Homes.com gunning for top spot in the portal race
CoStar’s Andy Florance shared his vision and plans for Homes.com, which he said offers "a superior consumer experience" and is "better aligned" with agents.
- During the company's Q4 earnings call, Florance disclosed that CoStar would not be acquiring Realtor.com.
- Instead, Florance touted the features of Homes.com, which he claimed is seeing a strong increase in traffic.
- He described the consumer experience on other leading portals as "remarkably awful."
Andy Florance, CEO of the CoStar Group, conquered the commercial space. His sights are now set on dethroning Zillow as the top residential real estate site with upstart Homes.com.
During CoStar's Q4 earnings call last week, Florance disclosed that the company would not acquire Realtor.com, the No. 2 most-visited residential listings portal, after discussions of a potential deal surfaced in late January.
Florance told investors he is positioning Homes.com — which had just 22 million visits in December — to vie against Zillow and Realtor.com and become the top home-buying website on the planet.
Florance made the claim that Homes.com is seeing a strong increase in traffic while visits to Zillow and other leading sites have stalled. The number of visits to Zillow in December topped 300 million, while visits to Realtor.com, Zillow's nearest competitor, were more than 124 million.
"Andy Florance has made a bet with his company and his board that [residential] is their next big ground for valuation improvement," since CoStar's takeover of the commercial space and the purchase and expansion of Apartments.com, said Russ Cofano, CEO of Collabra Technology and former SVP at Move Inc., the parent company of Realtor.com.
"But this venture is more audacious because of the organized competition," Cofano said.
Florance lauded the growth of Apartments.com during the recent earnings call, saying the website had its "highest sales quarter ever" in Q4 2022, topping its previous record from 2020. CoStar has increased the Apartments.com sales force by nearly 300.
Florance also detailed his vision for Homes.com, which he believes can serve the interests of consumers and agents in ways that other residential listings sites do not.
"I've used some of these competing sites myself and submitted leads on properties I'm interested in. The experience is remarkably awful," Florance said. "The moment you submit a lead and for months afterwards, you're bombarded with cold calls from countless agents who have questionable qualifications."
He said the agent experience is also lacking. "The competing models use all the agents' listings in a market to funnel monetize leads to just a very small percentage of agents."
Florance also made the case that there is plenty of opportunity to provide a more seamless online set of tools for agents while cultivating a residential real estate space for consumers serious about buying and selling homes. "While other sites are injecting their agents into the homebuyers' search experience somewhat awkwardly, we offer a friction-free environment connecting buyers directly to the listing agents," he told investors.
Consumers can collaborate with their agent directly using the Homes.com platform. "Our agent collaboration tools are up and running. We've had tremendous feedback from both agents and consumers," Florance said.
"We're presenting consumers with hundreds of thousands of highly qualified potential buyer agents for free based upon those buyer agent skills and experiences rather based on how much the buyer agent is willing to give up in commission to the portal," Florance said. He predicted that the company will start monetizing the site later this year.
"Not only do we believe we offer a superior consumer experience for buyers, we also believe we are much better aligned with real estate agents," Florance said.