A Response to Senators Warren and Booker’s Proposed Federal Trade Commission Investigation of Online Real Estate

Summary

• The senators’ letter asks the Federal Trade Commission (FTC) to investigate three practices: paid agent referrals, mortgage steering, and private listings. These are allegations, not findings, and they deserve careful review.
• Current law shapes the problem. The Real Estate Settlement Procedures Act (RESPA) rewards owning a lender over referring buyers to many, state licensing law blurs lead generation and brokerage, and listing data from multiple listing services (MLSs) generally goes only to licensed brokers.
• We propose three reforms: a clear, disclosed path for agent-referral services; a narrow RESPA safe harbor for platforms that offer many competing lenders; and open listings with fair access to listing data.
• The FTC can act now through market studies, deception guidance, and disclosure testing, while Congress, states, and MLSs take up the structural reforms.

The Senators’ Concerns

On October 15, 2026, Senators Cory Booker and Elizabeth Warren asked Federal Trade Commission Chair Andrew Ferguson to investigate what they call anticompetitive and deceptive practices in online home buying. The letter does not propose legislation, set a deadline, or request a specific remedy. It asks the FTC to use “every enforcement tool available to restore competition to the entire online real estate marketplace” (press release).

The letter names three practices:

1. Agent referrals. A listing’s “Contact Agent” button may connect a buyer with a platform-affiliated agent instead of the listing agent. That agent may then pay part of the commission to the platform, often without the buyer knowing.
2. Mortgage steering. Affiliated agents may be pressured to send buyers to affiliated lenders, which the senators say may offer worse rates or terms without disclosing the referral economics.
3. Private listings. Large brokerages increasingly market homes only to buyers whose agents “pay to play,” which the senators warn can “artificially restrict” visible supply and reduce competition for sellers’ homes.

These are allegations, not findings. Most of the letter’s company examples come from press coverage and litigation, not independent investigation. The letter also follows the FTC’s August 2026 proposed settlement of its antitrust case against a Zillow–Redfin rental-advertising agreement; the order takes effect only once a court enters it. That case involved rentals. The senators want similar scrutiny of the market for homebuyers.

The stakes are real. The letter cites a median first-time buyer age of 40 (National Association of Realtors (NAR), 2025 Profile of Home Buyers and Sellers). For buyers already stretched by prices and rates, a hidden fee or a slightly worse mortgage is repaid over decades.

At Hard Hat Real Estate, we believe consumer protection and competition should reinforce one another. Each concern raises a distinct question:

• Agent referrals: Consumers deserve clear disclosure when platforms are paid to connect them with agents, especially when payment affects who is recommended.
• Mortgage steering: Consumers should be able to compare lenders on rates, fees, and terms without hidden affiliations distorting their choices.
• Private listings: Limits on listing access can reduce transparency and competition and disadvantage buyers and independent agents.

The goal is a market where buyers know whom they are dealing with, what it costs, and what alternatives exist, and where new entrants can compete on the merits.

The Practices and the Current Law

Agent referrals and the “Contact Agent” button

On major portals, the most prominent button on a listing often leads to a paid referral network, not the listing agent. Zillow’s Preferred program (successor to Flex) charges partner agents a success fee after closing of 15% to 40% of the agent’s commission, depending on the market. A local MLS association has published a consumer explainer on what the button actually does.

Federal law is fairly permissive here. RESPA’s implementing rule, Regulation X, allows payments under “cooperative brokerage and referral arrangements or agreements between real estate agents and real estate brokers” (Code of Federal Regulations, 12 C.F.R. § 1024.14(g)(1)(v)). So the “Contact Agent” button is mainly a question of transparency and deception, not RESPA, which puts it squarely within the FTC’s authority.

The real limits come from state licensing law. Most states require referral fees to pass between licensees, and many ban paying them to unlicensed parties. So platforms that are not brokerages either call their fees advertising or get brokerage licenses. The line between lead generation and regulated brokerage is often unclear and varies by state.

Buyer representation is already a two-step process. Under NAR settlement practice changes effective August 17, 2024, MLS participants must have a written buyer agreement before touring a home. It must state compensation in a specific, not open-ended, amount, and buyer-broker compensation offers can no longer appear on the MLS. Contacting an agent and hiring one are separate steps. The gap comes earlier: a buyer may be routed to an agent through a referral deal whose economics are never disclosed.

Affiliated mortgage providers and RESPA Section 8

Federal law is strictest for mortgages. RESPA Section 8 (United States Code, 12 U.S.C. § 2607) has three key parts:

• Section 8(a) bans giving or accepting “any fee, kickback, or thing of value” for referring settlement-service business on a federally related mortgage loan.
• Section 8(b) bans splitting fees except for services actually performed.
• Section 8(c)(2) allows payment for goods or services actually provided.

