent not connected. As a seller, your listing enters the market against properties that already have a head start. As a buyer, you’re piecing together inventory across multiple portals and networks and praying you don’t miss a window of listings that just became active after already having two weeks of momentum elsewhere.
At the moment, consumers don’t know which tier they are in. However, that information gap is closing. AI puts what these private networks actually mean straight into the hands of buyers and sellers, explaining them in plain language. No industry personnel required.
Here’s what this means for everyone in the industry.
What comes next?
consumer
Homebuyers are the ones who stand to lose the most and complain the least about it because they don’t know what they aren’t seeing. Upcoming products are technically visible if you know where to look, but most buyers don’t know how to check eight different portals. The industry is counting on it. But that assumption has an expiration date.
AI tools already provide buyers with access to market data, price analysis, and neighborhood information that previously required interpretation by experienced agents. Soon, these same tools will be aggregated across all networks and you will see all upcoming tools regardless of which portal deal was created. At that point, a private network is not a competitive advantage. It’s a dishonest speeding violation.
Sellers also face downsides. They say the pre-market window creates momentum and protects prices. What they are not told is that limited exposure is not the same as broad market demand.
The seller, who was supposed to have 40 buyers competing, instead got 8 in a highly selective ecosystem and is calling it a win since no one presented an alternative. Once AI starts showing exactly what sellers put on the table, those conversations will quickly become unpleasant.
There are also aspects of fair housing that are actually underreported and not discussed seriously enough. When access to inventory is determined by which intermediary networks one is connected to, those who are most likely to be left behind are those who have always been left behind. Eventually, someone in Washington, D.C., will notice.
Another thing that no one says is that these programs lose their luster the moment the market turns. The pre-market window stops being a strategy and starts to become a liability. The entire architecture of pre-market advantage is built on the assumption of a seller’s market. That assumption won’t hold forever.
broker
Larger brokers will continue to close deals like this, and they should do so on the broker’s terms, not the portal’s terms.
However, no one wants to say that brokerage is a bad business.
Profits are thin, overheads are high, and most of the commission goes with the agent. The industry bet decades ago that competing on price and compensating on volume would work. That was never the case.
But something is changing. Brokerages are beginning to realize that they can influence agent trading volumes through portal partnerships, pre-market access, and the benefit of data that passes only through the brokerage. This leverage comes at a price. To the agent.
And then there’s the AI that accelerates the whole thing. Currently, brokers do most of the work, assume all the risk, and pass 85 percent of the commission to agents. AI will do many of the things that agents currently do. Once you do that at scale, keeping 85% of that in-house is no longer a pipe dream.
The broker who understands that first will end up owning a business that actually makes a profit. Those who don’t will continue to squeeze in until a bigger fish makes an offer they can’t refuse.
Consolidation was already happening. This increases speed.
agent
Top producers of major franchises benefit from all of this. You benefit from early access, improved lead flow, and connection to the right networks. For them, the pre-market period is a feature, not a bug.
For others, it’s even more complicated.
There are 2.5 million licensed agents in this country, but most of them don’t do enough business to do a truly great job. AI is accelerating a cull that was already supposed to occur.
What remains is a smaller, more specialized group of agents who actually know what they’re doing. But the consumers they serve are more informed, more demanding, and much harder to bullshit. A brokerage built for that reality will attract those agents. The rest are not.
portal
Portals’ influence over how real estate is transacted is vastly disproportionate to their position in transactions. Portals own the top of the funnel, but that’s not where the money is.
The money is in mortgages, title, closings, and repeat relationships. Zillow, Rocket/Redfin, and Realtor.com are all competing for the same thing: owning the entire transaction, not just the search. At this time, pre-market deals provide traffic and relevance. It does not address the fundamental questions that the portal must ultimately answer.
why do you exist?
There are only three answers.
Become a super app that owns the complete transaction and stays in consumers’ lives for decades. Dig deep into niches like geography, price point, and buyer type and own it completely. Become a data pipe, a utility that enhances other people’s experiences and stops pretending to own the consumer relationship.
What is unrealistic is to maintain the current situation and hope the market doesn’t notice.
mortgage
Rocket showed everyone that mortgages are the dormant asset in all of this. The lender you have a pre-market relationship with will lead the financing conversation.
But what makes Mortgage even more powerful than the portal’s role is its service.
The lender that closes your mortgage has a reason to stay in your life for the next 30 years. Mortgage companies with a portfolio of services know exactly when their customers will be ready to move again, often before they do so. It’s not a lead. It’s an economic relationship. Question for independent mortgage lenders: Can I participate in pre-market conversations before the doors close?
MLS
Local and regional MLSs have taken decades to build what brokers actually need. they didn’t. And the market has moved on without them.
The central issue is not technology, innovation, or governance. It’s the scale. The pre-market deals currently being entered into require the kind of infrastructure, relationships and sophistication of data that a regional MLS serving three counties cannot provide. Brokers got it. The listing is moving upstream and no one has asked MLS for permission.
Honest prognosis: Most local and regional MLSs will end. They just become irrelevant secondary distribution conduits for listing data that has already been monetized elsewhere. Some large companies may find a way to pool their resources and give brokers something worth paying for. However, intermediaries that have lost trust will not return. More importantly, differentiation strategies are needed to create new economic value for intermediaries.
There’s one play that could change this. It’s never long term. In fact, it’s the most logical move on the board. But the National Association of Realtors needs to do something the organized real estate industry hasn’t traditionally excelled at. More details later.
NAR and Association
Local and state relevance exists in direct proportion to MLS health status. As MLS becomes less relevant, so too does MLS. Less influence, less membership value, less budget, less reason to exist.
One of the last remaining pillars of NAR relevance was MLS access and the membership flowing from it. That pillar is just cracked. Fewer participants in an MLS means fewer members, which means less revenue. The calculations are simple, but the implications are profound.
However, NAR actually has some fun.
The company owns a national property data platform called RPR, which has been underutilized while the industry has fragmented around it. Leveraging RPR to build a national MLS is no pipe dream. The infrastructure and data are there. What doesn’t exist yet is the institutional will to acknowledge that the current model is finished and that we need to build something completely different to survive.
With every portal agreement signed and every broker that routes listings upstream, that decision becomes increasingly difficult as more agents consider the MLS as a starting point. NAR has assets, relationships and, in theory, a mission to bring them together. They never had any sense of urgency.
Now that’s the case. The question is whether users will use it before the window closes.
Does NAR have the ability to make something like this happen? History tells us no.
The same people don’t build different industries.
Let’s be honest one more time. The leadership that got MLS and NAR to this moment is not the leadership that will get them out of there. The people who have been attending the same conferences, sitting on the same committees, and advocating for incremental coordination progress for 20 years do not have the ability to compete with Zillow, Rocket, and Compass International Holdings.
We don’t need a new strategic plan. It’s the new talent, the leaders, who are willing to actually build things at scale, understand data as a competitive weapon, and make enemies in the process.
If NAR and the MLS community want to run an RPR play, the first decision is not a technology decision or a governance decision. It’s people’s decision. Get the right leaders in the room, give them real authority, and get them out of the way.
Consumers deserve something better than what is currently being built in their name. The industry has the ability to make that happen. What is missing is not talent, skill, or will.
That’s the urgency. And time is running out.
