Where Real Estate Gets Its Dirt

CoStar to purchase Realtor.com?

News Corp in Talks to Sell Real Estate Site For $3 Billion

“Rupert Murdoch’s News Corp. is in talks to sell its Move Inc. online real estate business to CoStar Group Inc.

Move is the parent of Realtor.com and other real estate-related websites. The deal is worth about $3 billion, according to people familiar with the matter, who asked not to be identified because the discussions are private. The sale could be announced within days, one of the people said.”

After CoStar announced at a recent earnings call they had raised $750M for future acquistions Rob and I on our Industry Relations podcast tried to guess what they would scoop up. I thought we had a pretty good guess with Matterport. Matterport had recently bought VHT Studios. So we thought it would give them some killer IP and a network of photographers. Turns out Zillow took the bait and purchased VRX, and CoStar had bigger fish in mind. Although $3 billion isn’t that much money for CoStar, remember they bid $7 billion for CoreLogic.

Brings up a few questions. Will NAR approve? Or do they even have the say? If NAR was cool with handing the reins to Rupert Murdoch, then Andy Florance seems like a Boy Scout.

What about Homes.com? I’ve been wondering when the new website would be launched, and they recently had a big round of layofffs. Maybe Andy realized that it would take a hell of lot more money to get Homes.com (a distant #3) to compete with Zillow than it would take #2, realtor.com. And the whole “your listing, your lead” actually might play better under the realtor.com umbrella.

Your move Nestfully.

Did Zillow just launch the new Homes.com?

Well it certainly looking that way…

Check out today’s press release from Zillow:

New service from ShowingTime+ enables agents to deliver beautiful, dynamic listings with less hassle

“We want to help agents effortlessly deliver standout listings that wow their sellers and help win over potential buyers,” said Cynthia Taylor, vice president of product for ShowingTime+. “Listing Media Services cuts down on the time agents spend preparing a listing so they can focus on the high-touch, high-value work they do as a trusted adviser for their clients.”

Also, check out the Listing Showcase site:

Here’s copy from the Listing Showcase site:

… select agents will receive the keys to a new best-in-class listing display — Listing Showcase.

Until now, online listings all conformed to the same structure. Listing Showcase is a NEW style of listing display that truly differentiates top-tier agents in their market.

Aren’t these two things; better content and new ways to highlight listings, exactly what CoStar was promising with their brand-new Homes.com?

Looks like Zillow just hijacked CoStar’s business model.

Zillow acquires VRX media, includes a national pro photographers network

Zillow Group acquires VRX Media to create national photographer network, elevate listing media through ShowingTime+ brand

“Zillow Group (NASDAQ: Z and ZG) today announced it has closed on the acquisition of VRX Media. This real estate media marketing and services leader is known for its aerial drone photography, virtual staging, 3D tours, high-definition photography and fast-media delivery to clients, which is made possible through the company’s national professional photographer network. Zillow Group will continue to offer VRX Media’s services through the ShowingTime+ software suite.”

Smart, and obviously a move to help Zillow compete against CoStar’s yet-to-be-announced launch of the new Homes.com which is said to offer “listing enhancement” packages.

I had made a prediction on the Industry Relations podcast that CoStar might buy Matterport because Matterport had recently bought VHT Studios which also had a nationwide professional photographers network. I guess Zillow thought it was a good idea too.

CoStar announces re-shuffle and layoffs of 100 employees of HomeSnap/Homes.com

CoStar Group Integrates Homesnap Operations With Homes.Com

“Today, CoStar Group took steps to combine and streamline the operations and functionality of Homes.com and Homesnap. David Mele, who led Homes.com for 7 years prior to its acquisition by CoStar Group in 2021, has been named President of the combined Homes.com and Homesnap organization. The company believes that the combined entity is now better positioned to efficiently achieve its goal of becoming the leading residential real estate portal.”

David Mele (who I hear is well-liked) has mostly been behind the scenes since the acquisition. Well, he is about to get a lot of attention focused on him now.

“Over the course of the next 12 months, CoStar Group expects to increase the net number of employees building Homes.com by 700 after today’s reorganization and headcount reduction of approximately 100 duplicative roles.”

Damn. 100 people. Well, I guess John Mellencamp doesn’t come cheap…

“My listing, my lead is a scam”

Great thread on Twitter from @gregfischer

Click here to read the thread

It seems like everyone chimes in on this thread. Good discussion and I think Greg is spot on with some of his observations (including the one above).

Industry Relations Podcast: CoStar’s Recent Earnings and Transformational Deals

It’s the rise of CoStar! From commercial to residential real estate, shocking Q3 earnings, and antitrust lawsuits, CoStar could be making some transformational deals in the near future that may have a serious impact on the marketplace. In this episode, Rob and Greg discuss Andy Florance’s motivation going into Q4 and what potential deals are on the table for CoStar.

Watch us on YouTube! Don’t forget to subscribe and smash that like button!