Regulation X states that “[a]ny referral of a settlement service is not a compensable service” (§ 1024.14(b)).

The main exception is the affiliated business arrangement (§ 1024.15). A referral to an affiliate is allowed only if:

• the consumer gets a written disclosure of the relationship and estimated charges,
• the consumer is not required to use the affiliate, and
• the referrer receives nothing beyond a genuine return on ownership.

Disclosure alone does not make a referral payment lawful. A lender that pays an unaffiliated agent per referred loan violates Section 8 even if the payment is disclosed.

This explains today’s market. Because ownership is the clearest legal way to profit from mortgage referrals, large platforms have bought or built lenders:

• Zillow runs Zillow Home Loans and publishes an affiliated business disclosure.
• Rocket Companies completed its acquisition of Redfin on July 1, 2025. Redfin now markets Rocket Preferred Pricing discounts to buyers who use both a Redfin agent and Rocket Mortgage, while stating the lender is optional.

Whether specific conduct is unlawful steering is disputed. A proposed class action, Taylor v. Zillow (U.S. District Court for the Western District of Washington), alleges RESPA violations tied to pressure on agents to steer buyers to Zillow Home Loans. The court dismissed an earlier complaint in July 2026 with leave to amend; plaintiffs refiled in August, and Zillow’s motion to dismiss is pending. These remain allegations.

Regulatory guidance is also unsettled. In 2020 the Consumer Financial Protection Bureau (CFPB) rescinded its 2015 bulletin on marketing services agreements and replaced it with case-by-case FAQs. In May 2025 it withdrew dozens of guidance documents, but not its 2023 advisory opinion finding that a comparison-shopping platform may violate Section 8 if it favors lenders in exchange for payment. The result: a 1974 statute, read through shifting guidance, applied to platforms Congress never imagined.

Private listings and property-information access

NAR’s Clear Cooperation Policy, adopted in 2019, generally requires a listing to go on the MLS within one business day of public marketing. In March 2025, NAR added “delayed marketing exempt listings,” which, with the seller’s signed informed consent, can be kept off public portals for a period set by the local MLS while staying visible to MLS participants.

The industry has split sharply:

• Compass offers a three-phase strategy: Private Exclusive, then Coming Soon, then full public launch. It completed its merger with Anywhere Real Estate on January 9, 2026.
• Zillow announced Listing Access Standards in April 2025, refusing to show listings that were publicly marketed but not broadly shared. It revised them in March 2026.
• In court, Compass sued Zillow. A federal judge denied a preliminary injunction on February 6, 2026, and Compass dropped the case the next month.

States have started to act:

• Washington’s Senate Bill (SB) 6091, effective June 11, 2026, generally bans marketing a home only to an exclusive group unless it is also marketed publicly.
• Wisconsin (2025 Act 69, effective January 1, 2027) and Connecticut (Public Act 26-23, effective October 1, 2026) adopted public-marketing rules for one- to four-unit homes that let sellers opt out in writing.
• Illinois proposals have stalled.

Less visible barriers to competition involve who controls listing photos and listing data. Photographers usually own photo copyright, and licenses pass from agent to MLS to portal on terms that differ across hundreds of MLSs (NAR). In VHT v. Zillow (U.S. Court of Appeals for the Ninth Circuit, 2019), Zillow could show photos as listings but was liable for reusing them on its home-design site: permission for one use is not permission for another. Access to listing data is narrower still. MLS feeds go only to licensed brokers, so a company building a better search or affordability tool, even one that represents no one, must become a brokerage or find a sponsor. Concerns about accuracy and privacy justify licensing terms, not a license requirement, and the Department of Justice (DOJ) already challenged NAR's restrictions on virtual office websites (VOWs) as anticompetitive in DOJ v. NAR, settled in 2008.

Weighing the Arguments

The case for current restrictions is serious. RESPA bans referral payments because homebuyers are poorly placed to judge a referral’s value. The person recommending knows more, and the cost of a bad mortgage shows up slowly. The CFPB found that almost half of homebuyers seriously considered only one lender. Freddie Mac estimates that when rates are high, borrowers who get a second quote could save up to $600 a year, and those who get four or more could save over $1,200. When buyers rarely shop, steering pays, and strict rules guard against it.

The same logic applies to listings. Sellers who market privately may get fewer offers. Buyers outside a brokerage network may never see some homes for sale. A brokerage that keeps both sides of a deal in-house gains leverage over both parties.

