In a statement, CoStar said it is paying $156 million in cash for the site, which it described as “a well-recognized residential property listing and marketing portal that supports over 500,000 residential agents and brokers in the home sale process.”
CoStar founder and CEO Andrew Florance added in the statement that “we are excited to welcome the Homes.com team to the CoStar family.”
“We believe that the acquisition of Homes.com is highly complementary alongside Homesnap, the industry-leading workflow and marketing platform for residential real estate agents that we acquired in December last year,” Florance added. “The combination of Homes.com’s online portal and consumer traffic with Homesnap’s powerful mobile tools and highly effective agent marketing solutions has the potential to create a differentiated service that uniquely focuses on selling a house faster and at a better price, rather than just trying to take agent fees.”
CoStar, which for years has been a force in the commercial real estate world, picked up Homesnap for $250 million. The deal made waves in the industry because it signaled the company’s commitment to residential real estate, and because it seemingly put the firm in direct competition with Zillow.
For his part, Florance said in January that his company isn’t competing with Zillow, but rather that “the residential agent is Zillow’s competitor.”
CoStar also saw its attempted acquisition of rival RentPath fall apart late last year. In that case, the Federal Trade Commission filed a lawsuit alleging the acquisition would have increased concentration and eliminated competition in the rental listing space.
Scuttled deals notwithstanding, CoStar stands alone for how aggressively it has worked to expand via acquisitions in a relatively short time.
In the case of Homes.com — which had been a division of parent company Dominion Enterprises — CoStar said in its statement Wednesday that it expects the company to “contribute approximately $5-10 million in incremental revenue to CoStar Group in the second half of 2021.” The statement further explained that the site gets 5 million monthly visitors, who “search nearly 1.8 million residential property listings.”
Virginia-based Homes.com’s website includes a portal for searching listings. The company also provides marketing services to real estate professionals. In 2015, the company also rolled out what it described as “one of the largest banner ads in the industry.”
In Wednesday’s statement, Homes.com President Dave Mele said that he and his team “are looking forward to working with our new colleagues at CoStar.”
“Together we will be dedicated to growing the Homes.com brand,” Mele added, “and building innovative solutions that expand the marketing options available to consumers and their agents.”