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Realtor.com has been around for years, but lately, it’s taken on a much broader presence.
That’s because the company is one of the major players in what’s sometimes called the portal wars. It’s a battle for supremacy among the major consumer-facing home search platforms. Realtor.com is the oldest of the major players and has held steady second place behind rival Zillow for years.
Recently, however, CoStar has aggressively entered the space with its Homes.com brand, a move that has made the competition between the two companies one of the biggest real estate stories of the 2020s.
The portal wars include numerous verbal barbs at trade events, as well as recent lawsuits and complaints filed with the Better Business Bureau. But the end result is that, despite its long history, Realtor.com has never been in the news as often as it is now.
All the attention has also put under the microscope Damian Eales, chief executive of Realtor.com parent company Move, Inc., who has become one of the industry’s most visible leaders since taking the helm in 2023. Eales will be attending the upcoming Inman Connect Las Vegas show this month, and in anticipation of the event, we caught up with him to discuss the portal wars, the market, commission litigation, and more.
The takeaway from the conversation is that Eales believes his company is uniquely positioned in the market to provide agents with higher-quality leads than other portals, and is actively seeking new growth opportunities. Eales also wasn’t too happy with Realtor.com’s main competitor and had some harsh words to say about the ongoing competition.
What follows is a version of that conversation, edited for length and clarity.
Inman: National Advertising Department [of the Better Business Bureau] Tuesday recommends that your competitor Costar stop making some unique visitor statements about their relationship with you. It sounds like Realtor.com is behind the complaint, so please talk to me about why you filed the complaint and your reaction to the findings.
Damian Eales: We are the ones behind the complaints. CoStar made inaccurate, deceptive and misleading statements about Realtor.com. These claims lead to clients, real estate agents in the market giving away money under false pretenses. We think this is wrong.
CoStar has attracted 156 million viewers to Homes.com. That’s how their ads read. What they did was aggregate 17 URLs. From what we understand, unless they can prove it, each URL is counted independently on Google Analytics and then they aggregate those audiences. It’s comparing apples to oranges. We believe this is deceptive and misleading.
We will continue to cultivate high-quality audiences and generate high-quality leads for purchasing agents and listing agents, and we will enable CoStar to win against hyperbolic competition.
Are there any other responses to the National Advertising Division’s denunciation of CoStar?
So far, I haven’t really gone out and said this, so I’ll leave it to you, but frankly, I think their campaign kind of failed. If you look at their Super Bowl campaign, by any independent measure of audience, they fell short of what they claimed to the industry and the market.
Last September, they reached 48 million viewers in September, based on the most generous measure of unique viewers. Even though they spend a lot of money [their ongoing advertising campaign]their audience [then] Reached 40 million. In the intervening months, the number ranged between the mid-20s and 30 million.
In other words, despite the Super Bowl investment, they haven’t surpassed their previous peak.
So on that basis, if they peaked last September, they accomplished less in the Super Bowl, and they’ve regressed since then. Despite the huge investment, the campaign failed.
Why do you think this is the case?
I don’t think consumers who watch the ads really understand what they are trying to say. I think they have purchased a lot of very cheap clicks to their site. Cheap clicks won’t translate into a highly engaged audience, nor into quality leads for your clients. I know real estate agents very well, and I know very well that what annoys them the most is poor quality leads.
At Realtor.com, we place a strong emphasis on cultivating high-intention, high-engagement audiences to generate high-quality leads.
Let me ask you about leads because one of our reporters just spoke to CoStar CEO Andy Florence and he said that your parent company, News Corp., is stealing leads and that your business Pattern is not popular. What is your response to this?
I think this is ridiculous, and the reason why it’s ridiculous is that Americans generally choose to use a buyer’s agent, and people who use a buyer’s agent generally want to use the same buyer’s agent on their next transaction 90% of the time.
One of the great things about the American system is the existence of buyer’s agencies. The concept of independent buyer’s agents is a huge win for consumer advocates in this market. We believe that advocating for and supporting buyer agents to consumers and legislators is a very appropriate outcome for our company. Our clients appreciate this because they understand the value of an independent buyer’s agent.
