Some of the leading figures in residential real estate gathered in a Manhattan courtroom this week for a legal dispute over private listings. The hearing, which lasted four days and began on Tuesday, centered on Compass’s lawsuit against Zillow regarding rules that prevent agents from listing homes on Zillow if those homes are also publicly marketed outside the Multiple Listing Service (MLS).
Compass filed the lawsuit in June, arguing that Zillow’s policies are “anticompetitive” and were put in place after Compass introduced a marketing strategy that starts with sellers listing their properties on Compass’s private exclusive network.
Among those present with Compass CEO Robert Reffkin were several prominent New York City agents, including Leonard Steinberg, Eugene Litvak, and Heather Domi. In court, Reffkin’s legal team repeated arguments from earlier filings. Kenneth Dintzer, attorney for Compass, stated that Zillow’s updated rules—referred to as the “Zillow Ban”—were created “to quash the threat posted by Compass.”
On Wednesday, Zillow CEO Jeremy Wacksman testified and rejected claims that the policy targeted Compass specifically or was meant to treat it as a direct competitor.
Both companies argue that the outcome of this case could influence how residential agents operate and who controls access to property listings. The case has significant financial implications for both sides.
The choice of Manhattan as the location for this dispute is notable since it is home to Compass headquarters. If Compass prevails, its approach to marketing homes—beginning with private listings—could become more widespread. Off-market deals are already common in New York City; earlier this month, a mansion in Gravesend sold for $32 million without being listed publicly.
In new developments like Zeckendorf Development and Atlas Capital’s 80 Clarkson project, units are sometimes sold before they appear on public platforms such as StreetEasy or Zillow. Agents often rely on personal connections to facilitate high-value transactions privately.
Despite these practices, most property sales still occur through open market listings. Data from Compass shows that many homes initially marketed as private exclusives eventually end up on MLS platforms accessible via aggregators like Zillow.
Separately this week, proptech startup Tulu announced it had raised $37 million in Series A funding led by GreenSoil PropTech Ventures, Bosch Ventures, and New Era Capital Partners. Tulu provides an AI-powered app allowing tenants to rent items such as vacuum cleaners and gaming consoles. Its clients include major landlords like Related Companies, Brookfield Properties, and RXR Realty.
The investment comes amid a downturn in proptech funding following record highs in 2021 when investors contributed about $9.5 billion to startups in the sector. Since then venture capital interest has declined; according to data from the Center for Real Estate Technology and Innovation, funding dropped by more than 14 percent during the first half of 2024 compared with the same period last year.
Brendan Wallace of Fifth Wall recently told The Real Deal there may be signs of renewed momentum within proptech investment.
Last week’s most expensive real estate transaction recorded in New York City was at Extell Development’s 50 West 66th Street: Unit 42E—a condo featuring eight bedrooms and eight bathrooms—sold for just under $45 million to an anonymous buyer using an LLC named Pipedream 66.