Connect with Rob and Greg: 

Rob’s Website

Greg’s Website

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This podcast is produced by Two Brothers Creative

Now that CoStar is a broker, is their way of “hijacking” IDX listings better than everyone else? You be the judge.

In an interview with Brad Inman, Andy Florance, CEO of CoStar said Zillow was “hijacking” listings and also compared them to the Mafia. His analogy was as follows:

“An agent puts up a yard sign, and then another company pulls up, spray paints over the sign, and puts a new agent’s name on the sign. Florance said no one would tolerate such behavior in the real world.”

Here’s what I’m picturing from Andy’s description.

In a recent post about the divorce of Homesnap and BPP Homesnap’s co-founder Steve Barnes stated…

“Homes.com and Homesnap.com will also offer paid preferred placement for listings in search results.”

Would this be tolerated in the “real world”?

Why CoStar’s Homes.com/Homesnap GTM might already be DOA

Andrea Brambila for Inman News, CoStar’s Homesnap and Broker Public Portal get a divorce

When real estate juggernaut CoStar acquired real estate tech firm Homesnap for $250 million at the end of 2020, Homesnap said it was committed to its partnership with the Broker Public Portal, a company formed by a large group of brokers and multiple listing services to launch the nation’s first national public-facing MLS website.

But nearly two years later, the two companies are going their separate ways. The National Broker Portal LLC, a joint venture owned 50-50 by the two companies since December 2016, will shut down on Oct. 31.

So much to unpack here in another great exposé by Andrea Brambila. If you haven’t read the whole article, go read it. I have many questions. Like, did MLS orgs and brokers (BPP) get played by Homesnap? Has anyone added up the amount of money Andy Florance has either given up or spent on this residential play so far? But I digress, what I want to focus on now is a glaring flaw I see in CoStar’s strategy with Homes.com.

Agent responsiveness.

Zillow learned this the hard way. When Zillow first launched any agent could buy leads from the company. Then they shifted. To “super agents” and “super teams”. Why? Because agents weren’t responding to leads, this was making Zillow look bad. When Zillow switched to a referral model the scrutiny got even more intense. Not just any agent/broker could buy leads from Zillow you must meet certain criteria in order to be a “Premier Agent”.

Zillow has also initiated a lead incubation program that makes sure every lead is followed up on. Zillow has made considerable investments to make sure that its brand is protected.

Keep in mind, CoStar’s experience with commercial real estate agents. When you call a commercial agent, they pick up the phone. When you email them, they respond quickly. When they show up for an appointment they most likely will be wearing a tie. Compare that experience with a residential real estate agent. The culture is completely different.

I don’t think the fact that leads are going straight to the listing agent is going to make a difference in the level of responsiveness. So if consumers go to Homes.com and ask the agent for more information and they don’t hear back within 30 minutes, they are gone baby gone.

Hopefully, Homes.com/Homesnap has already solved this (and I don’t think the Homesnap app solves this). But, If CoStar doesn’t have a solution for agents not responding to buyer inquiries on Homes.com at launch or shortly after launch all the reported money they will spend on advertising might as well be lit on fire.

You’re welcome.

NEW – Industry Relations Episode – Possible Future of Online Real Estate

This week on Industry Relations, Rob and Greg go head to head on MLS data. They debate whether the MLS industry will die with Zillow when Rob’s proverbial asteroid hits. Greg disagrees and wants to see a future between MLS and CoStar.

Enjoy this episode on your favorite podcast player.

And/or please subscribe to our YouTube channel today so we can be known as simply Industry Relations Podcast, and not: https://www.youtube.com/channel/UCrUi4dF6sAOpacTSkemskkw

Or just listen here:

About that CoStar article…

Inside the mass exodus at CoStar, real estate’s biggest data firm, where 29 current and former staffers say the company surveilled and humiliated them

“Last April, an executive at the real-estate data powerhouse CoStar held a video meeting to discuss the lingering difficulties of integrating a rival firm it had purchased two years earlier.

“You’re doing a shit job,” Lisa Ruggles, a senior vice president of global analytics, research, and news, told dozens of employees on the call, according to a manager who attended the meeting and still works for CoStar. Another former manager at CoStar who was on the call backed up this person’s account.

Ruggles, who is widely considered the second-in-command to the company’s president and CEO, Andrew Florance, went on to suggest that employees had been working in bed and lounging in their pajamas all day.

Business Insider – PAYWALL

I think there are a lot of things wrong with this article. You don’t know how wide-spread these issues are, they might just be a few dis-gruntled employees. Although I did check, and their Glassdoor score is super low.

But, the main thing I walked away with are reading this article is that it makes Andy Florance look like a kook.

I think one big thing Mr. Florance and others need to understand is this: They are not coming back. I’ll say it again, they are not coming back. If your work environment doesn’t allow WFH, you are going to lose, period.

With the business model I heard previewed in Scottsdale and their stock price taking a beating, they might want to re-think hiring a music act for next year’s NAR Annual Conference.

They should think about hiring a magician.

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