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Realtor.com has been around for years, but lately, it has been around a lot more.
That’s because the company is one of the main players in what is sometimes called the portal wars. It’s a struggle between the main consumer-facing home search platforms for supremacy. Realtor.com is the oldest of the major players, and for many years comfortably held the second place spot after rival Zillow.
More recently, however, CoStar has been aggressively pushing into the space with its Homes.com brand, and that push has helped make the competition between the companies one of the biggest real estate stories of the 2020s.
The portal wars have included many verbal barbs at trade events, and more recently, lawsuits and complaints to the Better Business Bureau. But the end result is that when it comes to Realtor.com, despite its long history, it has arguably never been in the news more.
All the attention has also put Damian Eales — CEO of Realtor.com parent Move, Inc. — under the microscope, and since taking the reins at the company in 2023 he has become one of the industry’s most visible leaders. Eales will make an appearance at the upcoming Inman Connect Las Vegas this month, and in anticipation of that event we caught up with him to talk about the portal wars, the market, commission lawsuits and more.
The takeaway from this conversation is that Eales believes his company has a unique position in the market, provides higher quality leads to agents than other portals, and is actively working on new growth opportunities. Eales is also less than impressed with Realtor.com’s chief rival — and had some pointed words about the ongoing competition.
What follows is a version of that conversation that has been edited for length and clarity.
Inman: The National Advertising Division [of the Better Business Bureau] on Tuesday recommended that your rival Costar stop making some unique visitor claims, including about their relationship to you. It sounds like Realtor.com was behind the complaint, so talk to me about why you made it and what your reaction to this finding was.
Damian Eales: We were behind the complaint. It was CoStar making deceptive and misleading claims against Realtor.com that were inaccurate. And those claims cause customers in the market, Realtors, to part with money on false pretenses. We don’t think that’s right.
CoStar has been calling out an audience of 156 million for Homes.com. That’s how their ad read. And what they were doing in that was aggregating 17 URLs. As far as we understand, unless they can demonstrate otherwise, every one of those URLs is being calculated independently on Google Analytics, and then they’re aggregating that audience. It’s comparing apples with oranges. We think that’s deceptive and misleading.
We’ll continue to generate a high-quality audience that generates high-quality leads for both buying agents and listing agents, and we’ll let CoStar win in the competition for exaggeration.
Any other response to the National Advertising Division’s censure of CoStar?
I haven’t really gone out there and said this as of yet, so I’ll give it to you, but I think that their campaign, quite frankly, has been somewhat of a flop. If you look at their Super Bowl campaign, on any independent measure of audience, they have not achieved the objective that they’ve claimed to the industry and to the market.
In September of last year, on the most generous independent measure of their audience, they hit an audience of 48 million in September. Despite the extraordinary money that they are spending on [their ongoing advertising campaign], their audience [then] hit 40 million. In the months intervening, it was in the 20s and 30 million.
In other words, despite that Super Bowl investment, they did not exceed their previous peak.
So on that basis, if they peaked in last September, they achieved less with the Super Bowl, and they’ve gone backwards since then. Despite that extraordinary investment, the campaign has failed.
Why do you think that could be?
I don’t think consumers who view their ads really understand what they’re trying to say. And I think that they’ve bought a whole lot of very inexpensive, cheap clicks to their site. And cheap clicks do not convert into a highly engaged audience, nor do they convert into quality leads for their customers. I know Realtors really well, and I know full well that the thing that irks them most is poor-quality leads.
At Realtor.com we are very focused on generating a high-intent, highly engaged audience that is going to generate high-quality leads.
Let me ask you about leads, because one of our reporters just talked to CoStar CEO Andy Florence, and he said News Corp, your parent company, is stealing leads and that your business model is unpopular. How do you respond to that?
I think it’s preposterous, and the reason it’s preposterous is because Americans typically choose to use a buyer agent, and those who use a buyer agent typically want to use the same buyer agent in 90 percent of occasions for their next transaction.
One of the great things about the American system is that buyer agency exists. The concept of independent buyer agency has been a great win for consumer advocates in this market. And we think that advocating and supporting buyer agents to consumers and to lawmakers is a very appropriate outcome for our company. Our customers appreciate it because they understand the value of independent buyer agency.
