BARRISTER'S BRIEFING: Understanding Zillow: Membership and Anti-Trust Activity

Brian Levine | February 8, 2021

Brian Levine, Esq.

Remain calm and carry on! Do not panic! Yes, the rumor is true. So, what am I talking about? Well, if you haven’t come out of your home, picked up a newspaper, or read a trade publication since the beginning of the pandemic, then please allow me to be the first one to inform you that…wait for it… Zillow is now a member of HGAR and a participant in our OneKey MLS.

Yes, you heard that correctly. Zillow is now a brokerage. While for some of you this might strike fear into your hearts, and shouts of: “The fox is in the chicken coop” or “The sky is falling,” the reality is, this is a good thing all around. We just need to understand the bigger picture and what this means. We also need to understand how we need to act to this new development.

Zillow as a Member

Zillow is now a licensed brokerage in the State of New York and on Oct. 8, 2020 Zillow joined HGAR as a Realtor member (as well as becoming a member of NAR and NYSAR). Thereafter, Zillow became a participant in the OneKey MLS. It currently identifies an office in Manhattan and, at the time of the writing of this article, it has two agents. If this were any other brokerage, no one would give it a second thought. But this is Zillow. It’s the company that everyone identifies as one of the go-to property search websites for the public. So, now that Zillow is a Realtor brokerage, what does that mean? Well, for starters, it means that Zillow, like all other Realtors must comply with the NAR Code of Ethics, including acting in the best interests of their clients and treating all parties fairly. They cannot make false or misleading representations in their activities or in their marketing and advertising. They must comply with New York Advertising Guidelines. They must conform with the new clear cooperation regulations and the recent “coming soon” rules. They can be brought before the Professional Standards Committee for violating the Code of Ethics or to resolve an arbitration dispute. All these things are good and will hold them, as it does all Realtors, accountable. It also pays dues and can have an equal, active voice in all its association activities, just like everyone else.

What will be different is that Zillow will no longer provide real estate listing information in the same way as it once did in the past. Previously, Zillow entered into individual contracts with MLS providers and brokerages to receive direct feeds from these providers. It charged agents and brokerages for various services and exposures on its website. That will now change. Like all OneKey participants, Zillow will receive an IDX feed. This feed is identical to the feed that all participants receive, and Zillow will be required to comply with the policies and guidelines established by NAR, as well as local policies, on how the IDX feed can be utilized. In short, the information they receive will be exactly the same as the information that is received by all other OneKey participants. The playing field is leveled, with one slight hiccup.

There will be one slight difference with Zillow’s website. We have been informed that while Zillow will have the IDX feed that will supply them with the same listing information that is received by all other participating brokerages, it will also maintain another area on its website that is separate and apart from their IDX feed. These listings will not be comingled with their IDX feed. That section(s) will contain rentals (Zillow will not subscribe to obtain rentals via the IDX feed) and For Sale by Owner (FSBO) listings. These will be paid placements. Aside from that exception, Zillow’s information and pictures will be identical to any other New York broker’s information and pictures. Its website will be just as informative as anyone else’s, aside from the rental and FSBO information.

Disparagement and Anti-Trust Actions Against Zillow

It is important for us to understand and remember that Zillow is now a Realtor brokerage. As such, all Realtors are required to treat it with the same amount of respect, courtesy, and ethical standards that would apply to any other member. Realtors should not disparage it in any marketing, advertising, or social media platforms, including blogs, Yelp and e-mails. Simply because it utilizes a different business model does not mean that a Realtor can criticize, snipe, or attack its agents, the brokerage, or its transactions. Failing to comport with the Code of Ethics could result in the offending party being brought before a Professional Standards panel on ethics charges and subsequently disciplined. Depending on the gravity of the offense, the Realtor could be reported to the Department of State, or worse still, sued in a court of law.

More important is that no Realtor or brokerage should ever discuss, allude to, or act in such a way that could be perceived as violating anti-trust laws. Anti-trust laws are state and federal laws that are designed to protect competition and eliminate artificial restrictions on competition. Such activities include, boycotting, price fixing, bid rigging and other restraint of trade activities. A Realtor should never threaten, joke or in fact refuse to work with a brokerage, show that brokerage’s properties, boycott that business, reduce its cooperating compensation, or act in any way that would detrimentally impact that other brokerage or its standing with the public simply because that brokerage operates under a different business model. A Realtor that engages in anti-trust activity could find themselves in a suit brought by the U.S. Department of Justice, the Federal Trade Commission or the New York Attorney General.

Conclusion

Zillow becoming a Realtor member may make others in our industry apprehensive. However, as a Realtor, Zillow commits itself to upholding all the same standards that all other association members hold important. While Zillow’s business model may differ from other brokerage’s business models, Zillow is a welcome addition to our diverse membership. All brokerages live and die by their transactions and business models and we should wish all Realtors continued success in this ever-changing industry. There’s plenty of business for everyone.

Brian Levine
Brian S. Levine, Esq. is In-House Counsel/Director of Legal Services & Professional Standards Administrator for the Hudson Gateway Association of Realtors.