They are only three months into their mega-launch of Homes.com, and CoStar founder and president Andy Florance is already taking victory laps. He is also the #1 cheerleader for buyers going directly to the listing agent, which will be the end result of all the changes underway. Here’s Andy talking in front of a group of realtors:
Florance said Homes.com’s “Your Listing, Your Lead” model was the antidote to agent and consumer frustrations, as evidenced by triple-digit traffic growth during Q3 2023 that gave them a contested lead on Realtor.com as the second-most-trafficked residential portal.
“In the rest of the world, when an agent has a listing, their name is on the listing, their phone number is on the listing, and there’s branding happening,” he said to riotous applause. “Only in the United States is it the portals’ brand goes on the listing rather than the agents’ brand. That’s bizarre.”
Although CoStar didn’t reveal its exact plans for Matterport, Florance did outline a plan to capitalize on digital twinning, a term used to describe hyper-realistic 3D listing experiences.
Florance said digital twinning could enable homebuyers to visualize what their current home furnishings would look like in a new home, play with renovation options for a fixer-upper, or walk with a virtual agent through a virtual listing.
“In residential focus groups, homebuyers are telling us that they prefer listings that offer 3D digital twins so that they can best understand the property,” he said. “Adding virtual reality to Matterport, you can take a virtual tour of the property with your virtual agent who will walk into the space with you.
Florance spent a few moments of the call focusing on buyer-broker commissions and reiterated Homes.com’s potential value when NAR’s settlement terms go into effect this summer. Florance said Homes.com will give buyers an avenue to directly connect with listing agents to view a home, bypassing the potential pressure to sign a representation agreement before they’re ready.
“Currently only 30 percent of buyer agents ever get a written agreement at any point in the transaction process,” he said. “Homes.com connects homebuyers directly with the listing agent, so they can arrange to see the house with no paperwork or commitments.”
“We are increasingly confident in our ability to build out the number one residential marketplace in terms of traffic revenue and profitability in the years ahead,” he added.
CoStar owns LoopNet, the website for commerical listings, as well asten-x.com/which is an online auction house for commercial properties. It won’t be long before they bring auctions to the residential market, will it?
This is the #1 reason I went to Compass, and I didn’t really feel like I had a choice.
When realtors get disrupted, this is the way the big brokerages can survive while the little guys die.
Hoard the listings in-house as ‘private exclusives’, like they do in the commercial real estate. The practice is legal (per the Clear Cooperation Policy) and is a choice for home sellers to make.
The big benefit for sellers is that they don’t get penalized by the days-on-market statistic, which buyers normally consider as the best way to know if the price is wrong after the first week on the market.
Compass has this option available for sellers, as do all the other brokerages, but nobody in management is pushing it around here. It’s used more like a Coming-Soon feature while homes are being prepared for open-market exposure. But there are deals being made.
If there was an organized, committed effort to use it as a survival tool, then I could see 30% of our sales happening off-market. But we’re not there yet.
The conspiring events – softer market, fewer and less-experienced agents, and lower commissions – are all leading us to the same place:
The destruction of the traditional model of residential real estate sales will be triumphed by the unknowing, but it will be the worst thing to ever happen for consumers because agents will be so tempted to tilt the table.
The only savior will be the company that brings home auctions to the masses.
It’s been obvious that the entire real-estate-selling business has been deteriorating towards single agency. I see it every day on the street, and I’ve posted evidence of the shift regularly.
The trend is moving quickly now on multiple fronts.
The DOJ is going to decouple commissions, which will prohibit sellers from offering to pay the buyer’s agent. The buyers can include it in their offer, but it likely won’t get that far. The buyer-agents who are left will want a written agreement to get paid by the buyer if the seller won’t pay. How many agents will be able to demonstrate why they are worth it? Not many, but maybe the buyers won’t ask too many questions.
Homes.com is spending millions and billions on advertising their website to compete with Zillow. Their twist? They funnel all the leads back to the listing agent, instead of farming them out to the highest bidders like Zillow does. I’ve been called by several phone jockeys from Homes.com to sign up for their enhanced listing packages, and I’ll sign up. Robert Reffkin responded positively to the Homes.com program, and you can see how Gary Keller feels about it above.