The other thing I would say is that I think CoStar tries to position us as if we only service the buyer side of the market. That’s completely false. We also service listing agents. We have two significant products. A major growth component of our revenue is servicing listing agents by providing them with our listing agent toolkit, and servicing homesellers by offering them Real Choice Selling, which offers them a choice of listing agents.
Realtor.com’s parent company just filed a lawsuit over data theft. CoStar has come out and called it a PR stunt, and they’ve characterized the employee at the center of the case as a low-level guy. Is their characterization accurate?
Well, obviously we don’t think their characterization is accurate. Beyond that, I’m not going to comment any further. I’ll say that we don’t take doing this lightly. We’ve only had one similar case of this nature in the last decade. That’s pretty telling. We have enormous respect for the judicial process and we will litigate in the courts, not in the media, which is how CoStar has chosen to act.
Let’s pivot to the antitrust commission lawsuits. What kind of fallout might we see from these cases?
I’ve said previously that it’s clear that the [Biden] administration wants to put downward pressure on the cost of housing. And part of the cost of housing is the cost of the transaction. I do believe that the actions that have been taken — both in terms of the DOJ’s influence and in terms of the NAR settlement — could put downward pressure on commissions.
I also think that there are some benefits that may flow from this in terms of a more professional industry. You know, I don’t think the concept of assigning a buyer agency agreement is a bad thing. I think it gives a really good opportunity for a buyer agent to demonstrate the professionalism of their role.
It’ll probably result in fewer Realtors because it requires a more professional level of service. That’s a good thing for the industry.
But I’ve never heard from the DOJ or from the antitrust lawyers is any statement to the effect of, we want lower commissions at the expense of eliminating consumer protections, and in particular buyer agency. No one said that. And so I believe that common sense will prevail.
What’s your take on the market?
We’re cautiously optimistic. We don’t think that interest rates are going to fall dramatically or in a hurry, but clearly we see them coming down over time. And we expect that home sales will recover on account of that.
Equally, there are less and less people in the market with a 30-year mortgage under 4 percent. And so to some extent, a new normal is becoming normal. As a result of that, we expect that life goes on, and transactions inevitably will occur.
Do you see any relief on the affordability front in the near future?
We’ve forecasted modest growth over the next 12 months in home prices. But it really depends. A lot will depend on supply. So obviously, depending on the extent to which the interest rates fall, the extent to which the market opens up, the extent to which new inventory comes on the market, and then the extent to which people are ready to transact. But I think that from our perspective, we’ve only estimated modest growth in home prices.
Tease for me your Connect appearance. What do industry members need to know right now? What message do you want to share with them?
I’m really keen to talk about Realtor.com’s strategy. I think we have an entirely unique position in the marketplace. And that position is that having been born of the industry, we have a very deep connection with both MLSs and with our customers. We are not here to disintermediate them. We are not here to become the national MLS. We are here to find ways to support them to ensure that their business grows. I think that that separates us from our major competitors.
One of the ways that we do that is through building a quality audience. And we’re doing a lot of work in a lot of different ways that I can talk about on stage. Things like leveraging the News Corp network, which has been incredible over the last 12 months. Next year, you’re going to see a lot more integration with the Fox network, which we’ll be able to talk about.
In addition, we’re employing a lot of technology. As I said to you before, the last thing that our customers want is bad leads, and we know that with some of our competitors, they get a lot of those bad leads. So we’re doing a lot of work to invest in technology to ensure that leads are nurtured. That the quality is enhanced such that the conversion rate for those leads goes up.
We’ll also want to talk about the work that we’re doing to support the industry, which positions us completely differently to any other portal. Nobody else is doing it like Realtor.com is doing it.
Also, we have other means of unlocking growth. As much as we’re very focused on the core buy and sell part of our business, we have also invested a lot of time and energy into our new rentals partnership with Zillow. It’s important to note that our audience plus Zillow’s audience is now exceeds Apartments.com’s audience.
From a new homes perspective, our new homes business has grown very substantially in the last 12 months. Today, our partnership with the building industry is second to none.
So we can talk more about all of this on stage.
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