In a recent episode of BAM’s Real Word podcast, hosts Byron Lazine and Nicole White discussed an email sent by CoStar Founder and CEO Andy Florance to real estate agents. In the email, Florance addressed rumors and false statements he says were made about Homes.com, a subsidiary of CoStar, by realtor.com Senior Vice President Bob Evans at the NAR NXT opening party in November, calling the comments “a cheap shot to manipulate people’s emotions to smear competitors.”
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Florance defended the company’s business model and did not hold back in his criticism of realtor.com, The Wall Street Journal and their parent company, NewsCorp, for WSJ’s coverage of the NAR lawsuits and their business practices. Calling Homes.com, “the most pro-agent portal in the industry,” Florance also emphasized that Homes.com supports real estate agents, has a better business model and believes in the principle of “your listing, your lead,” while contrasting that with the models of Zillow and realtor.com, which he said are “taking your leads away from you and making billions of dollars selling them off to a small group of your competitors.”
Here is the Florance email in its entirety, as posted on BAM’s website:
Dear Realtors,
I want to thank the thousands of you who visited us at the Homes.com booth at NAR NXT or who experienced our event at the House of Blues with the Goo Goo Dolls. We are proud supporters of all agents and NAR and we were honored to be a part of the conference.
Thousands of you gave us very positive feedback on the new Homes.com because it is built on the principle of Your Listing Your Lead. Your listings are the result of your hard work and good reputation. The leads from your listings should be yours and other portals should not be taking your leads away from you and making billions of dollars selling them off to a small group of your competitors. Home buyers have consistently told us in focus groups that they hate it when they hit the “Contact Agent” button hoping to learn more about a home and get sold off as a lead to any number of agents who then cold call them dozens or hundreds of times. Home buyers prefer Homes.com because when they are interested in a property, they can reach out to the listing agent who knows more about the property than anyone else. Home buyers also told us that we have the best agent directory where they can see and contact all the great buyer or seller agents with experience in their market.
Homes.com is now the fastest growing real estate portal in America. In September we crossed 100 million unique visitors to the site, placing Homes.com above Realtor.com and most of our other competitors. This is good news for real estate agents everywhere. We believe that the millions of leads we are generating by connecting home buyers directly to agents is generating billions of dollars of commissions for those agents.
As I’m sure you have heard, some of our competitors are hurting—their web traffic numbers are down, their revenue is down. In response, they are lashing out, circulating rumors, and at worst making false statements about Homes.com. We heard that at the NAR NXT opening party Bob Evans, a Senior Vice President at Realtor.com, falsely implied that Homes.com was working against real estate agents. At a time when people are understandably anxious about the NAR class action lawsuits, it is a cheap shot to manipulate people’s emotions to smear competitors.
I want to set the record straight. Homes.com is the most pro-agent portal in the industry. To be clear, we are not behind, nor have we supported the plaintiffs in the Sitzer/Burnett trial in any way whatsoever. To suggest otherwise is absurd considering we are defendants in one of the copycat lawsuits.
CoStar Group operates dozens of companies, one of which is an independent commercial real estate news service called CoStar News. Each week that news service publishes thousands of stories, and one is a column featuring the person that week who had the greatest news impact. Two weeks ago, a CoStar News reporter selected Michael Ketchmark, the attorney in the Missouri litigation, as newsmaker of the week. Nothing in the article supported anything Mr. Ketchmark is doing. I first learned of the article last Saturday evening and I had it removed immediately. I understand that the article was viewed by some Realtors as insensitive and poorly timed, and for that I apologize. I take full responsibility. It will not happen again.
But there is something very important that the Senior Vice President of Realtor.com failed to tell you when he falsely pointed a finger at Homes.com. The company that Realtor.com is a part of has been savagely assaulting the National Association of Realtors and Realtors and has in fact voiced clear support for what Mr. Ketchmark has done to NAR, MLS’s, brokerages, and agents in the Sitzer/Burnett trial.
Many people mistakenly believe that Realtor.com is part of NAR. In fact, it is not, it was sold years ago and is now owned by News Corp. The Wall Street Journal and Realtor.com are sister companies. They work together closely. The folks that call the shots for The Wall Street Journal and Realtor.com are one and the same.
The Wall Street Journal has been prolifically writing more than most about the Sitzer/Burnett class action lawsuit and the NAR defeat. They have published article titles such as “Home Sellers Take On the Realtors Cartel”, “Almost No One Pays a 6% Real-Estate Commission-Except Americans”, “The Upending of One of America’s Most Popular Professions”, “The Way You Pay to Buy or Sell a Home is About To Change”, “Jury Finds Realtors Conspired to Keep Commissions High”, “Real-Estate Commissions Could Be the Next Fee on the Chopping Block”, “Realtors Face an Antitrust Reckoning” and more.
These are some quotes from Allysia Finley, a member of the Journal’s Editorial Board, from an opinion piece WSJ wrote about your profession and your association.
“Though it claims to help consumers, it is a cartel that seeks primarily to enrich its members by expanding government control over middle-class Americans’ largest source of wealth: their homes.”
“If the plaintiffs prevail, home buyers and sellers could save $120 billion in fees each year. Half of the country’s real-estate agents who work as buyer brokers might have to find another, more economically productive line of work.”
“Since MLS databases are de facto monopolies, sellers have no choice but to pay inflated commissions to buyer brokers even when they do little or no work.”
“The association’s suggestion that low-income minorities need help is an insult.”
“The Realtors’ rules harm consumers, but the cartel also lobbies for government policies that cost taxpayers.”
Realtor.com’s sister company has even bragged about their aggressive coverage. “The National Association of Realtors has objected to our editorials challenging its anti-competitive business model, but what do you know. On Tuesday, a federal jury found the Realtors liable under U.S. antitrust laws for conspiring to fix prices in the class-action case Burnett v. NAR.” (A Big Legal Defeat for the Realtors, October 31, 2023).
So clearly Realtor.com, its sister and parent companies are actually the ones that are no friends to NAR nor to seller or buyer agents.
I hope in the future we can compete on the merits of our products and not with degrading gossip. We think Homes.com has a better business model, a better user experience, and most importantly a better experience for Realtors. Homes.com provides a unique opportunity for all Realtors, whether they are listing agents who can ensure they are being connected directly to interested buyers, or buyer agents, who want to connect with would-be buyers within their communities.
In closing, despite the NAR lawsuits, I know for certain that Americans will continue to need and value real estate agents when they buy or sell their homes. We look forward to working hand in hand with you, the hard-working Realtors, for years to come. Please feel free to email me with any questions or concerns.
Sincerely,
Andy Florance
CEO & Founder
CoStar Group
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