[I have a business relationship with one or more of the companies mentioned herein.]
Okay... so NWMLS filed its answer along with counterclaims against Compass on Friday:
Northwest Multiple Listing Service (NWMLS) has filed counterclaims in federal court against Compass, Inc., alleging that the brokerage’s “3-Phase Marketing Program” violates Washington’s Consumer Protection Act because it is a deceptive scheme designed to manipulate and hide critical data from the public. As set forth in the counterclaims, while Compass markets itself as an innovator by scaling “pocket listings”, it is actually operating a ‘closed door’ system that hurts both buyers and sellers to line its own corporate pockets.
By withholding inventory from consumers and competing brokers, NWMLS argues Compass is creating a ‘two-tier’ real estate marketplace: one for the Compass-represented insider, and another, depleted one for the general public.
This case is a battle for the future of the American real estate market.
Strong language, and some strong claims. I was busy chuting out of town, but knew I had to get to it sooner than later. So here we go.
What a crazy six weeks it has been. Consider:
- Feb 6: The court denies Compass's preliminary injunction against Zillow on all claims.
- Feb 26: Rocket Companies and Compass announce a three-year strategic alliance. Compass's Coming Soon listings appear immediately on Redfin, with Private Exclusives to follow. Rocket Companies
- March 3: Washington SB 6091, lobbied for by Zillow and by Washington REALTORS, passes the House 92-1 and is sent to the Governor.
- March 17: Zillow announces Zillow Preview, launching with Keller Williams, REMAX, HomeServices of America, Side and United Real Estate. Zillow Group
- March 17: Washington Governor signs SSB 6091 into law, effective June 11.
- March 18: Compass dismisses its lawsuit against Zillow, with Reffkin citing Zillow Preview as a "reversal" of the Zillow ban. RealEstateNews.com
- March 19: NWMLS's motion to dismiss the Compass antitrust suit is denied.
- March 25: Zillow announces 24 additional Preview partners, bringing the total to 29 within a week of launch. RealEstateNews.com
- April 3: NWMLS files its Answer, Affirmative Defenses, and Counterclaims.
As of this writing, I am waiting for NWMLS to start enforcing its rules against Keller Williams, REMAX, HomeServices of America, Side and United Real Estate (along with the other 24 additional brokerages) for partying with Zillow on Preview. Let me admit that I am not holding my breath.
The media has covered this counterclaim in some detail, and WAV Group did a writeup as well. But most of them get a lot wrong and make statements that are simply... well, let's say "unsupported by evidence." For example, here's HousingWire:
Washington law now mirrors NWMLS listing rules
NWMLS said in its filing that its long-standing listing transparency rules have effectively been written into state law. Senate Bill 6091, which takes effect in June, requires brokers in Washington to market properties broadly to the public and to other brokers.
That standard — open, public marketing of residential listings rather than limited exposure to select buyers or internal networks — has been a core rule of the broker-owned MLS for decades, the organization said in the counterclaim.
For brokers and teams operating in Washington, the combination of MLS rules and SB 6091 means marketing strategies built around off-MLS exposure or extended private “coming soon” promotion will face heightened legal and regulatory risk once the law is in force.
I don't know where HousingWire (or NWMLS) gets that from. We'll get into it.
So let's look at the actual filing itself, what it claims and evaluate where things go from here. I don't think they go the way NWMLS hopes they will, but let's see, shall we? As always, I am not your lawyer, am not providing legal advice, and merely providing analysis and edutainment.