CoStar Group has agreed to acquire Homesnap, the residential real estate search portal company, for $250 million in cash, the company announced Monday. The deal is expected to close by the end of the year.
“The acquisition of Homesnap will enable us to enter a new space and expand the total addressable markets in which we can compete,” CoStar Group founder and CEO Andy Florance said in a statement.
CoStar, a commercial real estate data and analytics firm, has built a massive presence in the commercial real estate space, but had yet to significantly make its way into residential real estate. Earlier this year, CoStar purchased Ten-X, the company behind real estate auction platform auction.com and its accompanying commercial auction platform ten-x.com.
CoStar already had a presence in the residential real estate rentals space, with Apartments.com.
With the addition of Homesnap to its portfolio, CoStar adds “clients and information covering 90 percent of the estimated $27 trillion U.S. residential real estate market,” according to Florance, which nearly triples the size of its addressable market.
“Over the past thirty years, CoStar has become the leading real estate technology platform by working in partnership with commercial real estate brokers to serve their needs for data, analytics and advertising exposure for their property listings,” Florance said. “Similarly, Homesnap works in very close partnership with residential agents to serve their needs for data, analytics and advertising exposure for their property listings.”
“We will continue to differentiate our residential real estate portal and solutions by working solely to help agents market their listings and their brands, which is in sharp contrast to other portals that increasingly advertise on top of agent listings and offer brokerage services directly.”
CoStar has also been linked to the potential acquisition of CoreLogic, another real estate data and analytics firm that says it has a client base of more than 1.2 million agents across the U.S. and Canada, and serves as a technology vendor for some of the biggest multiple listing services in the country.
Homesnap has so far failed to compete with the likes of Zillow or Redfin for consumer eyeballs. The company’s portal is built as a joint venture with Broker Public Portal, which is a project backed by real estate brokerages and real estate trade associations through their multiple listing services.
Homesnap — which often boasts that’s it’s real estate industry-endorsed due to the partnership with Broker Public Portal — now has the backing of a parent company that has a market cap that’s nearly $10 billion larger than Zillow’s.
Last month, the company launched a new artificial intelligence-powered tool that the company believes can predict how quickly a home will sell at various price points. In February, Homesnap launched a revamped version of its Homesnap Pro app. The company has also launched new lead generation tools and a future commission-based payment service in 2020.
“Homesnap has spent years building tools that reinforce the agent-client relationship and arm both home buyers and agents with the data and software they need to find homes and do their jobs,” Homesnap CEO John Mazur said in a statement.
“In addition, residential property agents spend an estimated $10 billion every year on software and marketing, while influencing a further $21 billion of spending in adjacent markets, such as lending, insurance and relocation services,” Mazur added. “We are excited to join CoStar Group and leverage their 30 years of knowledge and experience in property data, software and marketing to take advantage of this significant growth opportunity.”
Homesnap CEO John Mazur is confirmed to speak at the December 17 Connect Now one-day virtual event.