Senators Ask FTC to Probe Real Estate Referrals and Private Listings

U.S. Sens. Elizabeth Warren of Massachusetts and Cory Booker of New Jersey asked Federal Trade Commission Chair Andrew Ferguson on Thursday, Oct. 15, to investigate potentially deceptive practices in the online real estate marketplace. Their letter focuses on agent-referral payments, mortgage steering and private listing networks that they argue can raise consumer costs and reduce competition.

The request does not mean the FTC has opened an investigation, found wrongdoing or proposed a rule. It does, however, put several common parts of the home-selling process under a brighter federal spotlight—including how buyer inquiries are routed, how affiliated companies make money and whether a home receives full exposure to the market.

The senators are questioning who profits from online buyer inquiries

One concern involves the familiar “contact agent” feature on real estate websites. A buyer may believe the button reaches the agent representing the property, while the inquiry can instead go to a participating buyer’s agent who pays part of a future commission to the platform as a referral fee.

Warren and Booker contend that consumers may not clearly understand those financial arrangements. They also asked the FTC to examine whether agents receiving platform-generated leads are pressured to send borrowers to affiliated mortgage companies, potentially without adequate disclosure of the business relationship or a meaningful comparison of loan terms.

The letter references allegations involving Zillow Preferred agents and Zillow Home Loans. A lawsuit known as Taylor-Armstrong, which accused Zillow of tying agent leads to mortgage referrals, was dismissed in July. The plaintiffs renewed their claims in August, and Zillow is seeking dismissal with prejudice. Those allegations remain contested.

Zillow told HousingWire that it shares the senators’ concern about barriers to homeownership and supports greater transparency around listings. Compass International Holdings declined to comment on the letter.

The senators also pointed to affordability data from the National Association of Realtors: a national median existing-home price of about $440,600 and a median monthly mortgage payment of $2,199. Their argument is that referral charges, commissions and unfavorable financing can become more burdensome when buyers are already stretched.

Referral and mortgage arrangements can influence the strength of an offer

For sellers, the key issue is not simply which company receives a referral payment. It is whether the system changes the number, quality or financing reliability of the offers reaching the kitchen table.

A buyer connected to an agent through a paid referral network may still submit an entirely competitive offer. But the economics behind that referral can influence how agents structure their businesses and which services they recommend. If a buyer is directed toward a more expensive mortgage, the added monthly cost could reduce that buyer’s purchasing power or make the loan harder to approve.

That matters when a seller is comparing offers. The highest price is not always the strongest deal if the buyer’s financing has little room for an appraisal problem, rate movement or underwriting condition. Sellers should evaluate the complete package: loan type, down payment, lender documentation, financing contingency, requested concessions and the buyer’s ability to cover a valuation gap.

Sellers also should ask their listing agent how online inquiries about the property are handled. Useful questions include whether inquiries go directly to the listing team, whether platforms route them to unrelated agents and whether any referral arrangement could affect communication with prospective buyers. The objective is not to eliminate buyer agents or online marketing. It is to understand the path between a buyer clicking on the listing and an offer arriving.

Private listings may trade broad competition for controlled exposure

The senators separately asked the FTC to examine office-exclusive and private listing strategies. These arrangements can keep a property within one brokerage or a limited network rather than exposing it immediately through the broader multiple listing service and major consumer search channels.

Private marketing can serve a legitimate purpose for a seller who prioritizes discretion. A public figure, someone dealing with a sensitive family matter or an owner testing a sale without widespread publicity may knowingly accept a narrower audience. The important word is knowingly.

For most sellers seeking the best available price and terms, limited exposure creates a straightforward risk: fewer buyers can discover the home, fewer agents can bring clients and fewer competing offers may develop. That does not prove a private listing will sell for less. It means the seller has less market evidence that the final offer reflects open competition.

Before accepting an office-exclusive approach, a seller should request a written explanation of where the property will and will not appear, how many qualified buyers are expected to see it, how long the private period will last and what triggers wider distribution. Sellers should also ask whether the brokerage represents prospective buyers within its own network and how conflicts or dual-agency issues will be managed under state law.

A practical comparison is useful: What is the claimed benefit of private marketing, and what buyer reach is being surrendered in exchange? If the answer relies mainly on convenience for the brokerage rather than a clear seller objective, broader exposure may be the more defensible choice.

Sellers should demand disclosure before choosing a marketing plan

The FTC request arrives amid wider federal scrutiny of online real estate competition. The agency previously sued Zillow and Redfin over rental advertising, resulting in a 2026 stipulated order requiring Redfin to return to the online rental market. That case settled in August. Warren has also sought information about Compass-related private listing initiatives and previously raised antitrust concerns about Compass’s acquisition of Anywhere Real Estate.

None of that changes a seller’s obligations today, and the senators’ letter creates no new disclosure rule. The immediate takeaway is simpler: sellers should not assume that every digital lead, lender recommendation or private listing program is neutral.

Before signing a listing agreement, ask the broker to identify affiliated companies, referral fees, lead-generation payments and any financial benefit the brokerage may receive when a buyer uses a related mortgage, title or closing provider. Ask whether the recommended marketing plan maximizes exposure or intentionally restricts it. If exposure is restricted, require a seller-specific reason and a clear timeline for reassessment.

Owners comparing a conventional listing with an off-market sale should measure the trade-offs consistently: expected proceeds, commissions and fees, repair obligations, closing certainty, marketing exposure and time. An instant-offer tool can provide one additional benchmark, but it should be compared with likely open-market proceeds rather than treated as a substitute for understanding the property’s value.

The FTC may decline the senators’ request, seek information informally or begin a broader inquiry. Until its next step is known, sellers can protect their interests by insisting on plain answers about who is being paid, who can see the home and whether the chosen process is designed around the seller’s priorities.