On CoStar: “Eventually the playbook is to charge for paid inclusion of listings and to raise prices over time as people become more and more reliant on CoStar.”

If realtor.com wasn’t already thought of as a belligerent in the cold war between CoStar and Zillow, it might be time to reconsider.

During a recent Connect Now virtual session, Move Inc. CEO David Doctorow, who oversees realtor.com, advocated for what he said was his company’s open-marketplace concept and against “first-party products” offered by the two online portal juggernauts.

The session added another player into the ongoing battles between CoStar and Zillow, as the former continues to elbow its way into the online residential real estate space and take verbal shots at Zillow.

Doctorow said his company was committed to remaining an open and transparent marketplace that will help consumers gain confidence when buying and selling a home.

“I see others out there who are trying to push a closed ecosystem, push their own first-party products,” Doctorow said. “You want a valuation model? Zillow will give that to you, it’s theirs. You want to take a loan? They’ll give you their own loan. You want to sell your home? Companies out there might buy it straight from you.

“But in the end, we think that this marketplace model is the way forward to help people feel fundamentally more confident,” he said.

David Doctorow | Move Inc. CEO

Giving consumers more confidence when buying and selling homes was the general theme Doctorow developed during the talk. He said transparency and options would help consumers navigate the homebuying process.

He pointed to realtor.com’s ReadyConnect Concierge network of lead generation as a way to pair agents with buyers and sellers as an example of helping all parties and said there was “no question” it was better for agents.

“Will a closed ecosystem fundamentally provide enough innovation for the consumer? Empower the consumer to have choice?” Doctorow asked. “Will they fundamentally feel more confident? I think the jury is really out.”

He questioned the motives of Zillow and CoStar when it comes to delivering value to agents, sellers and buyers.

CoStar spent 2021 making moves into the online for-sale space, acquiring tech startup Homesnap in October and announcing the development of a new portal in New York City.

Later that month, CoStar CEO Andy Florance accused an unnamed competitor widely believed to be Zillow of “hijacking” listings, during a discussion at Inman Connect Las Vegas. He said the company was acting like the mafia, saying the portal giant charges agents a monthly fee to avoid having their listings hijacked.

Doctorow also questioned CoStar’s motives during his discussion.

“As we look at Zillow and CoStar, the way I think about it is scale and motives,” Doctorow said.

CoStar might have 10 percent of the audience as realtor.com and even less compared to Zillow, Doctorow said, which poses a problem of its current relevance to customers.

He suggested buyers and their agents are left without independent advice or clarity around buyer commissions and that CoStar would move toward charging for listings.

“If you look at the track record of CoStar in commercial and in rentals, what you see is that eventually the playbook is to charge for paid inclusion of listings and to raise prices over time as people become more and more reliant on CoStar,” he said.

“If I’m a listing agent or listing broker, that’s a really scary endgame,” he added, “and I don’t think I want to be reliant on them.”

Zillow and CoStar fire back

In response to Doctorow’s comments, CoStar told Inman it has no plans to charge agents to feature listings on its existing brands, including Homes, Homesnap and Apartments.com.

“CoStar Group’s New York City listings platform, Citysnap, will similarly not charge agents to include their listings when it launches later this year,” a CoStar spokesperson said in an emailed statement. “To further support this open, industry-friendly model, CoStar Group is committed to ‘your listing, your lead,’ delivering leads exclusively to the listing agents and brokers responsible for those listings.”

CoStar also shot back at both realtor.com and Zillow.

“This practice is in contrast to realtor.com and Zillow, who are brokers themselves and who refer leads from listings to agents who pay substantial referral fees,” the statement continued. “Zillow, Redfin and realtor.com compete directly with agents and brokers. CoStar Group does not.”

Zillow defended its products in a statement responding to Doctorow’s comments.

“Zillow is on a mission to make it easier to move. Because we focus on the consumer experience, needs and wants, we build features and tools that others can’t or won’t,” a Zillow spokesperson said. “We understand that moving is hard, but Zillow has the information, products, services and technology that can help at every step of a customer’s journey. That includes convenient and transparent tools to connect customers with real estate professionals — whether that’s a seller’s agent, a buyer’s agent or a local lender.”

Email Taylor Anderson

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