How Zillow Preview affects Chicago’s battle over pre-market inventory

The battle over real estate listing access and seller choice took a big turn last week when Zillow announced Zillow Preview, a pre-marketing program that allows sellers’ agents to advertise listings before they’re entered in the Multiple Listing Service.
In Chicago, the rollout comes amid a fierce turf war over the control of early inventory. Zillow has taken issue with Midwest Real Estate Data’s Private Listing Network, an MLS option that allows agents to advertise listings to other MRED participants, but keeps them off public channels like Zillow and Redfin.
Although Zillow previously threatened to block listings from its site if they appeared on MRED’s private network before going public, the home search giant never began enforcing its standards in the Chicago market. It said it was working with MRED to resolve the impasse. It isn’t immediately clear what the new approach means for Zillow’s issues with Chicago’s private market.
Zillow’s updated listing standards appear to still prohibit listings that appear exclusively on the Private Listing Network — without any marketing on a public site — from eventually going public on Zillow’s websites. Zillow and MRED did not respond to requests for comment.
For agents looking to get more eyeballs on their property before a full debut, the two pre-marketing strategies can work in tandem, said Joe Zimmerman, the operating principal at Keller Williams OneChicago. Keller Williams is one of the initial firms with access to Zillow Preview, along with Re/Max, HomeServices of America, Side and United Real Estate, according to Zillow’s press release.
“If they want to see maximum exposure while being on a preview type listing, probably the avenue of doing both [Zillow Preview and the Private Listing Network] would give them the most views,” Zimmerman said.
Zimmerman said that strategy will be another option for sellers who want to generate interest in their property and test the market before opening up for tours.
“This is about giving the agents, and most importantly, their clients, more optionality in how they go to market, not replacing the existing system,” Zimmerman said.
The new program also contains an incentive for agents: Listing agents will receive an extra 10 percent of the buyer commission, paid by Zillow, if a Zillow Preview deal closes with a Zillow Preferred Agent representing the buyer.
Michael Rosenblum, a Berkshire Hathaway HomeServices Chicago agent who specializes in luxury downtown condos, said he sees Zillow Preview as serving a similar function to the Private Listing Network and national agent-exclusive networks, but with a broader reach.
“These kinds of platforms already exist in one way or the other, so why should people fight it? Let the information go out,” he said. “We know our clients are online looking at a million different properties, but the minute they want to see something, they’re going to call us because they value what we’re all about.”
Compass, allies claim win for seller choice
For Chicago-based @properties Christie’s International Real Estate, which is part of Compass’ holding company, Zillow’s embrace of pre-marketing serves as validation of the approach its leaders have trumpeted as “seller choice.”
“Sellers want options for how, when and where they go to market, and buyers want options too,” @properties co-CEO Thad Wong said in a statement. “Demand has been the through line. It’s driven our own business strategies, the success of the PLN, NAR’s policy changes, the Compass/Redfin partnership, and so on. Zillow’s move simply shows they’re starting to listen to what the market has been saying all along: ‘One size does not fit all.’”
After Zillow’s announcement last week, Compass dropped its lawsuit challenging Zillow’s listing rules. Compass Chicago agent Rafael Murillo said he doesn’t think Zillow Preview threatens Compass’ three-phased marketing strategy, but rather signals a shift in the industry toward Compass’ marketing model.
“We made this approach mainstream, and now everyone is jumping on the bandwagon positioning themselves as innovators — despite previously criticizing Compass. And even now, many are trying to reshape the narrative to suit their position,” Murillo said in a text message. “The reality is, Zillow has pivoted.”
Zillow, in its release, said its program differs from others because it doesn’t require buyers to work with a specific brokerage, but rather advertises listings broadly on the country’s dominant real estate search website.
Local independent weighs participation
Although Zillow is launching Preview with five initial brokerages, it said in its press release it would begin opening access to other firms soon.
Baird & Warner, the largest independent brokerage in Chicago, is considering whether it will participate in the program, said Laura Ellis, chief strategy officer and president of residential sales at Baird & Warner.
Baird & Warner has been critical of Compass’ private listing strategies and supportive of measures like Clear Cooperation Policy that require listings to be made broadly public. Still, Ellis said she’s supportive of Chicago’s Private Listing Network because of the broad visibility for area brokers.
Ellis said she’s waiting to learn more about the details of the Zillow Preview, but she’d be open to joining if the program didn’t restrict Baird & Warner agents from sharing pre-market listings on other venues as well.
“We’ll be open minded, we will look at that,” she said. “As long as we’re able to operate as we have operated, which is in a very fair and transparent manner, then we’ll be fine with it.”