Homesnap (owned by the U.S. real estate giant CoStar) and the agent-backed Broker Public Portal will no longer collaborate to build a national portal site to compete with Zillow.
The two parties had been trying to negotiate updated joint-venture terms ever since Homesnap was bought out by CoStar in 2020. Unable to reach an agreement, the two have parted ways according to a letter sent to MLSs around the country seen by U.S. agent publication Inman.com.
The Broker Public Portal (BPP) is a company set up by a group of agents in 2014 with the intention of creating what they saw as a fairer alternative to third-party listing portals like Zillow.
In 2016 Homesnap signed an agreement with the BPP to basically become the consumer-facing side of the BPP's project. The partnership helped make Homesnap's agent-facing software tools (Homesnap Pro) popular among agents by integrating them as part of the subscription fee for many MLSs.
When CoStar took over his company in 2020, Homesnap CEO John Mazur went on record to state that the new owners were still committed to the BPP project saying that it was "something we’re committed to, and in the case of CoStar, it’s definitely something they love and are committed to."
CoStar is the leading player in U.S. commercial real estate and is building its own residential offering to rival Zillow. That offering includes Homes.com, which is to be the main consumer-facing brand, and Homesnap.
The Virginia-based company has had designs on Zillow's residential crown for some time and since buying out Homesnap, CEO Andy Florance has been outspoken in his criticism of Zillow's practice of allowing competing agents to advertise on a rival’s listing.
Since acquiring the Homes.com domain in the spring of 2021, CoStar has included a 'Residential' segment in its quarterly reporting with the segment generating over $20 million in revenue in the latest set of results.
Homes.com is set to be launched nationally accompanied by a large consumer marketing campaign before the NAR's annual conference in November. Instead of selling leads to the highest bidder or feeding them through its own referral network as Zillow does, CoStar plans to operate Homes.com as a traditional real estate portal where agents pay for prominent placement in search results.
Instead of getting national listings through the agreement with the BPP, CoStar is now said to be taking a leaf out of Zillow's playbook and joining regional MLSs via its commercial real estate subsidiary Ten-X which has a licensed brokerage arm. Both Homes.com and Homesnap will become national IDX-powered portals in this way.
Unlike in most other countries where the rights to display listings are exclusive to the listing agent, in the U.S. all members of an MLS have the right to display all other members' listings.
While losing the backing of an industry-led initiative like the BPP may mean some slight reputational damage among the agents it's trying to woo, CoStar isn't known for letting PR hiccups dent its plans.
The fact that agents are so fed up with Zillow selling leads on the back of its listings may see CoStar's new residential venture broadly welcomed. However, there have been mutterings from commercial real estate agents (an industry that CoStar already dominates) that the newly minted S&P 500 firm is far from a benevolent saviour when it comes to making money from agents.
The agreement with the BPP was never critical for the Homes.com project as the dynamics of the U.S. market and the MLS system mean that the new portal can always source listings through other means. As with any portal looking to challenge an entrenched incumbent, the big question surrounding CoStar's challenge will be whether it can attract consumers.
American consumers can expect to see plenty of marketing for Homes.com as CoStar deploys its war chest later this year...