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“If we had twice the market share … you can’t bully us anymore.” A trove of new documents sheds light on Compass’s fight with Zillow.

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In the ongoing war to dominate the real estate industry, Compass has set its sights on what it views as “organized real estate.” A vast trove of newly released documents sheds light on how it prepared to fight.

The internal messages, presentations and depositions were filed in court as part of the ongoing antitrust lawsuit between Compass and Zillow. Both Compass and Zillow filed more than 1,000 pages each. And the internal documents from Compass — which were included in Zillow’s filing — provide a never-before-seen look inside the nation’s largest brokerage at a time when it was stepping into the forefront of some of the industry’s biggest debates.

Among other things, the documents show that Compass defined “organized real estate” as the National Association of Realtors, multiple listing services and Zillow. The three work to control how real estate agents conduct their businesses, Compass executives indicated, and the brokerage wanted to grow as part of its strategy to fight.

“If we had twice the market share in all of our markets, you can’t bully us anymore,” CEO Robert Reffkin said in a May 13 call with Compass sales leaders and brokers of record. A transcript of the call is included in the documents.

The documents also highlight initial confusion over whether the brokerage’s listings strategy violated a policy created and enforced by Zillow, which bans listings from the portal if they aren’t on the MLS and available to Zillow within 24 hours after marketing begins.

The policy took aim at what some at Compass called “the Compass Flywheel,” where the brokerage recruits top agents, gives them access to its servicing and lead-generation tools, and builds a stable of inventory that sets it apart from competitors.

The documents show that Compass executives were dead set on moving forward with the way they wanted to market Compass listings.

Compass declined to comment for the story, citing active litigation.

Compass agents had their doubts

Though Compass has presented a unified public front, the documents capture an internal debate among Compass agents about the company’s outspoken stance on listings that start off-MLS.

“We are going to have fair housing lawsuits,” one wrote in a text thread, which was referenced in an April email that was included in the documents.

“I’m curious exactly what we can and can’t do with syncing to Zillow now like what they’ll be able to monitor,” the documents show another agent writing. “None of this is good for compass a lot of bad press. I had a client yesterday tell me he’s been seeing in the news and Reffkin looks greedy.”

Others, particularly brokers of record, defended Reffkin as a vocal leader in the industry looking to make change.

Additionally, several members of the Compass agent community noted that they didn’t plan to use the brokerage’s 3-Phase Marketing Strategy after May, shortly before Zillow was set to begin enforcing its ban on listings that were publicly marketed for more than a day without being added to the public-facing MLS.

“It’s being portrayed in the media that compass wants to double end,” one wrote, “that’s the issue.”

Double-ending deals

The documents also suggest that Compass has, in fact, benefited from its three-phased marketing strategy.

In a slide from April, Compass addressed the assumption by some in the industry who believed the brokerage was looking to capture revenue from both sides of a transaction, a concept known as double-ending.

“Yes, over the last two years, pre-marketing results in a consistently higher % of [transactions] where Compass is on both sides,” the slide states. “Pre-marketing appears to be resulting in an increasing % of double-ended [transactions], given recent focus on Compass 3 Phased Marketing.”

The Compass slide showed that off-market sales double-end 72 percent more frequently than on-market transactions.

Confusion, talking points and ChatGPT

In preparation for a board meeting in April, Compass prepared to tell board members that Zillow’s policy did “not impact Compass Private Exclusives.” The company continued sharing that message internally, including as it sued Zillow in June.

“Private Exclusives and the Compass 3-Phased Marketing Strategy are still allowed under Zillow’s ban and we encourage every agent to share the benefits of them with their clients,” Rory Golod, president of growth and communications, said in an email to sales leaders, brokers of record and others on June 23, the day Compass sued Zillow to stop it from enforcing its policy.

But Compass agents had earlier sensed that their listings would be banned from Zillow if they started as a Compass Private Exclusive, the documents show.

“Zillow is saying even [Private Exclusives] will be banned,” one agent in Philadelphia wrote to Compass executives on May 20, the day that Zillow clarified what was included in its standards.

“We were confused at first what that meant because we are not publicly marketing it in private exclusives, so we asked ‘does this affect us?’ And Compass said no,” Kerry Carr, a Compass agent in Pennsylvania, said in a deposition by Zillow’s legal team. The deposition transcript is included in the documents.

The documents also show Compass deploying a strategy of stating that there could be benefits to not being on the nation’s largest real estate search portal.

“You don’t NEED to be on Zillow,” a note from a Compass presentation that is included in the documents said.

An email Reffkin sent to Compass’ then-Chief of Staff Will Hardy on April 12 also appears to show Reffkin using ChatGPT to generate a list of reasons “why being on Zillow is not necessarily in their best interest.”

Acknowledging Zillow’s power

In addition to downplaying Zillow’s power and effectiveness at getting homes sold, Reffkin struck a defiant tone toward the portal in internal statements and in his deposition.

“I’m not a slave to Zillow,” Reffkin said in his deposition.

But several Compass executives privately acknowledged that very few sellers would choose to market their homes in a way that risked being banned from the portal.

“Our homeowners saying that they’re terrified or agents saying that they’re absolutely terrified by the Zillow ban and the fear, they feel like they have a gun to their head, saying ‘If you don’t give me a listing in 24 hours [and] you market anywhere else, I will ban you,’ and do they take it off because of that? Yes, they’re terrified,” Reffkin also said in his deposition.

Golod said in his deposition that most sellers would view it as “insanely detrimental” to risk a Zillow ban.

“They theoretically could, but none would because it would be insanely detrimental to not have your listing on [Zillow] in the eyes of many — in the vast majority of sellers in the country,” Golod said. “So the number of sellers that are going to potentially agree to do a Coming Soon but not have their home show up on Zillow is probably almost zero.”

The ‘black box’

The documents confirm what had previously been left open for interpretation: Zillow believes that Compass’ display of a box showing how many Private Exclusives it has in a given market is public advertising that violates its policy.

Compass, on the other hand, maintains that it must include the so-called “black box” in order to avoid fair housing violations. Showing consumers that there were more listings available at the brokerage, Reffkin wrote in an April email, made sure there were no fair housing violations.

“Would it have made a difference to you to know that Zillow considers all Compass private exclusive listings to violate the listing access standards because of the black box?” Zillow’s lead attorney asked Carr.

“Yes,” Carr said, later adding, “I would be afraid to put that in private exclusives for the fear that it wouldn’t show up on Zillow.”

“What would be your reaction to finding out that Compass’ executives have known since at least May that Compass private exclusives violate Zillow’s listing access standards because of the black box?” Tuttle asked.

Email Taylor Anderson

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