Agents are giving up on representing buyers because it’s too hard and doesn’t pay enough. Most of the unsold listings are grossly over-priced and the occasional deal gets multiple offers within minutes. Agents have to spend months or years working with their buyers before they get lucky, only to then get a reduced commission from the listing agent. Now I have to convince the buyer to pay the commission too? Great, thanks.
Listing agents are advertising for buyers to avoid paying the buyer’s-agent commission by coming directly to the listing agent instead. Realtor cannibalization is what we deserve. (link)
This house priced at $1,985,000 in Rancho Penasquitos received 15 offers and likely sold for 15% to 20% over list (an offer that was 12% over with free rentback wasn’t enough).
I remember when $2,000,000 got you a decent house in Carlsbad!
We don’t need the DOJ or commission lawsuits to take down our business – realtors will self-destruct, beginning with the elimination of the buyer-agents as we’ve known them.
A few of the comments below. Click here to see the whole thread.
Any agent could walk around their next listing with their phone’s camera running and comment on what people are seeing and why they should buy the house! The extra audio will be far more effective than any whiz-bang product that comes to market at any price.
It’s inevitable that artificial intelligence will be utilized in the business of selling homes. Having AI assist with writing home descriptions or other advertising would seem to be a natural fit.
How about speaking with clients on the phone though? Listen to the brief conversation above.
Homes.com is making a run at Zillow and all other search portals. They are advertising 100 million users already, and they are displaying the listing agent’s phone number prominently on their properties for sale:
Zillow must have felt the pressure, and they are doing it too, although in a more subtle way because they still want you to contact their call center so they can control – and get paid from – the agent they desire:
This is will probably have more to do with the extinction of the buyer-agent than the lawsuits.
All anybody has to do is spend $100 million per year on advertisng to become a major player like like Zillow did, and homes.com is in a position to do it. Look for the homes.com ads during the Super Bowl!
The gradual phasing out of buyer-agents is underway, and it shouldn’t be long now.
Zillow’s new format features the listing agent’s phone number under the main photo!
The three-headed agent display was removed and now when a reader clicks on the right side for Request a tour or Contact agent, they are linked to the Zillow call center instead. There they get processed/qualified on the phone by Zillow employees, sent to Zillow Mortgage, and then get assigned to an agent who is paying big money to Zillow for the privledge.
Buyers will figure it out pretty quick. By clicking on the right side, you get a 3rd party agent who isn’t the listing agent and has never been to the home. With the listing agent’s phone number now prominently displayed, it is inevitable that buyers will call the listing agent next time.
If they need a prompt, they will get one when they start clicking on the photos – which every viewer does immediately. This is what they will see now:
Yep – the listing agent is in the upper-left corner of every photo!
With the threat of buyers having to pay a buyer-agent a hefty commission out of pocket, it will be irresistible for them to contact the listing agent to see what they have to offer – in hopes of avoiding a separate payment due to a buyer-agent. The listing agents will be happy to oblige because they will already have their full fee packed into the listing side.
By the time the realtor lawsuits get resolved, it will be too late – there won’t be any need for a buyer-agent.
Zillow is offering a full marketing package to listing agents too.
Package Includes:
Listing Placement Boost on Zillow
HD Photography
Aerial Photography
Social Media Reel
3D Tour
“NEW” AI Generated Interactive Floor Plan
Listing Website
Enhanced Listing Agent Branding
Capture New Leads From Your Zillow Profile
The Listing Placement Boost on Zillow?
Listing agents who purchase a marketing package will have their new listings displayed first in the home’s area for seven days – a very nice feature for agents looking to capture buyers for their listings.
While the rest of the industry was grumbling about lawsuits over the last few months, Zillow created a new format that will solve everything. But nobody knows what fee the listing agent charges because it is never disclosed to anyone but the seller – the person who just wants to hurry up and get their money.
Traditional real estate being manipulated by billionaires. Hat tip to Anna for sending this in!
The digital renderings of North Bayshore, a massive proposed development in Mountain View, California, are crowded with glistening buildings and cheerful, animated pedestrians. There’s a lot to show off, including 7,000 new homes, three distinct neighborhoods, and nearly 300,000 square feet of retail and community space. Notably, though, the gleaming images don’t bear any hints of the company behind the whole endeavor: Google.
Companies like Google and Facebook’s parent, Meta, conquered the digital realm a long time ago, setting the ground rules for how we search, interact, and shop online. Not content to stop there, however, these firms are now making huge bids to expand their reach. They want to be landlords, too.
