CoStar Group purchased HomeSnap and The Broker Public Portal late last year and this created all sorts of speculation.
It is obviously a company to watch and was the first interview, by Brad himself, at the first Inman Connect of 2021.
CoStar has a lot of money and talent, and it has become the Industry topic of conversation since it purchased HomeSnap and the Broker Public Portal late last year.
CoStar Group CEO, Andy Florance's comments and answers to questions were fascinating and for me, instructive. It was heavy on Zillow to start, which shows how dominant Zillow is.
Comments from the Interview (in my words). Read each one of these comments as a stand alone comment:
Real estate is a 180 Trillion Dollar Asset Class and 100 Trillion is residential real estate.
Brad asked if Andy sees Zillow as a competitor. Andy said that CoStar is not out to compete with Zillow.
"The residential agent is Zillow's competitor. CoStar is not Zillow's competitor.
CoStar supports existing agent relationships with clients, instead of working to "uberize" agents.
On the Demand Side, Zillow controls all of the homebuyers (85% of the home buyers going to its site). It controls the "top of the funnel for buyers. Zillow traps you. No agent phone number...no way out.
If you have not been to the Zillow site since it announced it is now a broker and joining MLSs and will take IDX contracts for data, as opposed to syndication contracts for data, you should go explore. Premier Agents are becoming Professional Guides.
Zillow CEO, Rich Barton, was also the founder of Expedia and his efforts in the travel industry did not turn out too well for travel agents. There is a shifting of more business to fewer agents. Zillow represents the "Uberization" of the real estate industry, and Uber drivers make about $50,000 a year.
CoStar's strategy is, "without a doubt," a 180 degrees different from what anyone else has been doing.
CoStar has a simple and different strategy. Existing portals are focused on capturing part of the residential agent commission base. You pay a fee to receive a lead from Zillow, or REALTOR dot com.
IBuying is reducing a potential seller commission.
Portal business models have become Commission Interrupters, monetizing the Agent Relationship.
CoStar's focus is to help the selling agent sell the homeowner's home. Leveraging the Internet and all of the tools available on the Interent. The agent is the second mission.
CoStar is your friend.
"Your listing your lead" was mentioned.
After the announcement of the CoStar purchase of HomeSnap, Andy's LinkedIn "lit up." Lots of people want an alternative to the present model it seems, and to say that they are passionate about how they want an alternative model, is an understatement.
CoStar's goal is to "Sell the home instead of monetizing the agent."
CoStar purchased the domain Houses dot com (for a song according to Andy) and will serve as a destination portal, such as loop net does for commercial real estate.
HomeSnap is an agent tool.
One of the most interesting phrases from the interview:
"A difference without a distinction."
