The lines are never as clear as we think they are. Humans who buy things are knots of complexity and paradox. Young people desire cigarettes precisely because they seem adult; millions of us tune out the disclosure of side effects when captivated by the promise of a pill; we know that past performance does not guarantee future results, but our act of buying in belies the knowing.

The space between caveat emptor and malintent is something to be argued about — in the court of public opinion, or in a court of law, among legislators, or among regulators. 

You will be unsurprised to find that this brings me to the question of how real estate agents are currently presenting the idea of listing privately to home sellers. 

This isn’t a hard question to answer. You just have to ask.

We asked 1,000 homeowners who had sold a home with an agent in the previous six months whether that agent mentioned listing privately and, if they did, how they presented it. We screened out real estate agents, investors, loan officers, and anyone involved in the residential real estate industry.

Their answers shocked me. You probably know that I believe Compass’ pursuit of private listings at scale as a central part of its business strategy is both wrong and dumb, so call me fragile. But even if you are totally jazzed about putting thousands of homes inside a black box, you should probably be a tad concerned about what these recent sellers told us.

First, this:

Then we asked the 60% that responded “Yes” a follow-up:

All right then. Compass, the largest real estate brokerage ever to exist, has led a movement that seems to be hitting living rooms, big time. Their downward and outward pressure to pitch private listings is being felt by American homeowners. 

While many earnest champions of “full disclosure” and “seller choice” can proclaim confidently from outside those living rooms, we now have a peek at what’s actually going on inside them.

Ask yourself: Does this feel good? Does it feel smart? Does it feel like maybe we’re playing with fire?

We don’t have a survey from before Compass started its private exclusives crusade, but let’s assume we’re all reasonably intelligent people here, OK? And please don’t come at me with the “private listings were always a thing” argument, or the “It’s not just Compass” jab. Comparing this epic flex of scale and power to the effects of yesterday’s here-and-there private listings, or smaller companies’ efforts to mimic the Compass strategy, is either an error of reasoning, a paycheck-conditioned contortion, or a fatuous game of rhetorical self-pleasure.    

But whatever, that’s just my opinion. And it’s not my opinion, or that of anyone else inside our industry bubble, that you should worry about. It is the opinion of those outside our industry, the ones with real power, that look at the blurry line we’re dancing upon and see an argument they can win. Maybe that’s a plaintiff’s attorney, a crusading journalist, a 2028 presidential candidate, a Justice Department with different inclinations … we don’t know.

The risk, however, seems clear.

Enjoy your weekend. 

The post Friday Flash: Dancing on the line appeared first on 1000WATT.

You vetted several agents. You chose the one who showed you they were prepared to help you achieve your goal. You trust this person.

Because you’re going down rabbit holes a lot these days, you come upon a fight going on inside the real estate industry about home listings.

One side in this fight says Zillow, which you’ve been glued to for months, is a bully that unfairly uses homes listed by real estate agents to make money from real estate agents.

You don’t care about this. It’s not your problem. You just want to buy a house.

The other side in this fight compares marketing homes to marketing designer handbags, Ferraris, or other luxury goods. This side says it’s OK if you have to look in a bunch of different places to find homes because you seem to be good with subscribing to several different streaming services in order to entertain yourself.  

This side also talks a lot about “seller choice.” But from where you sit, it looks like sellers are doing just fine.

The company leading this side of the fight, Compass, is big in your market. You visit their website and see that they’re teasing a bunch of “Private Exclusive” homes that you can “unlock.” You click the button that says “See Private Exclusives,” only to be taken to a page that directs you to connect with one of their agents. But you have an agent. You see now that it says, “Listings are only private online. All buyers & agents can access in our offices or by contacting Compass.”

Because neither you, your partner, nor your agent is stupid, you get the message.

This, you feel, is your problem. There are homes beyond your reach. Not handbags. Not Ferraris. Homes — one of those places where maybe someday you can sit at the kitchen table in your underwear, eating a bowl of cereal with your kid, and feel for just a little while like you’re in control of your life, where you can be you.

This makes you mad.

In a world aflame with conflict, where so much seems to slip beyond your grasp, someone is now messing with homes. Ugh.

You think: F these people.

…

This could be a moral argument, but I understand that moral arguments are just for softies like me. So let’s be practical and think about it this way: If you’re Compass, what does “winning” really look like? 

