How Could Zillow Respond?

Wargaming the more and less obvious possible responses

It is clear from the outset that the Compass acquisition of Anywhere is not seen as merely one big brokerage trying to grow by merging with another big brokerage. It is, instead, seen as taking the war against Zillow to the next level. I am one of those people who see things that way, obviously, if you read my first post on the topic, but I am hardly alone.

Real Estate News has a list of people who think the same. For example:

Mike DelPrete, real estate tech strategist, on LinkedIn: “Such a massive deal. The press release leaves out one of the most important strategic factors — and in 10 years time, what I think this deal will be known for — the leverage it now gives Compass in its ongoing push for exclusive inventory, but really its challenge to the existing MLS, NAR and Zillow hegemony. Game on.”

Glennda Baker, CEO of Glennda Baker & Associates in Atlanta, on LinkedIn: “Compass acquiring Anywhere Real Estate doesn’t just create a bigger brokerage, it creates a real estate Goliath. It’s now arguably the most powerful player in the industry, big enough to challenge Zillow, NAR, and essentially the ability to create a viable MLS with their own network.”

In my numerous conversations since the news broke, it is clear that one of the biggest questions on everyone’s mind is, “How does Zillow respond to this?” Because Zillow did just get punched in the nose by Compass’s move here, but they’re not exactly knocked out of the fight. Zillow won’t just sit back and take it; they will respond in some fashion.

I speculated at a high level in my first post. In this one, I wanted to dig in a bit more.

I have spoken to no one at Zillow or at Compass, so I have no inside information. All of what follows is based on my knowledge of both companies, conversations with other industry leaders, and what I know about how the industry actually works.

Let’s get into it.