The other thing I would say is, I think CoStar is trying to position us as only servicing the buy side of the market. That’s completely wrong. We also provide services to listing agents. We have two important products. A major growing part of our revenue is serving listing agents by providing them with our listing agent toolkit and serving home sellers by providing them with true choice in selling, which provides them with a better listing Agent Selection.
The parent company of Realtor.com just filed a lawsuit over data theft. CoStar came out and called it a PR stunt, describing the employees at the center of the case as low-level. Are their descriptions accurate?
Well, obviously we don’t think their description is accurate. Other than that, I won’t make any further comments. What I’m trying to say is, we don’t take this lightly. We have only encountered one similar case in the past ten years. This is telling. We have great respect for the judicial process and we will litigate in court rather than in the media, and that is how CoStar has chosen to conduct things.
Let’s turn our focus to the Antitrust Commission’s proceedings. What consequences might we see from these cases?
I’ve said it before, it’s obvious [Biden] The government hopes to put downward pressure on housing costs. Part of the cost of housing is transaction costs. I do believe that the actions that have been taken – both in terms of the Department of Justice’s influence and the NAR settlement – may put downward pressure on the commission.
I also think there might be some benefits to this in terms of more specialized industries. You know, I don’t think the concept of transferring a buyer’s agency agreement is a bad thing. I think this provides a great opportunity for the buyer’s agent to demonstrate the professionalism of their role.
This may lead to a reduction in the number of real estate agents as it requires a more professional level of service. This is a good thing for the industry.
But I have never heard any statement from the Department of Justice or antitrust attorneys to the effect that we want to lower commissions but at the expense of eliminating consumer protections, particularly buyer representation. No one said that. So I believe common sense will prevail.
What is your view on the market?
We are cautiously optimistic. We don’t think rates will fall significantly or hastily, but clearly we see rates falling over time. We expect home sales to recover as a result.
Likewise, fewer people are in the market for 30-year mortgages with interest rates below 4%. So in a way, the new normal is becoming normal. So we expect life to go on and deals to inevitably happen.
Do you think there will be some relief in the near future regarding affordability?
We forecast house prices to grow moderately over the next 12 months. But it really depends. A lot depends on supply. Obviously, it depends on how much interest rates fall, how open the market is, how much new inventory comes to the market, and how ready people are to trade. But I think from our perspective, we’re only estimating a modest increase in home prices.
Show me what your Connect looks like. What do industry members need to know now? What information would you like to share with them?
I really want to talk about Realtor.com’s strategy. I think we have a completely unique position in the market. The position is that we were born into this industry and have very deep connections to both the MLS and our clients. We are not here to eliminate their intermediaries. We’re not here to be a national MLS. We’re here to find ways to support them to ensure their businesses grow. I think this differentiates us from our main competitors.
One of the ways we do this is by building Quality audience. We’re doing a lot of work in a lot of different ways that I can talk about on stage. Take News Corp Network, for example, which has performed incredibly well over the last 12 months. Next year, you’re going to see more integration with the Fox network and we’ll be able to talk about that.
In addition, we also use a lot of technology. As I told you before, the last thing our clients want is a bad lead, and We know that some of our competitors get a lot of bad leads. So we’re doing a lot of work to invest in technology to make sure we’re nurturing leads. Quality is improved, thereby increasing conversion rates for these leads.
We also want to talk about our work Everything we do is to support the industry, which makes us completely different from any other portal. No one else does it like Realtor.com.
Additionally, we have other ways to unleash growth. AWhile we’re very focused on the core buying and selling part of our business, we’re also investing a lot of time and energy into building new rental partnerships with Zillow. It’s worth noting that our audience plus Zillow’s audience now exceeds Apartments.com’s audience.
From a new homes perspective, our new homes business has grown very significantly over the past 12 months. Today, our partnership with the construction industry is second to none.
So we can talk more about all of that on stage.
Email Jim Dalrymple II
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