More states move to limit private listings, Illinois and Hawaii step in

"The deeper reality is that states have always had the authority to regulate how real estate is marketed. The constitutional label for this is police powers—the states' broad ability to govern the conduct of licensed professions in the name of consumer protection. And that authority is far more expansive than one may realize."

"For decades, property listings have been de facto regulated by NAR policies, MLS participation and platform syndication. As long as that framework held, states stayed out of it. The Sitzer/Burnett verdict, the NAR settlement and the rise of portal competition changed that calculus entirely."

"When a rule is framed as governing professional conduct, courts defer heavily to state legislatures. Several states have banned buyer-broker commission rebates for years, and courts have repeatedly upheld those restrictions, even while acknowledging they may be anti-consumer or anticompetitive."

Illinois and Hawaii have joined Wisconsin and Washington in enacting legislation to restrict private residential listings. Illinois' HB 4964 requires public marketing within one business day unless sellers opt out, following Wisconsin's model. Hawaii's HB 2559 prohibits marketing to limited groups without concurrent public exposure, mirroring Washington's stricter approach. While industry observers attribute this to competition between Zillow and Compass, the underlying issue reflects states' constitutional police powers to regulate licensed professions for consumer protection. States have historically regulated real estate through NAR policies and MLS participation. Recent developments including the Sitzer/Burnett verdict and NAR settlement have prompted legislatures to exercise their regulatory authority more directly. Courts have consistently upheld state restrictions on real estate practices, even when potentially anticompetitive, when framed as professional conduct governance.

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