Realtor friends, unless you’ve been living under a rock for the past 2 months, you have been exposed to the massive marketing push generated by the emergence of a rebooted Homes.com. With Homes.com re-entering the portal space, its sights clearly set on displacing Zillow as the top consumer portal, we all need to pay attention. Its significant marketing investment has rapidly increased traffic, and Homes.com aims to redefine the landscape of online real estate platforms. It’s crucial to understand what Homes.com offers and how it compares to Zillow, especially how it will impact for our industry.

Homes.com’s bold entry, marked by its $1 billion+ advertising effort (!), signals a clear intention to capture the consumer’s attention in the real estate space. With a 320% increase in traffic year-over-year, and over 100 million unique views in a single month, the platform’s growth is undeniable. But beyond the numbers, what does this shift mean for us as Realtors?

Ownership Reputation…

Owned by CoStar Group, Homes.com is part of a family of platforms known for dominating their respective sectors in real estate information. This background suggests a strong potential for Homes.com to quickly become the #1 consumer internet portal. However, CoStar’s has a mixed reputation, sometimes accused of prioritizing its interests over those of its partners. And their partners in this scenario are us – the Realtors that create the data Co-Star uses to power their site.

… but Realtor-Friendly Features

One of the most notable differences between Homes.com and Zillow is Homes.com’s commitment to the “my listing, my lead” principle. Unlike Zillow, which sells leads generated from your listings to other Realtors, Homes.com directs leadson your listings back to you, regardless of your advertising status with them. This is a big deal and a huge departure from other consumer portals. This should garner a lot of trust and respect from the Realtor community.

Evaluating the Business Model

So ‘my listing my lead’ is terrific and a great leap forward for portals and their business philosophies. BUT, it’s essential to acknowledge the core business model of online real estate platforms: to position themselves between you and your potential clients. This model seeks to capture leads that might otherwise directly reach out to you, or in the case of Homes.com, have you pay more to ensure your listings are ‘seen’ on their portal.

Return on Investment

When considering advertising with Homes.com, evaluating the return on investment is critical.  The Chabris Group ran preliminary figures based on the Homes.com lead generation and lead conversion assumptions, and found we would make only a 20% return on the investment. That is to say, for $1.00 spent, we would only make $1.20 in gross commissions back to the company after cost of sale. While this is a positive return, it falls far short of the minimum three-to-one or four-to-one minimum return many of us look for in our marketing endeavors.

Strategic Considerations for Realtors

So which agents can benefit from this platform? Those agents that have actively farmed a community can be winners with Homes.com. The portal enables home-buying and selling consumers to search for agents most active in a community. Here is where a farming agent can generate a disproportionally higher return on their investment as they sell a disproportionately higher number of homes in their farmed community.

For the rest of us, before running to sign up for the newest, shiniest thing, hit the pause button for a minute. Before committing your marketing dollars to Homes.com – or any platform – it’s worth considering: what is the opportunity cost of not investing that money into marketing to your sphere of influence?  What kind of return would you generate if you spent that money regularly marketing to and communicating with your sphere? The value derived from deepening connections with those who already know, like, and trust you almost always surpasses that of leads generated through online platforms. All you have to do is look at NAR’s annual survey of consumers to see where the vast majority of consumers find their agent.

Spoiler alert: they already knew their agent or were referred to their agent by someone they knew!At the end of the day, this business was – and always will be – about relationships. Not internet portals.