What NJ Home Sellers & Agents Need to Know

The ongoing legal battle between real estate heavyweights Zillow and Compass is making waves from coast to coast—including right here in New Jersey. Here’s what you need to know about the lawsuit, how it could affect local agents and sellers, and what’s really at stake for the future of listing practices.

The Lawsuit: Transparency or Competition?

Compass recently filed a lawsuit against Zillow in the Southern District of New York. The core dispute centers on a new policy Zillow rolled out in spring 2025: any property that’s marketed to the public—say, through a sign in the yard or a social media post—must be posted on Zillow and in the Multiple Listing Service (MLS) within one business day. If not, that listing will be completely blocked from appearing on Zillow or Trulia

Compass argues this policy is unfair and anti-competitive, limiting homeowners’ options and giving Zillow too much control over which listings reach buyers. They say sellers should have the right to decide how to market their home—even if it means a “private exclusive” or “coming soon” phase where only a select audience gets to see the listing first.

Zillow, in turn, insists it’s about fairness and consumer transparency. They argue their standards ensure all buyers have an equal shot at every listing, eliminating the days of “pocket listings” that might never show up online for most searchers

What Each Side Is Saying

Zillow’s Position

Market Openness: “If a listing is marketed to some buyers, it should be marketed to all buyers”—that’s the guiding principle behind Zillow’s new standards.
No Special Treatment: Zillow claims it’s not legally required to accept every listing, nor to accommodate business models that limit access or transparency.
No Collusion: Conversations with other brokerages like Redfin and eXp were, according to Zillow, simply courtesy calls—not efforts to form any anti-competitive agreements
Defending the Marketplace: Zillow frames its actions as defending the integrity of a fair and competitive real estate market, not harming agents or consumers

Compass’s Counter

Homeowner Choice: Compass maintains that homeowners deserve the right to choose how they sell their homes, and that no company should have enough market power to dictate those choices.
Allegations of Coercion: The brokerage compares Zillow’s tech dominance to Amazon banning external sellers—a move they claim would be unjust in any market.
“Three-Phased” Marketing: Compass believes its unique listing strategy, which begins with private exclusives before going public, gives sellers flexibility and privacy, especially when they’re not ready for widespread exposure

How the Standards Work

Immediate Sharing: As of May 28, all public listings must be entered into the MLS and Zillow within one business day of first being marketed
Penalties: After two “non-compliant” listings, any subsequent rule-breakers from that agent will be banned from Zillow and Trulia for the duration of that listing’s agreement

Impact: The number of NJ listings affected by these new rules isn’t public, but other markets have already seen properties blocked for non-compliance.

Why It Matters in NJ

For Home Sellers: You may lose the ability to “test the market” with an exclusive or coming-soon listing without first sharing it broadly.
For Agents: Navigating these new rules means adapting marketing strategies to avoid losing out on Zillow and Trulia’s huge audience—which is especially crucial in competitive NJ regions.
For Buyers: These changes are likely to increase transparency, reducing the chances that you’ll miss out on hidden homes for sale

The Bigger Picture

This high-stakes lawsuit highlights a shifting landscape in real estate, with platforms like Zillow pushing for more data transparency and brokerages like Compass arguing for seller choice. For New Jersey buyers, sellers, and real estate professionals, understanding these rules—and how they’re enforced—will be key as the market continues to evolve

Zillow vs. Compass