Court documents show how Zillow saw potential threats to its growth in the technology Compass was building for both agents and consumers.
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Among the court documents unveiled as part of the lawsuit between Compass and Zillow is an analysis Zillow conducted of potential threats to its future growth.
The documents are part of an expansive trove that provides rare insights into Zillow’s internal decision-making at a time of growth and intense debate. The documents largely center around the company’s response to the growing popularity of private listings last year.
However, a set of emails and an internal Zillow analysis show that the portal identified Compass’ growing suite of agent- and client-facing software as a challenge.
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The documents note that Zillow has grown a stable of tools and services that are used in the vast majority of real estate transactions, according to the company. In addition to home search and lead generation, the company offers a potent customer relationship management tool, a transaction management tool, and the most widely used tour scheduling software in the industry.
“Zillow’s software really, in essence, is the operating system for the real estate industry,” Mike DelPrete, a prominent real estate tech strategist, told Inman last week. “People don’t realize how powerful that software is.”
However, alongside its monumental rise to becoming by far the largest real estate brokerage by agent count, sales volume and sides, Compass has been adding services that, if used at scale, could encroach on the turf of Zillow’s software.
“In the same way that Compass’s exclusive inventory is threatening Zillow, you could say Compass’, or anybody else’s software platform that threatens to gain market share, is also threatening Zillow,” DelPrete said.
Significantly, Compass unveiled its client-facing Compass One platform on Feb. 3, 2025. Less than two weeks later, the court documents show, Steve Lake — Zillow’s senior director of strategy and partnerships — asked a strategy analyst for a “competitive teardown” on Compass One. Here’s what that analysis said.
Overlap with Zillow’s products
Zillow’s analysis framed Compass One as a tool that extends client relationships beyond closing, providing home search, market analysis and information for potential future transactions. The goal is to keep consumers engaged over the long term through Compass One.
“In a nutshell, Compass One platform is the client-facing extension of Compass’s end-to-end agent platform, which Compass built with over $1.7 billion of tech investment to integrate CRM, marketing, and transaction management,” the analysis states.
In its analysis, Zillow noted overlap with some of its own products. Among other things, Compass One includes features that appear to compete with Zillow’s Zestimate. And rather than setting up a home tour through ShowingTime — which Zillow bought in 2021 — buyers can request tours through their profiles in Compass One.
The portal also suggested some Compass tools may have an advantage over Zillow’s.
“While dotloop is a transaction management tool that allows agents to collaborate on docs, Compass One also gives clients a better insight into transaction steps,” Zillow said. “Buyers and sellers receive real-time updates on tasks, deadlines, and documents during a deal, all displayed in an easy-to-understand timeline.”
In other cases, Zillow saw its own technology as superior.
“While Compass has a more developed client-facing portal than Zillow, it seems that Zillow leads in backend software as Compass currently lacks tour scheduling technology, and [Zillow-owned CRM Follow Up Boss] is widely touted as the best CRM platform in the industry,” Zillow wrote.
Compass confirmed to Inman that it has no plans to develop a nationwide tour scheduling product.
Zillow also found that Compass One might give the brokerage higher attachment rates for ancillary services products such as home loans — which has been a major growth area for the portal.
“With tighter integration of the transaction process and greater control of agent-client communications, it is reasonable to expect higher financing attach rates on Compass-led transactions,” according to the Zillow analysis.
Citing ongoing litigation, Zillow declined a request for an interview related to its analysis of Compass One and other documents.
In a statement, the company pointed out that real estate companies like Zillow regularly evaluate new products and developments as “a standard part of delivering technology at scale.”
“For more than a decade, Zillow has focused on creating tools that help real estate professionals succeed, and our business results reflect that long-term investment,” a Zillow spokesperson said. “Real estate professionals from across the industry choose Zillow’s platform to grow their businesses and better serve consumers.”
“Our approach has always been to build open solutions that work for the entire real estate ecosystem, not just a single brokerage, and we remain focused on continuing to innovate in support of that goal,” the spokesperson said.
Indeed, as part of its analysis, Zillow noted that agents have a built-in advantage in becoming customers of the company. Agents and brokers frequently change brokerages, and working on Zillow’s platform allows them to change more easily than if they were entrenched in Compass’ internal technology, the analysis noted.
The analysis also suggested Zillow could consider speeding up the development of a “fully integrated, client-facing dashboard” that could help the company improve its value proposition, “raising the agents’ switching costs.”
Private listings and the ‘flywheel effect’
Zillow’s analysis went on to suggest that the portal would face additional risk if Compass required agents to use Compass One rather than third-party options like Zillow-owned Follow Up Boss and dotloop. If Compass agents’ communications with buyers and sellers started within Compass’ platform, it would become less likely that elements of the transaction would be transferred to Zillow products, the analysis said.
“If Compass agents have no choice but to use Compass’s tools for some of their listings, agents would likely question if [Zillow] products are significantly better to offset the inconvenience of using two distinct software systems for different clients, potentially leading to the abandonment of [Zillow products] among Compass agents,” the analysis explains.
Compass currently doesn’t have any restrictions on what tools and services its agents use, the company told Inman.
Zillow also feared the “flywheel effect” of agents and consumers feeling like they needed to work with an agent at a brokerage that had a robust private listing network — an issue that lies at the core of the lawsuit between the two companies.
“This could result in an even lower [total addressable market] for [Zillow products] if other brokerages follow Compass’s footsteps,” the analysis said, “developing in-house tools and blocking out [Zillow] tools from” private listing networks (PLNs).
“If a significant portion of listings goes to PLNs first, and brokerages can control software integration with their portals,” the analysis said, “there may be a reasonable trade-off for agents between the quality of their CRM/software and the extra pool of business they can access through PLNs.”
Email Taylor Anderson
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