It may look like sustained profitability. It may also look like a lot of bad will from buyers who find it disgusting that the words “private” and “exclusive” are anywhere near something like homes for sale (practical tip to the otherwise brilliant folks at Compass corporate: At least rebrand the damn thing). This blowback is the calculated risk. The risk gets bigger as Compass gets bigger.

This industry eats bad PR for breakfast. Maybe it’s nothing. But maybe, through a confluence of forces well beyond the bounds of our increasingly tone-deaf industry debate, this blows back on Compass, and also, I fear, others drawn down this path at a lesser scale with less intensity.

To be clear:

Brokers should have greater control of their data.

Intra-brokerage double ending is not intrinsically bad. (Our research shows consumers understand what this is and have no problem with it either.)

We are working with brokerage companies right now to recapture profits and brand power. Honestly, there are ways to do this without the risk of provoking consumer backlash.

It’s healthy that Zillow, dominant for a decade, is feeling heat.

It’s also healthy that the MLS system, insulated from competition for too long, is being dragged into the ring.

But there is a line beyond which the pursuit of a goal takes you into counter-productive territory. It is easier to see that line when you imagine yourself in the shoes of the people who aren’t actively engaged in this fight, but may soon be moved to respond to it. 

The post Friday Flash: In their shoes appeared first on 1000WATT.

You have a brand and positioning problem. 

A short detour through Cadillac

For generations, Cadillac did not sell cars. It sold size, heritage, and status. When people reached a certain status in life, they walked into the showroom and bought one. 

That is a brand at work.  

Cadillac became a synonym for best in class. “Bought a new Zenith console radio. It is the Cadillac of console radios.”

By the mid-‘80s, the luxury buyer had changed. German and Japanese imports rolled in. Gas prices climbed. Consumption trended out. Advanced car tech trended in. Luxury came to mean restrained European sleekness, not a boat on wheels.

Cadillac kept selling from a dated script. 

A decade later, people had stopped paying attention. Buyers no longer saw themselves in the brand. By the early 90s, the showrooms looked like museums. Sales fell. No amount of ad spending could stop it.

The brand had one choice left. It had to change the entire perception of what a Cadillac was.

What was required was more than a big idea. The brand needed to disrupt the old perception entirely and reframe itself in a way no one would have expected.

Whoever came up with the Escalade was not a risk-taking genius. They had read the marketplace and made a calculated move. The model did not fit the lineage. That was the point. It still carried Cadillac’s DNA. Size and quality. It was modern. It was relevant. It epitomized what people wanted in a car the way Cadillac had in its prime.

The Escalade was more than a new model added to the line. It was the new story of the repositioned brand. It saved Cadillac. 

If your recruiting system isn’t working, your brokerage needs its Escalade and it needs to reposition the brand around it. .

Perception is the product

If agents believe your brokerage is old and stodgy, and that is not who you are, you do not have a recruiting problem. You have a brand and positioning problem.

If agents believe your brokerage is not innovative, and a glance under the hood proves otherwise, you do not have a recruiting problem. You have a brand and positioning problem.

If agents believe your brokerage has no vision for the future, and you absolutely do, you do not have a recruiting problem. You have a brand and positioning problem.

If agents believe your brokerage cannot compete at the high end, and you list properties in the multi-millions, you do not have a recruiting problem. You have a brand and positioning problem.

A campaign alone cannot fix this. Deep down, you know it is true. Campaigns can sell what you have. They cannot close the gap between perception and reality. A campaign to convince agents you are not what they believe you are is the most expensive argument you will ever make.

It is a bad investment.

A position the market cannot see is not a position

Take a position.

If you are pro-consumer, that has to be the loudest thing about you. If you are pro-agent, that has to be the cornerstone of your brand. If you are built to take a new agent from zero to a million, that journey has to be the story your brand puts on display, not a home search.

If your stand is not strong enough, you need to create your Escalade.

If your position is something the marketplace doesn’t recognize, then it’s a private opinion, not a “best kept secret.” You need to make it public. Assemble the story, produce it, put it on display.

Do this, and the right agents will take notice. They will call you. This will reduce the time you spend trying to take their agents, and they will find it much harder to grab yours. With a stronger position and a clearer brand, you will stop matching offers and giving away the ship to agents who will leave the moment a competitor waves a bigger number.

Repositioning will buy you leverage. It will create something the other side wants.

This is the only recruiting strategy I know that will work.

The post The only recruiting strategy that will ever work appeared first on 1000WATT.

From Zillow’s POV, Compass is now laundering banned listings through friendly MLSs willing to pinch Zillow in the feeds.