Restrictions also have costs. Rules written for an offline market can protect incumbents:

• Large firms can use the affiliated-business exception by owning lenders. Independent lenders and smaller platforms have no similarly clear path, so the safest legal route favors firms big enough to own every step.
• Licensing laws that don’t separate software and lead generation from brokerage leave new entrants unsure what they can offer or charge for.
• Non-standard photo licensing gives established data holders leverage over new search tools.
• Sellers have valid reasons for discretion, such as privacy, safety, or testing a price, which strict public-marketing mandates may ignore.

The FTC should investigate the senators’ concerns. The longer-term question is how to make conflicts visible, choices real, and markets open to competition.

Hard Hat Real Estate’s Policy Framework

The three recommendations below are Hard Hat Real Estate’s positions. Each answers one of the senators’ concerns, and all share one idea: give consumers accurate information and real choice at each decision point, and let more providers compete for their business.

Disclosure of interest: Hard Hat Real Estate would benefit directly from all three proposals. Proposals 1 and 2 would let platforms like ours be paid, openly, for connecting consumers with agents and lenders. Proposal 3 would give our portal broader access to listings and property information. We have paired each proposal with safeguards strict enough to bind us too.

1. Agent Choice and Licensing Reform

State licensing laws should clearly separate helping buyers find an agent from representing a buyer. In many states, a website that only introduces buyers to agents cannot legally earn a referral fee without a brokerage license, even though it never advises, negotiates, or handles the deal. Lawmakers should create a clear, legal way for these services to be paid, as long as the payment is disclosed and licensing’s consumer protections stay in place.

Why it matters: because the rules are unclear, platforms often call their agent charges “advertising” instead of referral fees. That is a big reason buyers can’t tell what happens when they click “Contact Agent,” or who is paying whom. If the law treated referral services as their own category, these payments could be made openly and disclosed up front, and new companies could compete without becoming full brokerages.

Clear rules should come with clear duties:

• Disclosure at first contact. A platform paid to connect a consumer with an agent should say so plainly before the consumer reaches out, especially when payment affects who is recommended.
• Brokerage stays with licensees. Representation, negotiation, and fiduciary duties remain with licensed professionals. A referral service connects buyers and agents; it represents no one.
• Real agent choice. Platforms should offer public, searchable agent directories so buyers can compare licensing, experience, service area, reviews, and stated fees before choosing.
• Disclosure before commitment. Any platform referral fee and affiliated services should be disclosed before the buyer signs a written buyer agreement, so the decision is fully informed.

2. Mortgage Competition and a RESPA Safe Harbor

Policymakers should modernize RESPA, enacted in 1974, to permit lawful, transparent referral partnerships between digital platforms and mortgage lenders. Clear safeguards should protect consumers from hidden conflicts and steering while making it easier for more lenders to compete on rates and terms.

This takes an act of Congress. Section 8(a) bans payment for referrals, and Regulation X says a referral “is not a compensable service.” Regulators can clarify when payment for marketing or comparison services is allowed under Section 8(c)(2), but they cannot permit what the statute forbids.

Today’s law rewards ownership, not competition. A platform that owns a lender may profit from sending buyers to it. A platform that sends buyers to independent lenders, credit unions, or community banks cannot be paid at all. This pushes platforms toward one in-house lender instead of many competitors. A disclosed referral commission, open to every lender on equal terms, would reward platforms for widening buyers’ options instead of narrowing them.

The safe harbor should apply only if all of these conditions are met:

• Several competing lenders, ranked on rates, fees, and terms, not on who pays, consistent with the CFPB’s 2023 advisory opinion.
• One uniform referral commission: the same capped percentage of the loan amount from every lender, never tied to the interest rate, fees, or loan product, so steering a buyer to a costlier loan earns nothing extra.
• No favoritism for affiliates in placement or terms.
• The buyer chooses a lender before any referral, never by default or as a condition of working with an agent.
• Standard disclosure of the commission and any affiliation before the buyer chooses, and again on the Loan Estimate and Closing Disclosure.
• Agent pay stays separate: an agent’s pay or standing never depends on the client’s lender.
• Full enforcement: CFPB, state attorney general, and private lawsuits remain available, and any payment outside the safe harbor still violates Section 8.

Without these conditions, a safe harbor would legalize the steering the senators describe. With them, it can open a closed system to real competition.

3. Open Listings and Broad Access to Property Information

Hard Hat Real Estate supports broad, nondiscriminatory access to property listings and nonexclusive distribution, while respecting sellers’ informed marketing choices and preventing exclusion.

