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Lawmakers raise concerns about agent referrals, mortgage steering and private listings as scrutiny of Zillow, Compass and the online homebuying market intensifies.

U.S. Senators Elizabeth Warren and Cory Booker have called on the Federal Trade Commission to investigate potentially anticompetitive and deceptive practices in the online residential real estate marketplace, raising new questions about how major real estate platforms and brokerages influence homebuying transactions.

In an October 15 letter to FTC Chairman Andrew Ferguson, the senators urged federal regulators to examine business practices they contend may be increasing housing costs, limiting competition and preventing consumers from making fully informed decisions.

Warren is the ranking Democrat on the Senate Banking, Housing and Urban Affairs Committee. Booker is the ranking Democrat on the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights.

The letter identifies three practices the lawmakers believe warrant federal investigation.

First, the senators questioned online real estate platforms that direct consumers seeking information about listed properties to participating agents who share a portion of their commissions with the platforms. The lawmakers expressed concern that consumers may not understand these financial arrangements.

Second, they raised allegations that agents participating in platform referral programs are pressured to direct homebuyers toward affiliated mortgage lenders, potentially limiting opportunities to compare loan costs and terms.

Third, the senators criticized private listing networks that restrict access to properties before they become available to the broader marketplace. They argued that such practices could reduce competition among buyers and prevent sellers from receiving maximum exposure for their properties.

The letter comes amid an ongoing dispute between Zillow and Compass over the marketing and distribution of residential property listings. The companies have taken opposing positions on private listing strategies, with Compass advocating greater flexibility for sellers and Zillow emphasizing broad public access to listings.

In effect, the lawmakers seem to contend that both companies are bad actors, calling on the FTC to investigate.

The lawmakers’ concerns extend beyond that dispute, however, encompassing the financial relationships among online listing platforms, real estate agents and mortgage lenders.

The request also follows federal antitrust enforcement involving Zillow. In August, the FTC announced a stipulated order resolving its case challenging an agreement between Zillow and Redfin involving online rental advertising. The current congressional request asks regulators to extend their scrutiny to the homebuying marketplace.

The October 15 letter does not itself initiate an FTC investigation, and the allegations it raises have not been established as violations of federal law.

The senators have previously questioned major real estate transactions, including the Rocket–Redfin acquisition and the Compass–Anywhere merger, over concerns about competition and consumer costs.

Weekly Real Estate News has requested comments from Zillow and Compass regarding the senators’ letter.

WRE News will continue reporting on the companies’ responses, the FTC’s reaction, and the potential implications for real estate professionals and consumers as the story develops.