From Compass’ POV, Zillow is trying to squash hidden listings by… making sure they remain hidden.

Seller’s rights, buyer access, fair housing, grandma getting ripped off, and bright-eyed young buyers getting leveraged. 

A hall of rhetorical mirrors. I’m nauseous.

A lot of people keep asking, “What about The Consumer?” The question is swallowed in a smoke of half-serious answers advanced by people paid to make them. It seems pretty straightforward to me. Leveraging or monetizing listings has led us astray and will likely damn the industry in the end. We need to find our way back to selling homes.  

But the important question no one is asking, let alone answering, is “What about The Agent?” Really, while two multibillion-dollar companies duke it out in an increasingly stupid fight, the average agent just wants to sell a home or two this month so they can pay their own damn mortgage.

Contrary to what news coverage and social postings may lead you to believe, the vast majority of working agents couldn’t give a rip whether Zillow or Compass prevails. For every 100 Zillow haters spinning out in a Facebook group, there are 100,000 agents who go through their day thinking nothing at all about Zillow. For every 100 Compass agents cheerleading Robert Reffkin’s every Instagram and LinkedIn post, there are 1,000 Compass agents who don’t use private exclusives, don’t care about this fight, and just want their livelihoods not to get messed with.

The sad thing is that this silent majority of agents does stand to get hurt if the fight keeps escalating.

The MLS is the one constant in a working agent’s life, the thing that’s always there, complete and clear. While many brokers have legitimate gripes with our unnaturally siloed system, which costs them unnecessarily, almost every agent I know has no beef with their MLS. It’s the air they breathe.

So, yeah, let’s consolidate. It’s time. Let’s replace IDX. It’s time. Let’s professionalize MLS BODs. It’s time.

But let’s not mess with agents. Let’s not use their MLS as an instrument of corporate power plays. Let’s not jerk them around by suggesting they join an MLS half a continent away. Let’s not confuse them with new policies that shift for reasons to which they are indifferent.

So many in this industry like to pay homage to “The Agent” and “The Consumer.”

Let’s start acting like we mean it. 

Peace.

The post Friday Flash: What about the agent? appeared first on 1000WATT.

Take these for what they are. Musings pulled from white noise. 

…

“Pre-market” and “off-market” exist only because “on-market” exists.

Compromise the latter too much, and the former becomes a trap you have to pay your way out of. Consider Australia.  

The trick is to push the existing system right up to the breaking point, no further. 

…

If I had large amounts of money and power, I would not start a national MLS outward from an existing player, or inward from several existing players. I’d use cash and compromise to present brokers with good reason to do something entirely new.

MRED is a fine MLS managed by capable people. But it runs primarily on a software called Dynaconnections, which is, I dunno… maybe not the sleekest interface for new users to grapple with, and (guessing here) probably not exactly “AI ready”.

And of course, politics. Getting other agents and brokers to jump into a Chicago thing, or other MLS execs to consider partnering with an MRED thing, will be tough.

Realtracs is somewhat more interesting, inasmuch as they’ve always built their own software, and have re-jiggered their corporate structure to be, shall we say, less MLS-y.

There will be more MLSs “going national” soon. 

Will they all get drawn up, like a net filled with fish, into a mother ship? Who’s pulling the strings? 

…

We need a new industry Grand Compromise. One in which both Compass and Zillow (neither of which are 1000WATT clients, by the way) give something to get a workable go-forward path. 

Zillow must concede that Compass has accumulated enough mass to dictate certain changes. Compass must concede that Zillow is now zapping enough of its private exclusives to create a chilling effect among its agents, and holds the ultimate lever – an undeniable consumer audience – that it has demonstrated a willingness to use in this fight (see Zillow Preview). 

…

RE/MAX / Real makes sense to me, and maybe needed to happen, but feels daring nonetheless. 

RE/MAX gets a good tech story. Real gets differentiation from EXP, and the newcomer snapping at its heels, LPT. It also gets the mass needed to survive if the MLS gets completely unwound. 

If the Real tech is successfully woven into the RE/MAX franchise offering, it could offer sustained profitability as well. Of course, there are those who think real estate franchising is a dying model at all but the high end. But why couldn’t you offer (license?) the RE/MAX brand to teams “brokered by” Real that value instant recognizability? Or push some of the Real’s recruiting model into RE/MAX shops looking for a new hook? 

