What Zillow’s Criticism of Real Estate Gets Wrong
Zillow recently claimed that same-agent dual agency and off-MLS listings cost home sellers billions of dollars.
That is a serious accusation. It deserves a serious response.
Real estate is not an 80,000-foot spreadsheet. It is local, personal, emotional, financial, and relational. People are still the point.
A Serious Accusation Deserves a Serious Response
Zillow recently published an article claiming that same-agent dual agency and off-MLS listings cost home sellers billions of dollars. According to Zillow, sellers in same-agent dual-agency transactions lost a combined $1.49 billion over three years, while sellers whose homes were kept off the MLS lost another $1.36 billion. Zillow framed both practices as a consistent pattern of harm to consumers.
Let me say this plainly: bad representation should be called out. Poor disclosure, conflicted advice, weak negotiation, and brokerage-first behavior have no place in this profession. If an agent recommends a strategy because it benefits the agent more than the client, that is wrong.
But Zillow’s conclusion is far too broad, far too convenient, and far too self-serving.
The real estate business is not an 80,000-foot spreadsheet. It is not a clean algorithm. It is not a portal click, a lead-routing system, or a valuation model.
Real estate is local. It is personal. It is emotional. It is financial. It is relational. It happens across kitchen tables, on difficult phone calls, inside family transitions, during estate sales, divorces, job changes, investment decisions, relocation pressure, retirement moves, and life-altering moments.
That is where the real estate professional earns their value. Not as a door opener. Not as a form filler. Not as a lead responder. But as a trusted advocate.
Zillow’s Data Does Not See the Whole Transaction
Zillow’s article sounds definitive, but its own methodology exposes the weakness in the conclusion.
Zillow analyzed transactions from 2023 through 2025 and defined same-agent dual agency as one individual agent representing both buyer and seller. It defined private listings through data signals such as homes reported pending or closed with limited active market time, or off-MLS sales with prior MLS history. Zillow then compared sale prices to a Zestimate-based expectation and drew conclusions from large groups of transactions.
That may identify a pattern. It does not tell the whole story.
It does not know the seller’s motivation. It does not know whether the property had tenants. It does not know whether the seller had privacy concerns. It does not know the condition of the home. It does not know whether there were repair issues, access limitations, family stress, timing pressure, financial urgency, estate complications, or strategic reasons for a more controlled process.
It does not know the actual conversation between the seller and the professional.
That matters.
A model can compare numbers. A model cannot determine whether a seller was properly counseled, fully informed, and knowingly chose one strategy over another.
That is the difference between data and judgment.
Zillow’s Own Valuation Tool Proves the Problem
Zillow’s analysis leans heavily on a Zestimate-based expectation. But Zillow’s own Zestimate page says the Zestimate is not an appraisal and cannot be used in place of one. Zillow also reports a nationwide median error rate of 7.20% for off-market homes.
That is not a small detail.
Zillow’s article says off-MLS sellers typically sold for 1.3% less than MLS-listed sellers. But Zillow’s own off-market Zestimate error rate is much larger than the reported 1.3% price difference.
That does not mean Zillow’s analysis is worthless. It means Zillow should speak with humility.
When the measurement tool has a known margin of error, and the real-world transaction involves dozens of human variables the model cannot see, the conclusion should be cautious.
Zillow’s conclusion is not cautious. It is accusatory. And that is the problem.
Zillow’s Failed Direct-Buy Program Proved the Limits of Its Data
There is another major piece of evidence Zillow should not ignore: Zillow Offers.
Zillow Offers was Zillow’s direct-buy, iBuying program. Zillow was no longer merely estimating values, selling advertising, or commenting on the industry from the outside. Zillow stepped directly into the transaction. It acted as the primary purchaser and seller of homes.
In other words, Zillow put its own money behind its own data.
And the program failed.
In November 2021, Zillow announced it would wind down Zillow Offers. The company reported a consolidated GAAP net loss of $328 million in Q3 2021, a Homes segment loss before income taxes of approximately $422 million, and an inventory write-down of approximately $304 million because it had purchased homes at prices higher than its current estimates of future selling prices. Zillow also expected an additional $240 million to $265 million of losses in Q4 tied primarily to homes it expected to purchase.
That is not an anti-Zillow talking point. That is Zillow’s own reporting. And it proves the point.
