Key facts
- Senators Warren and Booker urged the FTC to investigate online real estate practices.
- Concerns include undisclosed referral fees and steering buyers to affiliated lenders.
- Private listing networks are also highlighted as potentially distorting the market.
- The senators argue these practices contribute to the housing affordability crisis.
- Zillow stated it agrees that too many Americans are locked out of homeownership.
U.S. Senators Elizabeth Warren and Cory Booker have sent a letter to Federal Trade Commission (FTC) Chair Andrew Ferguson, urging an investigation into "deceptive practices in the online real estate marketplace." The senators argue that dominant digital real estate platforms and large brokerages are leveraging their market power to increase fees, commissions, and borrowing costs for buyers while reducing transparency in how homes and mortgage referrals are marketed. They specifically point to "contact agent" buttons on listing platforms that may route inquiries to platform-affiliated agents who share commissions with the platform, often without buyer disclosure. Additionally, the senators allege that agents are pressured to steer buyers toward affiliated mortgage lenders with higher rates and less favorable terms, referencing concerns about compliance with the Real Estate Settlement Procedures Act (RESPA). The letter also highlights the use of private or "office exclusive" listings by large firms like Compass International Holdings, which they contend distorts local markets by limiting inventory visibility. The senators argue these combined practices lead to higher costs for homebuyers, often financed into mortgages, compounding over time. They frame these concerns within the context of ongoing housing affordability pressures, citing data that the national median existing-home price is about $440,600 and the median monthly mortgage payment consumes roughly a quarter of median income, with the median age for first-time buyers at an all-time high of 40.