There are lots of interesting possibilities here. But these are very different companies with very different cultures and agent profiles. I know smart people at both of them, and I’m rooting that they make it go. 

… 

So the brokerage/franchise deal-making tracks. But I also feel like there’s nervous prey vibes around all of it. Zebras getting close on the savannah to up their odds against an unseen predator lurking in the bush.

Maybe it’s a phantom. Maybe, if we someday get out of this market trough, and “boomsday”, as LPT CEO Robert Palmer calls it, finally comes, we’ll have fewer but more profitable companies and fewer but more productive agents.

I hope. 

…
The MLS has been a great marketing leveller.

To simplify:

You get a listing, create good media assets, and put it in the MLS. You may have to check a few boxes (a little social posting, a “just listed” card to the neighbors), but you’re effectively done. The listing is everywhere, immediately.

In the listing world toward which we seem headed, marketing becomes more important. A differentiator. No more set-it-and-forget-it.

…

Our Signal event is coming up in a month. I am especially excited about this one because of the change happening right now. The turmoil and fighting is going to upset some things, but I sincerely believe that this is a time filled with opportunity. We’re going to do our best to point people towards it.

We are close to selling out. If you want to join me, grab a ticket.

The post Friday Flash: Nervous excitement appeared first on 1000WATT.

There are two hardened positions on what should happen here:

1. The listing agent should receive this inquiry/lead (“your listing, your lead”).
   
2. A buyer agent at a cooperating brokerage should receive this inquiry/lead (let’s call this the IDX model).

We need a third way. Because both of these options are lacking. 

I think you know why by now. But let’s look at this through a different lens. 

Imagine you had to disclose everything about what may happen behind this form on this form with unclouded honesty, in plain language. If you had to fully communicate, in a way visible to both the seller and potential buyers, what may actually be involved. 

The disclosures might look like this:

Option 1, your listing, your lead

By clicking “send” you agree that your message stands an approximately 50% chance of being ignored. In the event that you do get a response, you agree that said response may originate from an agent who is not in fact the agent you believe you are contacting, but a junior member of said agent’s “team,” or another agent who may or may not have any knowledge of this property. You also agree that the agent you believe you are contacting may also collect a “referral fee” which, should you eventually enter into contract to purchase this home, will either be paid by the seller or by you, depending on how, you know, you look at it. This referral fee will be collected by the agent you think you are contacting whether that agent responds to your contemplated inquiry, or chooses not to, a determination which will be made at their sole discretion. 

Option 2, IDX

By clicking “send” you acknowledge that this click is a very, very big deal. In fact, should you enter into a contract to purchase this property, this could be the biggest click of your life inasmuch as the website or app upon which you are contemplating making such click may receive a “referral fee” of up to 40% from the agent who may or may not be the agent you believe you are contacting, and that said referral fee will be paid by either the seller of this home or you, depending, you know, on how it goes. You also agree that we may contact you immediately via phone, SMS, and/or email, for a period as long as, but not limited to, forever, the duration and frequency of such communication being determined at our sole discretion. 

I realize that I’ve framed this in a certain way you may take issue with, and my tone is satirical. But would you feel comfortable making anything like these disclosures? If not, why not?

Time for a new way

I don’t suffer from portal-noia, think referral fees are inherently bad, or begrudge a listing agent and their brokerage control of listings that enter into existence as a result of their work, and under their legal umbrella.

My point is that the fraught, binary fight in which we have landed is jacked up.

We need a new way. Because, if you haven’t noticed, it’s kind of a shitshow out there. IDX is no longer an expression of broker consensus. Zillow is getting sued for undisclosed referral fees. (They are the biggest target, so they get hit first; others will follow.) Listings distribution is becoming a tangled mess. And AI (more on that below). 

That consumer hitting “send” on the form, meanwhile, is often poorly served. This is no time to be serving people poorly, either out of principle or as a matter of self-interested pragmatism. 

So what’s my new way? 

Well, part of this is resetting how we think about listings (which are, after all, peoples’ homes) in the first place. We find ourselves at a place where control and monetization of listings is clouding the whole point: Selling the house.

So, in my mind, we need to start from a place rooted in this belief:

Selling the house > Monetizing or leveraging the listing.

I also believe that we need to re-establish a general agreement around, and recognition of, listing agents’ and brokers’ primacy. While “your listing, your lead” isn’t a good enough answer from a consumer experience point of view, the listing broker and agent need to get their due.

