Sanford fires back at Compass, argues against ‘walled gardens’

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EXp founder Glenn Sanford fired back at Compass on Wednesday, two days after being mentioned in a lawsuit Compass filed against Zillow, as the battle between brokerages continues to roil.

Sanford blasted recent consolidation moves, and the push for private listings that has become a flashpoint in the industry.

“This isn’t about any single company’s business model,” Sanford wrote on LinkedIn. “It’s about whether real estate maintains a competitive landscape where innovation can emerge from anywhere, or becomes dominated by a handful of capital-intensive players controlling listing access.”

Compass has used both consolidation and private listings to sustain its growth as the No. 1 brokerage in the nation by sales volume.

But as the founder of the No. 1 brokerage in the nation by total transactions, Sanford used his LinkedIn post to distinguish eXp from Compass and call for continued support of broad access to listings via multiple listing services.

“EXp handles more transactions than any other brokerage in the United States,” Sanford, who today serves as CEO of eXp parent eXp World Holdings, wrote. “We’re now large enough that we could create our own private marketplace and walled gardens. But we choose not to.”

The post was eXp’s first public response after Compass mentioned it in a lawsuit filed against Zillow on Monday over the portal’s new policy banning listings if they’re marketed off-MLS for more than 24 hours.

When Zillow announced the policy in April, eXp was quick to come out in support of it. Compass said that support amounted to conspiracy between Zillow and eXp. (EXp was not named as a defendant in the lawsuit.)

Compass is working to uphold its “3-Phased Marketing Strategy,” which includes a Compass Private Exclusive period where sellers privately market a property without listing it on an MLS.

In its suit, Compass revealed that nearly half of all the brokerage’s homeseller clients outside Washington state (48.2 percent) opted to start by marketing their homes as private exclusives during the first three months of the year, though most (94 percent) eventually list their homes on the MLS as well. The suit also argued that Zillow is a monopoly, forcing consumers to market their homes in a way that the portal wants so it can monetize the listing.

As part of its ban, Zillow has said public marketing includes yard signs, social media posts and brokerage private listing networks (PLN) where consumers must log into a site to see listings.

Compass CEO Robert Reffkin said his company sued Zillow to protect consumer choice.

“This lawsuit is about protecting consumer choice. No one company should have the power to ban agents or listings simply because they don’t follow that company’s business model,” Reffkin said in a statement. “That’s not competition. It’s coercion. Imagine if Amazon banned a seller for offering a product on their own website first. That’s what Zillow is doing in real estate. Consumers should have the right to choose how they sell their homes.”

The battle for private listings

The battle between Compass, Zillow and eXp, among others, gets to a key dividing line in the industry around when, where and how real estate listings are marketed.

Supporters of policies that have maintained broad public access to listings, including via Zillow and other real estate portals, say that it is unique and fosters competition among real estate companies.

In an exclusive interview on Wednesday, eXp Realty CEO Leo Pareja, speaking by phone from Barcelona, Spain, said broad access to listings via public portals and other websites made the industry in the U.S. far more streamlined than in most other countries.

“We as Americans take for granted the beauty of the efficient market that we enjoy in the U.S. and Canada,” Pareja said. Without access to listings via the MLS and other sources, Pareja added, “The process would be very difficult. It would take you six to 10 websites to maybe have an idea of what the inventory looks like. And months and months of hunting and pecking — no transparent market.” 

Alternatively, Compass has argued that its three-phased plan allows consumers to test the market for pricing, gain insights into aspects about the home and drum up buyer interest. The second phase involves marketing the listing on Compass.com as a “Coming Soon” listing, a status that doesn’t show price history or days on market. The final stage is listing the home on the MLS.

In response to Sanford’s LinkedIn post, a Compass spokesperson pointed out that eXp previously launched its own exclusive listing system.

“Compass is confused by eXp Founder’s statement that they ‘choose not to’ launch an off-MLS listing system because in 2023 eXp launched an off-MLS listing system called eXp Exclusives,” the spokesperson told Inman.

In October 2023, Pareja said eXp believed marketing on the MLS was the “highest and best form” of marketing a home for sale, but that there were “situations where sellers may not want to enter the property into an MLS due to restrictions on showing it and many other unique scenarios.” 

He specifically mentioned new-builds that aren’t yet finished, tenant-occupied rentals, or “properties whose sellers are just not comfortable entering into the MLS but would sell if they received an offer that satisfied their needs and worked with their requirements.”

Taking on Zillow 

Asked about Compass’ battle with Zillow, one industry insider noted that Zillow became a behemoth that now generates substantial revenue selling consumer leads to agents via listings it gets through the MLS.

“What I see happening as a result of Compass picking a fight with Zillow is that more agents join Compass, because Compass is standing up for agents,” said Victor Lund, a managing partner of Wav Group. 

On Sanford’s post, Lund said that the entrepreneur was “spinning a narrative.” 

“Which by the way is what all of them are doing,” Lund said. “These are all public companies that are spinning a narrative that is capturing the capital markets as well as their agents.” 

NextHome CEO James Dwiggins, who has been critical of Compass’ private listings push, said that if another major brokerage and franchiser followed Compass’ lead and launched its own private listings network where it had almost 50 percent of its inventory off MLS, it could have a domino effect on the industry.

“What ends up happening is that everybody has to respond in kind in order to keep their people so they don’t lose their agents,” Dwiggins said. “And all of the big companies launch their private listing networks, which is what you saw with Douglas Elliman and Corcoran.”

“It would be catastrophic,” he added, “and be so harmful to consumers.”

Email Taylor Anderson