Homes.com fires back over traffic claims, buyer agency and trust
Dave Mele, president of Homes.com, previewed his company’s monetization plans and responded to criticisms and allegations from competitors.
- Mele said competitors’ business models are “punitive” to agents and “give the industry a bad name.”
- Homes.com plans to introduce a membership program next year, which “could be under $300 for agents.”
- Mele also responded to criticisms of Homes.com’s “fake agents” advertising, and clarified the company’s position on buyer agency and dual agency.
Homes.com made a splash at this year's NAR NXT conference in Anaheim. The CoStar-owned search portal sponsored shuttle buses, plastered ads and banners throughout the convention center, and held the largest space within the exhibition hall.
Dave Mele, president of Homes.com, said the company didn't "have anything to sell yet" to agents at the expo, but plans to roll out a new membership program at the end of Q1.
In an interview with Real Estate News, Mele also discussed Homes.com's monetization plan — which does not include selling buyer leads — the site's astronomical growth, and the increasingly fierce competition for consumer and agent trust. This interview has been edited for length and clarity.
The phrase 'Game On' was prominent in your advertising at the convention. What does 'game on' mean to Homes.com?
Game on means that we are in the game, competing to help agents win. It also means that we're changing the game.
There has been this established hierarchy from Zillow, Realtor, Redfin and their business model, which takes listings from 100% of listing agents, then feeds them to 1-3% of agents and takes 30-40% of the commission as a referral fee. It's punitive, and agents are very frustrated with it.
We're challenging the established structure and established business models. We think what's happening today is wrong, and it's giving the industry a bad name and it's not serving Realtors well. And it's really not serving consumers who click the "contact agent" button and enter a spam zone. They literally get blitzed. So, "game on."
Can you tell us more about the upcoming products from Homes.com?
We're going to roll out what we're gonna call a membership or a subscription model. We haven't released the price point yet, but it could be under $300 for agents. Everything will be free for consumers. Agents are already getting free leads and will continue to get free leads, but we're asking, what can we do to help boost their listings so they get more exposure? We know that exposure and frequency lead to more leads.
So they'll be seen more and have a greater chance for a consumer to click through and a greater chance to generate leads. We'll also move member agents to the top of the agent directory. We think of our model as two things: promoted listings and promoted agent profiles. And that's what we do on Apartments.com and Loopnet.
A Realtor.com exec suggested to NAR committee meeting attendees that Homes.com was against buy-side agents. What's your response?
We were surprised. But if you look behind that statement, and others like it, it certainly looks like desperation. I think Realtor.com is feeling threatened; they have seen us pass them in traffic and they are lashing out. What did we announce in our earnings? Record growth and traffic, and that we just passed Redfin and Realtor with 100 million unique visitors. And what did they announce? Double-digit declines in traffic and double-digit declines in revenue.
It's 100% inaccurate that we are against buy-side agency and representation. We firmly believe in buyer agent representation and we have promoted that across the site in multiple ways. And if a buyer is already working with you, you become the only agent that consumer will see across Homes.com.
There was also concern about CoStar News featuring the Sitzer/Burnett plaintiffs' lawyer as 'Person of the Week.' What was the intention behind that feature?
The "person of the week" feature has been in place for years, and it's produced by an independent news organization within CoStar. Unfortunately, when you see the headline and the picture of the plaintiffs' attorney, it looks like an endorsement or a celebration, and it was neither.
Competitors have said that Homes.com is buying traffic, but it's 'low-intent' — people who aren't trying to buy a house.
What else did those consumers think they were doing coming to Homes.com? It's not like we're giving Airpods away. It's traffic. They all buy traffic: Zillow buys traffic, Realtor.com buys traffic.
Zillow has 220 million unique visitors, they report. That's high intent? 220 million people actively looking to buy a home? You're deceiving consumers by saying "contact agent" and then selling them off to somebody who has never set foot in Napa. Who is actually delivering a trustworthy experience? Consumers are ultimately going to decide.
Some people have taken issue with Homes.com using the term 'fake agents' in marketing materials, suggesting that it belittles buyer agents.
It belittles our competitors' business model. We're making it really clear who the listing agent is because that's what the consumer wants. The "contact agent" button on some other sites is what's fake. When we say "fake agent," we're saying that they're making a fake claim, as you're not contacting the listing agent. So we do not mean to disparage agents, and if that's how it's being received, we'll look at actually changing that language.
'Your listing, your lead' appears to have implications for dual agency. Is that something Homes.com supports?
We get that question a lot. But what are the odds that the consumer who's looking at this home is gonna buy this home? I think it's really low. Because this consumer is looking at dozens of homes right now. We're not trying to give a listing agent dual agency. We're trying to give the consumer a direct line to get their questions answered. So we are not promoting dual agency. We actually want you to find an agent.
Again, we believe in consumer choice. If a consumer wants to be unrepresented, and not have to pay on a buy side, that's their choice. Will we help that consumer out? Sure. We're not trying to make dual agency happen though.