It behooves us to create a new framework that all industry participants would be 100% comfortable explaining, in plain language, with maximum candor, to a room full of buyers and sellers. As we keep finding out, we either get ahead of things as an industry, or things happen to us on others’ terms.

Lastly, ask yourself this: Does the fact that listings display and choosing an agent are often fused in this way make any sense at all? Right now, the choices are a.) contact an agent legally obligated to serve the seller, or, b.) contact a mystery agent who may or may not have the knowledge or experience you need, but will nonetheless be asking you to sign a representation agreement just to open the door. 

I dunno. This feels like a bad place for our industry to be in these days. 

The opportunity

Last December, we conducted a large-scale research study on how buyers and sellers used AI (LLMs, specifically) during their transaction process. 

27% used AI to search for, evaluate, and compare agents. Our sample was people transacting during 2025, so that number is certainly much higher as I type. Consumers are digging deep into their AI of choice to find the agent who can meet their specific needs. They are sifting their choices with care. Agents attuned to this reality are meeting these consumers where they are, serving up AI-optimized content that describes, with specificity, their unique qualifications.

Consumers are showing us the new way. Right now. We should follow.

Now imagine it is April 2027. AI has continued to advance dramatically, and consumer behavior has continued to change dramatically. You’re on a portal or brokerage website looking at homes. You’re not serious at this point, but you find one you absolutely love, and don’t yet have an agent. You feel compelled to act.

Maybe instead of a “contact agent” form next to this home’s display, you see something like this:

Agents at [listing brokerage] best qualified to help you buy this home:

This short list of agents is determined by an AI model, not who paid to be there or who’s listing the property on behalf of the seller. The model accounts for transaction histories of every agent at the brokerage, as well as the qualifications and marketing of those agents. If the listing broker wants to take a referral fee for routing these leads, cool, just disclose it, which feels completely comfortable now that you’re actually adding value to the consumer here. 

This is going to happen – is happening – whether you or I like it or not. It will eat away the existing model whether you or I like it or not. It will happen no matter what we as an industry decide to do or not do with IDX. 

We once again have a chance to lead or be led. Being led frequently involves lawyers, regulators, and pain much greater than that inflicted by leading.

OK now

I value brevity and I have not been brief. I apologize. I’m going to wrap this up.

There are a hundred problems with, and objections to, everything I have written above. Of course there are. Bring them on. We need a new industry compact if we are to meet this moment. A new grand compromise about how homes are displayed, how we present agents to people in that context. 

Because while we continue to fight about this on the same old terms, buyers and sellers are moving forward.

The post Friday Flash: Time for a new way appeared first on 1000WATT.

This is not isolated. The stories are multiplying, and in many cases, AI is winning the trust game. 

It would be easy to indict AI as the deal killer. But easy isn’t always correct. AI isn’t creating a new problem. It found a wound the industry inflicted on itself decades ago and poured fuel on it.

The Trust Deficit

A few weeks of coursework. An exam. A dues payment. That’s the barrier to becoming a REALTOR. When a door is that easy to walk through, everyone will. Some will be exceptional. Most won’t.

The gap between the two becomes the industry’s reputation.

Multiply that across millions of agents, and you have more than a perception problem. You have a structural trust deficit.

Real estate could fix this with a simple filter. Every broker website has a “find an agent” page. Add filters for tenure. Experience. Specialization. Markets served. Reviews.

The technology exists. The data exists. The will doesn’t.

So agents are left to sort it out themselves. Branding. Personality. Performative marketing. All of it succeeds in creating awareness and likability. But awareness isn’t trust. Likability isn’t expertise.

Now add AI into the mix. Consumers see it everywhere: on listing descriptions, newsletter copy, social posts that could have been written by anyone, for anyone. The reliance on AI isn’t subtle.  So when consumers notice agents using it to do a job that already looks easy to them, they draw the obvious conclusion.

If they’re using it, so can I.

That’s why AI is winning the trust game. And getting ahead of it is the only strategy that matters.

Command and Control

We are all using AI to help make decisions. It’s fine when choosing which appliance to buy. But it’s dangerous when clients use it and trust it over their real estate agent during a transaction.

AI is now your other competitor, so the only option is to get in front of it. Now. What I will provide below is a strategy of using it just like your clients are. Run the scenarios they were doing. Then push it beyond what they can because you know more than both of them combined. 

Here are five (of many) moments you can do that. 

Before the Transaction Starts: The fear: Wasting money hiring an agent.

AI is enabling everyone to be more DIY. Your clients are likely applying the same instinct to your commission that you’re applying to your own vendors.