The market works best when buyers can see what is for sale and sellers can reach every buyer. Our position: public marketing should be the default, with a limited, written opt-out. This builds on the approach Wisconsin and Connecticut adopted. Sellers can have valid reasons for discretion, such as privacy or safety, so a seller may choose private marketing only with:

• the seller’s written, informed consent,
• a plain-language explanation of the possible effect on price and exposure,
• a fixed time limit, after which the home is publicly marketed or withdrawn, and
• compliance with state law and MLS rules.

Private marketing should not be used to shut out buyers or independent agents, or to keep homes permanently inside one brokerage network.

Public access means little if listing content can’t move between platforms. We recommend standardized, nonexclusive licensing so listing photos and property information can be shared across competing platforms. Photographers would keep their copyrights and be fairly paid, and distribution rights would be granted on uniform, fair terms.

Data access should not require a brokerage license. MLSs should offer a licensed data-access category for technology providers that display listings but do not represent buyers or sellers. Access would come on the same uniform, nondiscriminatory terms brokers receive, with conditions that protect accuracy and accountability:

• Accurate, current display, with listing-broker attribution and data refreshed on the same schedule as broker feeds.
• No representation without a license. Advising, negotiating, and showing homes remain with licensed professionals.
• Clear disclosure of who operates the site and how it is paid.
• Fair pay for content creators. Photographers and listing brokers keep their rights and receive standardized compensation.

A license should govern who may represent consumers, not who may write software that helps them see the market.

Together, open listings, standardized licensing, and fair data access would mean:

• Sellers reach the widest audience.
• Buyers see complete information wherever they search.
• Agents no longer juggle conflicting licenses.
• New entrants compete on product quality, not access to data.
• Developers build better search and affordability tools without first becoming brokerages.

How the three proposals fit together

The three reforms cover successive stages of one transaction. Open listings let buyers see the whole market. Agent choice lets them pick who helps them through it. More lenders competing on digital platforms lets them finance on the best terms. All rest on one principle: informed consent at each decision point, and open competition behind it.

What the FTC Can Do Now

Most of our proposals need action by Congress, state legislatures, or MLSs. The FTC does not have to wait for them. Within its current authority, it can:

• Study the market. Under Section 6(b) of the FTC Act, the Commission can require major portals and brokerages to report how their agent referral, lender affiliation, and listing-access arrangements work and what they are paid. A public report would replace anecdotes with evidence.
• Clarify what counts as deception. Using its Section 5 authority over deceptive practices, the FTC can issue guidance on when an unlabeled, paid “Contact Agent” button or an undisclosed referral fee misleads consumers, and enforce against the clearest cases.
• Test disclosures with consumers. Before anyone relies on disclosure, the FTC can test with real homebuyers which wording and placement they actually understand, as it has done for other disclosures.
• Coordinate with other enforcers. The CFPB enforces RESPA for mortgage referrals, and the Department of Justice’s Antitrust Division covers MLS and listing rules. Joint work would keep the investigation from stopping at the edge of any one agency’s authority.

Who can act on each reform

• Agent referral disclosure: FTC (deception guidance and enforcement); state legislatures and real estate commissions (a licensing category for referral services).
• RESPA safe harbor: Congress (amending Section 8); CFPB (rules and examination once Congress acts).
• Public-marketing default: state legislatures; MLSs and NAR (listing rules).
• Listing data access: MLSs (a data-access category for technology providers); DOJ Antitrust Division (oversight of MLS access rules).

About Hard Hat Real Estate

Hard Hat Real Estate is a financial technology and real estate platform in development, built to help consumers save for a down payment, get mortgage financing, connect with real estate professionals, and navigate buying a home. We are building tools for agent discovery, transparent representation agreements, and transaction management; several are not yet broadly available. Our interest is direct: affordability depends on competition at every stage of the purchase, and trust depends on consumers understanding the arrangements behind a platform’s convenience.

Conclusion: A Market Built on Choice

Senators Warren and Booker have raised fair questions, and the FTC should examine them carefully. Enforcement and reform work best together. We support strong enforcement against deceptive and anticompetitive conduct, paired with targeted reforms that expand choice, encourage innovation, and remove needless barriers to competition.

The goal is a digital real estate market where buyers can see who is paid and why, every choice is truly theirs, and the rules don’t quietly favor the firms that already control most of the transaction.

Technology can make buying a home simpler, cheaper, and fairer, or it can hide old conflicts behind a convenient button. Which happens depends on policy choices made now. When consumer protections strengthen competition instead of limiting it, buyers get both: stronger safeguards and more options.

The objective: stronger competition, greater transparency, and more accessible, affordable homeownership.

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This article is for informational and policy-discussion purposes only and does not constitute legal advice. Statements about pending litigation describe allegations and procedural status, not findings. Sources were reviewed as of October 19, 2026.