The MLS, which powers Chicago’s real estate market, announced it will stop supplying properties that affect Zillow starting midnight Wednesday unless it changes its rules regarding private properties sold publicly.
The Chicago multi-listing services company acknowledged Monday that if Zillow continues to tighten its focus on pre-market listings, it will be out of business in the region by Wednesday morning.
MRED has publicly announced for the first time that it will reduce its real estate listing data feed to Zillow’s platforms, including Zillow and Trulia.
The threat was alluded to in a lawsuit Zillow filed last week against MRED and Compass International Holdings, in response to Zillow blocking listings from its private listing network.
rebecca jensen
“These MLS rules exist to protect all participating brokers and all consumers who rely on a complete and accurate picture of the market,” MRED CEO Rebecca Jensen said in a statement. “These rules apply equally to all participants, regardless of audience size or platform reach. MRED has consistently and fairly enforced its rules, and we hope to see Zillow return to operating consistent with its long-standing agreement with MRED.”
It’s hard to say exactly what percentage of the publicly traded company Zillow stands to lose if it doesn’t exit, but it’s probably at least a third, and probably much more. A Zillow representative declined to provide those numbers. Zillow wrote in its complaint last week that MRED controls about 98 percent of the area’s listed properties.
Zillow said in its complaint that Compass moved to suspend all brands’ listing feeds to Zillow earlier this month. Agents under the giant brokerage house are responsible for more than a third of the listed properties on the MRED market.
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The impending power outage means the battle between Zillow, MRED, and Compass will intensify dramatically.
“The choice to comply with MRED’s reasonable IDX and VOW rules and avoid feed interruptions is Zillow’s to make,” MRED wrote. “MRED hopes that Zillow will make the right choice for MRED’s brokers, agents, sellers, buyers, and all of the rest of the MLS market that relies on an orderly system of cooperation.”
In a filing early Monday, Zillow asked a judge in the federal case to stop MRED from addressing the threat.
The company said MRED and Compass were forced to make “impossible decisions” that harmed Zillow and consumers. In a new statement sent after MRED publicly threatened to cut its feed, Zillow said MRED was overstepping its bounds on behalf of Compass.
“If MRED does this, Chicago sellers will lose access to millions of buyers, Chicago buyers will not be able to see all available homes, and thousands of independent agents will lose potential buyers,” a Zillow spokesperson said in a statement. “All to protect a securities company’s hidden listing scheme in a market that MRED has never served.”
Wave of MLS expansion
MRED is one of a group of at least four major MLSs across the United States that have changed their rules to prohibit members from blocking listings based on brokerage.
Now with a nationwide reach, MRED’s rules effectively try to prevent Zillow from banning publically sold listings while in a private position in markets far beyond Chicago.
RealTrax in Nashville, MLS CLAW in Los Angeles and Bright MLS in the Mid-Atlantic have also made rule changes and nationwide expansions in recent weeks. Each of the four MLSs also secured listing feeds from Compass as part of their expansion.
Zillow alleged in its complaint that MRED threatened to reduce its MLS data feed because of the ban on listings located in Florida, Georgia, and California.
“MRED will not suspend Zillow’s data feeds if Zillow makes the website compliant,” MRED wrote.
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