Focus on your content. It’s now a critical pre-transaction tool. Every post you put into the world has to be designed to pre-answer the question AI is fielding. 

The time for fun, games, and gimmicks is over.

In your first meeting, raise AI directly. Ask if they use it. Support it. Let them know you use it and how. Explain where it’s strong and where it will fail them. 

Don’t sell. Don’t defend your commission. Frame it as the best success strategy. 

Pricing the Home: The fear: Am I leaving money on the table?

AI lives to satisfy. Your job is to strategize. Present machine valuations at your first consultation. 

Explain what the Zestimate and AI ranges show. Explain how they arrive at their numbers and what they miss. Machines can’t read market sentiment. You can. Present your CMA. It’s real-time. It’s your strategic approach to pricing and generating inquiries. 

If the home is worth more, the marketplace will prove it.

Evaluating Offers: The fear: Is this the right offer? 

Sellers will run every offer through AI and ask if they can get more. Buyers will run every list price through AI and ask how low they can go. AI will tell both sides exactly what they want to hear.

So run both scenarios as your client will. Push AI til it breaks. 

Present the offers to your client along with AI’s response. Illustrate where it’s right and where its thinking is faulty because it’s not considering the consequences. Follow with your fully examined assessment of the offer along with your go-forward strategy. 

Negotiation: The fear: Not getting the best deal. 

The client asks AI to help craft a counter and gets an answer that’s objective and logical. LOL! You know negotiations are neither. They’re emotional. Full of pressure and leverage. 

Negotiation is poker. It can only be read, not modeled.   

Run the AI scenarios in front of your client. Show them exactly where it breaks down because AI has never had to hold a deal together at 11 pm when one party is ready to walk and their agent is a lightweight. 

Timing the Market: The fear: What if I’m wrong?

This is the client’s late-night spiral. What if I buy now and the market drops? What if I wait and rates move? 

AI will offer them the illusion of certainty. You need to get way ahead of this. Run both scenarios with them. Tell them what AI will likely surface. When AI tells them exactly what you already did, your credibility doesn’t just grow. It compounds.

Command and control. 

The Most Important AI Strategy a Realtor Will Need for the Rest of Their Career

The trust issue in real estate is irreparable, and the industry has no intention of fixing it. In fact, its recent activities suggest it’s determined to keep it that way. 

But you can make your trust unassailable. One client at a time. One moment at a time.

Play the long game. Dedicate yourself to elevating your marketing and branding. Focus on dispensing knowledge. Insight. Guidance.

Set your bar to be the E.F Hutton of real estate, not Bozo the Realtor. 

When you talk, you want people to listen. And heed. Do this, and you’ll make the most important strategic move of your career.

The post The most important AI strategy appeared first on 1000WATT.

Agents will determine the fate of the MLS. Not Compass. Not Zillow. Not anyone else.

Agents. Independent contractors conditioned to work within unnaturally siloed databases dressed in vintage software. The MLS is the air they breathe. 

This behavioral anchor is heavy. So while MLSs may be made into Compass’ useful idiots, or a competitive platform may emerge, agents’ appetite for dramatic change will decide the main question.

Let’s take a breath.

…

I thought Robert Reffkin was going to make a deal with Zillow. The fact that he didn’t is even more of a head-scratcher now that Zillow has launched its own coming soon program, a thoroughly predictable move in response to his alliance with Rocket/Redfin. 

Now Compass finds itself locked into an exclusive deal with a portal with just a fraction of Zillow’s audience. And it’s actually worse than that, because these audiences are not discrete, and the overlap benefits the category leader, Zillow. In other words, there are likely more Redfin users that also use Zillow than vise-versa. The Redfin deal may have been exclusive, but the Redfin audience isn’t. 

And now that Zillow’s coming soon program involves roughly the same number of potential listings, the idea of “getting your home in front of 50 million people on Redfin” kind of feels like sitting at the kid’s table. 

Maybe Compass thought Zillow would be too fussy about its “turn on the lights” principles to abandon days on market on coming soons? Or that they’d be too bound to Premier Agent/Zillow Preferred to offer them on a your listing/your lead basis? I don’t know. 

The people at Compass are smarter than I am. They’ve also been wiping the floor with Zillow for a couple years now on framing and messaging. But I think they tripped here. 

…

This is a time of many ironies and much “the enemy of my enemy is my friend” pragmatism. 

