In the ongoing billion-dollar fight for dominance between portals, one underdog player—backed by one of real estate’s most powerful companies—has leap-frogged ahead of the pack, emphasizing a new philosophy and focused on a much different experience for both consumers and agents.
Homes.com, which was acquired by CoStar in 2020, broke 100 million unique monthly visitors last month, according to a release from the company, propelling it to second place by that metric ahead of major players Redfin and realtor.com®.
Speaking to RISMedia, CoStar CEO Andy Florance credited Homes.com’s growth—a blistering 1,290% year-over-year—to the company’s significant experience acquiring and growing portals in other spaces, including commercial and rentals, along with a starkly different understanding of what both agents and consumers want.
“You see people trying to monetize anything and everything,” Florance says. “And every time you do that, you’re throwing friction in the process…it distracts you from the primary goal, which is helping people sell homes online.”
Although Zillow, Trulia and other consumer-facing platforms have had a huge head start and have dominated the residential portal space since the late 2000s, CoStar—which famously built a proprietary database of commercial properties with painstaking, on-the-ground research—appears to have found a path into the market despite its late arrival.
“We’re one of the most experienced players, and we have a lot of talent across a lot of different portals. So we’ve done this before,” says Florance.
Here in 2023, the fight for dominance in the portal space appears to be growing more intense, as most of the big companies have pivoted toward offering more integration with affiliate services while still focusing on selling leads and advertising to generate revenue.
Florance says Homes.com has instead tried to offer a streamlined user experience and a foundational commitment to “your listing, your lead,” where consumers are connected to the listing agent rather than a selection of buyer agents (who often split their commission with the portal in exchange for the lead).
And Homes.com has not shied away from the implications of this different approach, as lawsuits threaten to upend how buyer agents are compensated. In the release announcing Homes.com’s milestone, the company directly addressed the Burnett/Sitzer class action suit, scheduled to go to trial this month (with the potential for last-minute drama).
“The first-generation real estate portals have been leveraging this threatened buyer-broker commission rule to divert listing leads from all the agents in the market to a small handful of agents who are then required to split their commissions with the portal,” the release said. “Many agents and brokers strongly resent that model.”
Florance clarified that he and the Homes.com team believe that “your listing, your lead” is simply the most “harmonious” way to approach how portals are structured, and are not simply a response—or anticipation—of potential changes to buyer compensation.
“I can’t say that we had foresight enough to know that these lawsuits would emerge,” he says. “But it’s not a big surprise that when a change comes, we’re more sustainable.”
In the release, CoStar explicitly claims that Homes.com’s model “is not negatively impacted by the potential end of the buyer-broker commission rule.”
With trillions of dollars in residential transactions up for grabs, there are many more battles to be fought in the portal wars, as Zillow pushes forward on the “everything app” and Redfin tacks toward a more traditional brokerage model for its agents. But Homes.com appears to have discovered a strong desire for its model, with Florance promising that the platform will continue to add the kinds of experiences that have powered its growth thus far.
“The consumers are super straightforward,” he said. “They want to browse homes in their neighborhood, or in their target neighborhoods, and find the right properties. They want beautiful imagery. They want a fast-performing site. It’s really quite simple.”