If Zillow’s data was not sufficient to protect Zillow when Zillow was buying homes with its own capital, then Zillow should be careful about using that same data-driven posture to condemn the professional judgment of local real estate professionals across the country.
The lesson is not that data is useless. The lesson is that data is incomplete.
Real estate cannot be reduced to an algorithm because homes are not commodities. Neighborhoods are not identical. Sellers are not identical. Motivation is not public record. Property condition is not fully captured in a database. Timing pressure does not show up cleanly in a spreadsheet. Negotiation skill is not visible in a Zestimate.
Real estate is human before it is mathematical.
Maximum Exposure Is Usually Right — But Not Always
Let me be clear: for most sellers, maximum exposure through the MLS is the right strategy.
The MLS remains one of the most powerful tools for creating competition, transparency, and market value. Most sellers benefit from broad exposure, open competition, and the largest possible pool of qualified buyers.
But “usually” is not the same as “always.”
There are legitimate reasons a seller may choose a more controlled marketing strategy. Privacy. Security. Tenants. Illness. Divorce. A high-profile owner. A property not yet ready for full public exposure. A seller who wants to test price before accumulating days on market. A family that does not want strangers walking through the home until the timing is right.
The key issue is not whether every seller must follow one rigid path.
The key issue is whether the seller received full disclosure, honest counsel, clear options, and a plain explanation of the tradeoffs.
That is professional representation.
A strong professional should be able to say:
“Here is what full MLS exposure may do for you.”
“Here is what a more controlled strategy may protect.”
“Here is what you may gain.”
“Here is what you may risk.”
“Here is what I recommend and why.”
“Here is your choice.”
That is not hiding the ball. That is serving the client.
Dual Agency Is Not Automatically Abuse
Dual agency can create conflicts. No serious professional should deny that.
It requires careful disclosure, clear boundaries, disciplined communication, and a client-first mindset. There are situations where dual agency is inappropriate. There are transactions where an agent should say, “This structure is not best for you.”
But Zillow’s framing suggests that one agent on both sides is inherently harmful. That is too simplistic.
There are cases where a seller knowingly chooses that structure because the terms, certainty, timing, price, convenience, or simplicity make sense. There are situations where an experienced professional can facilitate a clean transaction while fully disclosing the limitations and protecting the process.
The real question is not simply, “Was there one agent or two?”
The real question is, “Was the client fully informed, properly counseled, and given honest options?”
That is where professionalism lives.
Zillow Is Not a Neutral Referee
Zillow presents itself as a consumer advocate.
But Zillow is also a business with its own financial incentives.
Its business model is built around consumer attention, listing access, agent participation, advertising, software, mortgage, rentals, and transaction-related revenue. Zillow’s Preferred pricing page states that when an agent completes a transaction with a Zillow Preferred connection, Zillow is owed a percentage of the full commission the agent expects to earn. It also states that seller-originated connection transactions carry a 40% success fee in all markets.
So let’s be direct.
Zillow criticizes real estate professionals for earning commissions while operating a model that extracts revenue from the same transaction.
That does not make Zillow evil. It makes Zillow interested.
And interested parties should not be treated as neutral judges.
Zillow’s Roots Explain Its Strategy
Zillow’s history matters.
Zillow co-founder Rich Barton previously founded Expedia as a group within Microsoft before Microsoft spun it out as Expedia, Inc. Zillow’s own leadership biography confirms Barton’s Expedia background before co-founding Zillow.
That history helps explain the original dream: give consumers access to information, reduce dependence on traditional gatekeepers, and use technology to change an industry.
That worked powerfully in travel.
But real estate is not booking an airline ticket.
A home is not a seat assignment. A seller is not an itinerary. A buyer is not just a click. A neighborhood is not just a data field. A property condition issue is not just an algorithmic adjustment.
Real estate is too personal, too emotional, too local, and too high-stakes to be fully disintermediated.
Zillow learned that. Its direct-buy program proved it.
So the strategy shifted.
Rather than replacing the professional outright, Zillow positioned itself between the consumer and the professional. It became a portal, a gatekeeper, a lead source, a software provider, and a transaction-adjacent revenue engine.
That shift has consequences.
When agents pay large fees for access to consumer relationships, those costs do not disappear. They become pressure inside the transaction. When consumers rely too heavily on automated values, they may overprice, underprice, delay, distrust sound counsel, or make poor decisions based on incomplete information.