Consider the response to Zillow’s coming soon plan. So many brokers and franchisors on board so fast. Part of this is their need to have a listing presentation story their agents can use to compete with Compass’ new Redfin pitch. The other part – the money – is more interesting. Zillow is cutting the listing agent in on their referral fee, which is actually a meaningful offer because Zillow is really freaking good at making money off of listings. You can scream “your listing, your lead” till the cows come home, but if you can’t monetize it you don’t really gain much. Better to take the spiff from Z. It’s like money found between the couch cushions.

Zillow’s referral model is profitable, so I’m interested to see if they expand this beyond coming soons to cut listing agents (and maybe brokers, too) a very small piece of every transaction closed through one of their partner agents. It’s something like lead conversion as a service… but free.

This is why I think Zillow holds the best cards if IDX blows up and portals go back to syndication feeds from brokers. 

…

So maybe you’re a broker or team lead who’s not enthusiastic about private listings, or even coming soons. Maybe you flinch whenever someone says “Three Phase Marketing Strategy.” I understand. But the only constructive move now is to develop and promote your own differentiated home marketing system. Maybe it involves private listings, maybe it doesn’t. The point is to have something that can compete.

We’re working with a couple clients on this right now, and will be exploring this at our Signal event. It’s everything.

It feels like an imperative, but it’s also an exciting opportunity to reimagine the story we tell about how a home gets sold. 

Enjoy the weekend.

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I believe they will win that bet. 

Even so: Why on earth would you buy a sprawling, debt-laden enterprise with a mixed-bag of brands that had performed anemically for a decade (consistent losses in company-owned brokerage, profit in franchising, overall GAAP net losses in 8 of the past 10 years) and had already undergone years of cost-cutting?

The answer isn’t complex. Compass bought Anywhere to amass enough scale, and therefore enough power, to do what it wants to do.

What it wants is to become a very profitable real estate enterprise.

That’s far harder than it used to be, as you know. It’s even harder when you take the rules, norms, and authority structures of the industry for granted — when you consent to be constrained by them.  

Compass bought Anywhere so it could break those constraints. Honestly, I doubt they’re stoked about owning Century 21, but it’ll do the job as a part of a blunt force directed at knocking the real estate world off its axis.

So, flout NAR rules. Give Zillow the finger. Call for a national MLS. Cut a listings deal with Rocket. Put thousands of homes inside a black box (literally and figuratively) and force buyers to work with your own agents to see them. Because you can now.

It is left to everyone else to respond. This will mean private listing programs within brokerages (more on that below), private networks between brokerages, and the kind of portal competition we haven’t seen since pre-IDX days. From a broker perspective, it means MLSs can be brought to heel. 

A small independent broker/owner asked me this week, “what do I do now?” My answer: “get more listings”. 

We are in a time of stark realities.

…

My position has been, and remains, that “private exclusive” listings leveraged as a core strategy, systematically, at scale, in the manner of Compass, are bad for consumers. I also think private exclusives, wielded aggressively, are likely to come back and bite the industry in the ass. 

I want to believe that I have that wrong. Because I am not a partisan. I don’t work for Zillow, or for Compass, run an MLS, or own a brokerage.

…

I met with Robert Reffkin about a year ago. We had a spirited but cordial discussion. I think he found me a little puzzling. Aside from my conviction around his private exclusives strategy, which we debated, we agreed on most other things. 

At one point, he asked me, “What are you for?” My response was that I’ve always been for an industry structured to help the most skilled, most ethical, most client-focused real estate professionals win more often, because our current set-up and incentives often work directly against that. 

We both thought that was a good thing to be for, but had different ideas on the best way to make that happen.

…

And then this: Howard Hanna has launched HannaList, an internal listings network. I think some have failed to see the nuance in this move, jumping right to the “OMG, here we go, another strategy to hide listings!” conclusion.

I mean, OK, yes, these are listings that are not public, but I believe Hoby Hanna meant what he said in an interview yesterday with HousingWire:

“…we aren’t the other 800-pound gorilla saying that we have significant market share wanting to hide listings so we can get more buyers.”

The allusion there was to Compass, and it makes a meaningful distinction. Howard Hanna is first of all gaining control of its data, which, right now, seems insane not to do, and also operates mature mortgage, insurance and title operations, which benefit from early engagement from sellers (we seem to forget that two thirds of sellers are also buyers). HannaList is even compliant with the Clear Cooperation rule, for whatever that’s worth anymore.

