Why CoStar’s Homes.com/Homesnap GTM might already be DOA

Andrea Brambila for Inman News, CoStar’s Homesnap and Broker Public Portal get a divorce

When real estate juggernaut CoStar acquired real estate tech firm Homesnap for $250 million at the end of 2020, Homesnap said it was committed to its partnership with the Broker Public Portal, a company formed by a large group of brokers and multiple listing services to launch the nation’s first national public-facing MLS website.

But nearly two years later, the two companies are going their separate ways. The National Broker Portal LLC, a joint venture owned 50-50 by the two companies since December 2016, will shut down on Oct. 31.

So much to unpack here in another great exposé by Andrea Brambila. If you haven’t read the whole article, go read it. I have many questions. Like, did MLS orgs and brokers (BPP) get played by Homesnap? Has anyone added up the amount of money Andy Florance has either given up or spent on this residential play so far? But I digress, what I want to focus on now is a glaring flaw I see in CoStar’s strategy with Homes.com.

Agent responsiveness.

Zillow learned this the hard way. When Zillow first launched any agent could buy leads from the company. Then they shifted. To “super agents” and “super teams”. Why? Because agents weren’t responding to leads, this was making Zillow look bad. When Zillow switched to a referral model the scrutiny got even more intense. Not just any agent/broker could buy leads from Zillow you must meet certain criteria in order to be a “Premier Agent”.

Zillow has also initiated a lead incubation program that makes sure every lead is followed up on. Zillow has made considerable investments to make sure that its brand is protected.

Keep in mind, CoStar’s experience with commercial real estate agents. When you call a commercial agent, they pick up the phone. When you email them, they respond quickly. When they show up for an appointment they most likely will be wearing a tie. Compare that experience with a residential real estate agent. The culture is completely different.

I don’t think the fact that leads are going straight to the listing agent is going to make a difference in the level of responsiveness. So if consumers go to Homes.com and ask the agent for more information and they don’t hear back within 30 minutes, they are gone baby gone.

Hopefully, Homes.com/Homesnap has already solved this (and I don’t think the Homesnap app solves this). But, If CoStar doesn’t have a solution for agents not responding to buyer inquiries on Homes.com at launch or shortly after launch all the reported money they will spend on advertising might as well be lit on fire.

You’re welcome.