The irony is obvious.
Zillow criticizes the industry for practices it says cost consumers money, while Zillow’s own model adds costs, incentives, and platform pressure into the real estate ecosystem.
The Compass Fight Was Really About Control
The recent conflict between Compass and Zillow also revealed something important.
This fight was not merely about private listings. It was about control of the marketplace.
Compass accused Zillow of illegally restricting listings through what Compass called the “Zillow ban.” Reuters reported that Compass dismissed its antitrust lawsuit after Zillow agreed to open its platform to more sellers through Zillow Preview. Reuters also reported that Compass had accused Zillow of refusing to list homes that brokers had marketed privately for more than one business day.
To be fair, a federal judge had previously rejected Compass’s request for a preliminary injunction. Reuters reported that the judge said Compass was unlikely to succeed on the merits at that stage, had not shown direct evidence of an anticompetitive agreement between Zillow and Redfin, and had not made a clear showing that Zillow monopolized online home listings.
That distinction matters.
The point is not to declare Zillow legally guilty of monopolistic conduct.
The point is that powerful platforms, large brokerages, MLS systems, and consumers are now fighting over a central question:
Who controls how homes are marketed?
That question should not be answered only by portals. It should not be answered only by brokerages. It should not be answered only by MLS consolidation. It should be answered through informed seller choice, guided by competent local professionals, within a transparent and ethical framework.
Consumer choice matters. So does professional judgment.
Commissions Are Negotiable, and Service Is Not One-Size-Fits-All
Another weakness in Zillow’s broad-brush critique is that it treats the industry as if every transaction follows the same rigid economic structure.
That is not true.
Real estate commissions are negotiable. Service levels are negotiable. Marketing strategies are negotiable. The relationship between client and professional is not supposed to be a one-size-fits-all commodity.
Good agents and good brokers already understand this.
They negotiate compensation based on the level of service, the complexity of the transaction, the property, the client’s needs, the risk, the time involved, and the work necessary to create a win-win outcome.
Some clients need full-service representation. Some need a more limited scope. Some transactions are simple. Some are deeply complex. Some homes need full preparation, staging, marketing, negotiation, repair coordination, and strategy. Others require a different approach.
That is why the human professional matters.
A portal cannot customize fiduciary judgment.
A portal cannot sit with a client and weigh privacy against price.
A portal cannot explain why a seller’s preferred strategy may hurt them.
A portal cannot look someone in the eye and say, “I know this is what you want, but I do not believe it is in your best interest.”
A professional can.
The Answer Is Not Less Representation. It Is Better Representation.
Zillow is right about one thing: consumers deserve better.
They deserve transparency. They deserve clear disclosure. They deserve honest agency conversations. They deserve to understand the risks of dual agency. They deserve to understand the tradeoffs of off-MLS marketing. They deserve to understand compensation. They deserve to know what they are paying for and why.
But the answer is not to commoditize the professional.
The answer is to raise the standard of the professional.
That means better questions. Better listening. Better disclosure. Better documentation. Better preparation. Better counsel. Better communication. Better representation.
Because the real problem in this industry is not that consumers have too much professional guidance.
The real problem is that too many consumers have experienced too little true professionalism.
People Are the Point
The future of real estate will not be protected by defending every old practice. Some practices deserve to die. Poor disclosure deserves to die. Self-serving pocket listings deserve to die. Lazy dual agency deserves to die. Weak representation deserves to die. But the professional should not die.
The answer to Zillow’s criticism is not fear. It is mastery. The answer is not to attack technology. It is to use technology without surrendering professional judgment. The answer is not to pretend every agent adds value. Many do not. The answer is to become the kind of professional no portal can replace.
That means building trust before asking for truth. That means creating emotional safety before expecting honesty. That means preparing before presenting. That means controlling the process before claiming confidence. That means giving clients clear options, honest counsel, and steady guidance.
That is the heart of the Trust-To-Truth Method. That is why Control Before Confidence matters.
Zillow can organize information. But it cannot replace the trusted professional who sits across the table, tells the truth, explains the risks, protects the relationship, and helps the client make a wise decision.
The client is the point. The relationship is the point. Trust is the point. People are the point. And the real estate professionals who understand that will not be replaced by technology. They will be elevated by it.