Let us also remember that eXp launched a nationwide private network, eXp Exclusives, just two years ago. Coldwell Banker launched an internal network, “Exclusive Look,” way back in 2019. There are others.
My point: Having an internal listing network isn’t inherently problematic; what you do with it can be. This is the complexity worth understanding as we move forward, ever faster, into a new field of play.

The post Friday Flash: Nuance and stark realities appeared first on 1000WATT.

Well, the deal went down — it just wasn’t the one I thought would happen first.

To begin thinking about the Compass/Rocket/Redfin news, let’s go back to June of 2014. 

That’s when Zillow launched a Coming Soon listings program to put off-MLS homes in front of home shoppers. It was exclusive inventory. 

In launch communications, Zillow described this as a boon for buyers, who would get an early peek at homes, as well as for sellers, who could test pricing and avoid the days on market clock. 

Some MLSs were upset, but many soon developed their own coming soon policies and were able to feed these listings onto Zillow. 

Consumer advocates called foul. Cries of “pocket listings!” and “double-ending deals!” rose. 

A month after announcing this Coming Soon initiative, Zillow acquired Trulia. Realtor.com stagnated. Redfin was bogged down meeting its bi-weekly agent payroll. The path to category dominance was opened. Zillow became Zillow. 

The Coming Soon train, meanwhile, rolled along until 2019, when NAR enacted its Clear Cooperation Policy, which limited the Coming Soon opportunity due, in part, to its own internal contradictions. The train lost steam. 

This isn’t me calling out Zillow for changing its stance over the course of a decade (Quick reminder: publicly-traded corporations aren’t your mom), but rather to make an observation relative to Rocket/Compass:

Zillow did not achieve category dominance through exclusive content, and Rocket, Redfin, and Compass probably won’t either. 

Don’t get me wrong. This is a big, smart deal, particularly for Rocket, which has never had great success in the Realtor channel. Now they have something like a mega-MSA that nests them cozily within the Compass tech ecosystem. Compass will get 1.2 million leads from Rocket and Redfin over the course of three years. Leads equal leverage if you’re a broker or franchisor, so this will help Compass drive the behavior it wants from its sprawling new network.

Compass also now has a story to counter the Zillow listing ban, a cake-and-eat-it-too pitch of big distribution without those “negative insights.” I’m not sure it neutralizes a seller’s concern about not being on the world’s biggest home search site, but it’s something. 

And while I’ve never believed Compass’ private exclusives strategy was principally about double-ending deals (I see it as a recruiting, retention, and split leverage play vis-a-vis agents, with in-house deals as a happy second-order effect), I do think putting this inventory in front of a scaled audience does create the conditions for that to happen more often. Content meets distribution, sellers meet buyers, a two-sided marketplace is created. 

Robert Reffkin speculated on yesterday’s Compass earnings call that up to 500,000 Coming Soon listings will be sent to Redfin from the 340,000 agents within the new mega-Compass. That’s a gross overestimation. I suspect it will be a significant number, but probably not enough to lift Redfin to Zillow-like traffic. And the large majority of those listings will end up on Zillow anyway, via the MLS.

So, my take is that this is a big deal – probably bigger for Rocket than for Compass – but one that on its own is unlikely to knock Zillow out of first place, or spell doom for non-Compass agents and brokers.

The more dramatic counter-take, one I see as less likely but still possible, is that with Clear Cooperation ignored or unenforced, the power that Compass-like scale activates actually does break the back of the MLS as we’ve known it. If that happens, things get far more challenging for Zillow, and for everyone else not part of the Compass network. In this scenario exclusive inventory does change the game, where it didn’t back in 2014. 

Time will tell.

A final note:

On the Compass earnings call, which happened shortly after the deal was announced, Robert Reffkin said this in response to an analyst question:

“I don’t see a scenario where the MLSs will continue to enforce these restrictive rules with Rocket on our side… for 2 reasons. One, because we now have more resources. Two, because they’re going to lose their moral narrative. Their moral narrative, [that] these listings are hidden.”

Of course, he’s ignoring the fact that while Compass Coming Soons will now be exposed much more widely, Private Exclusives will remain, well, private, while also getting teased much more powerfully.

But, wow, losing the moral narrative… that sticks with me. Not because I believe Compass is acting immorally, but because to the extent that considerations of right or wrong were ever a big part of our debate about private listings (this argument was always mostly structured by self-interest), we have moved now – fully, self-consciously – in an industry era defined not by cooperation or norms, but by power. 

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