Unless you've been living under a rock, you've probably seen a flurry of television commercials for Homes.com. This brand is the new flagship of the CoStar Group (headquartered in Washington, D.C.) which includes other familiar names like Apartments.com, Land.com and OnTheMarket among others.
Homes.com has committed $1 billion dollars to advertising in hopes of knocking off Zillow as the premier consumer destination for home buyers. Personally, I don't think the ad campaign, featuring comedians Dan Levy and Heidi Gardner are that great. They're trying to communicate the fact that Homes.com made a huge investment to create local neighborhood reviews and video for nearly the entire US. The content is actually pretty good. Homes.com leveraged a nationwide network of photographers, blog writers and even drone pilots to create a compelling resource for consumers. For agents who have adopted the strategy of creating neighborhood reviews on their own website, Homes.com has set a pretty high bar. Check out the content available for Downtown Leesburg. It's not bad.
A Realtor client of mine recently invited me to sit in on a Homes.com sales pitch. Here's what we learned.
We were connected via Zoom to a young and enthusiastic sales guy at Homes.com. He had obviously been heavily trained in giving the pitch. I got the feeling he wasn't allowed to deviate much from the script. His highly practiced talking points included:
Zillow is the enemy. Any Realtors spending money with Zillow are funding an entity whose intent is to put them out of business. Zillow offers crappy leads which are often resold to multiple agents. I found myself heartily agreeing with this plank in the platform.
Homes.com is the Realtor-friendly platform. The will not adopt any of Zillow or Redfin's predatory practices.
Homes.com is committed to becoming the number one destination for consumers who are in-market for real estate. They've invested heavily in building a great website with features like neighborhood reviews AND the most comprehensive and informative index of Realtors. I've already noted that I'm impressed with their local content. I'm also a fan of their Realtor profiles. One of the most interesting features is the transaction history they make available, which includes 1, 2 and 5 year views:
Homes.com is within striking distance of overtaking Zillow. They already claim to be bigger than Realtor.com and Redfin. We were shown a chart that showed Zillow's monthly website traffic falling while Homes.com is growing. Projecting out the trend, they believe it is inevitable that Homes.com will be bigger than Zillow within the next 6-18 months. I'm not sure whether or not we should take their word for it, but on a quick scan the data seemed credible to me.
It took a long time for the Homes.com salesperson to present all of this information. Frankly, we wouldn't have taken the meeting if we didn't already know and believe most of the pitch. We really just wanted to see what the business model looks like and hear about pricing. Finally, in the last 5 minutes of the hour-long pitch, we finally got the numbers.
The Homes.com offering for Realtors is packaged as a membership. As a paying member, you get the following benefits:
Premium placement of your agent profile in markets that you serve, not dissimilar to Zillow. However there is none of the limited exclusivity in this model that you find on Zillow -- at least not year. I do think Homes.com will suffer from the same problems that Zillow and Google's Local Services Ads face --- they're going to be oversold. There will be so many premium agents in any given market that the value of premium placement will be severely diluted. I wish I had challenged the rep on this a bit more. But he did offer that in crowded markets there would be equitable rotation of premium placements so at least the system would be fair. Long term though, this is going to be problematic. The cool spin that Homes.com puts on these premium placements is that based on the agent's transaction history, they already know the areas and markets your in. All of your transactions are already plotted on a map:
Exclusive branding for previous customers. Again, I wish I had drilled down on exactly how this works. But the claim is that buyers or sellers you have previously worked with with automatically ONLY see your face when browsing Homes.com. That's pretty impressive and seems incredibly valuable if true. I can't imagine exactly how that agent-client matching happens. Perhaps that's only for relationships that happen on Homes.com and/or I know consumers can choose a specific Realtor as their main contact. This seems like great insurance against loosing repeat business.
Free Matterport tours. Earlier this year CoStar acquired Matterport. Now, personally I have never loved Matterport tours. They're clunky and cause low-grade motion sickness, but I do think sellers value them. Homes.com is giving them away for free to members. If you've have made a habit of buying Matterport tours, this benefit probably justifies the entire cost of your Homes.com subscription.
Remarketing of listings. Just a quick reminder of what remarketing is. Basically it's that experience when you search online for something like "red shoes" and wherever you go on the internet for the next month, you see ads for red shoes everywhere. What has happened is the advertiser has dropped a cookie on your browser and now you can be targeted with very specific ads. In this case, when a consumer interacts with a listing. They will be retargeted with ads for that specific home, across the internet on sites like ESPN.com, Weather Channel, Washington Post and thousands of other sites and mobile apps. Depending on how much budget Homes.com puts behind these remarketing campaigns, this is potentially a very powerful tool for Realtors. This gives Realtors a new and better claim than "I posted your listing to Instagram and Facebook". Homes.com offers really nice reporting on how many incremental views they bring to your listings -- great ammunition for listing agents who want to demonstrate their value to sellers.
So How Much Does it Cost?
There's only one level of membership, no Gold, Silver, Bronze packages. The "standard" pricing was presented as around $650/month for 6 months or $600/month for 12 months. Of course my client was offered a special limited-time, introductory discount of $490/month for 6 months or $450/month for 12 months.
Should You Buy In?
In my professional opinion as a digital marketer with special expertise in the real estate vertical, I think it's a very interesting offer. The utility of the Homes.com portal for consumers, the Realtor-friendly business model and the powerful marketing capabilities of the platform sound like a good deal to me. I would strongly recommend Homes.com over Zillow.
But in general, I think this platform requires limited effort on the part of the Realtor (e.g. no learning to dance for TikTok videos, no need to create Reels for FB & IG). And importantly adds valuable marketing capabilities that would be expensive to reproduce one agent at a time.
Given the newness of the platform, I think there's an opportunity to get in early and beat the crowd. If I were an agent, I would definitely be doing a 6 month trial.
Did My Client Buy?
Yeah she did. I think she was impressed by the platform and the offer. Coupled with my positive review, she signed up for a 6 month trial. I encouraged her to negotiate and she was able to get the 12 month rate for a 6 month buy.
That client called me a couple of days later to report that she'd gotten her first new client from Homes.com. She was really excited.
Go With Caution
Homes.com and parent CoStar have massive ambitions and exceedingly deep pockets to fund them. That level of ambition often turns into greed and/or the need to meet the ever-increasing expectations of Wall Street. Should they knock off Zillow and become the number one consumer destination for real estate, prices will certainly rise and Realtor-friendly policies will erode.
But for the moment, I feel like there's good potential value and I am encouraging my Realtor-clients to test the waters.
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