During his latest ICNY appearance CoStar Group CEO Andy Florance chastised Zillow, Redfin and Realtor.com for prioritizing their bottom line to the detriment of buyers and listing agents.
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Andy Florance doesn’t care if you call him a liar.
The CoStar Group founder and CEO used his latest Inman Connect New York appearance on Tuesday to take aim at Zillow, Realtor.com and Redfin for so-called “bait and switch” business tactics, and address criticism about Homes.com’s astronomical website traffic growth during the last half of 2023.
Andy Florance | Photo credit: CoStar
“We can’t lie,” he said. “If I lie about a number in public company reporting, I go to jail four times as long as you’d go to jail for shooting someone in the head in the street. Public companies don’t make these things up.”
In October, CoStar Group ruffled feathers after announcing Homes.com had usurped Realtor.com as the nation’s second-biggest residential portal. CoStar Group said Homes.com’s monthly unique visitors jumped from 46.3 million in August to 100 million in September — a whopping 117 percent change.
The triple-digit growth earned a side-eye from competitors, who said CoStar inflated numbers through copious paid advertising. They also provided alternative traffic data from popular third-party providers Comscore, Semrush and SimilarWeb to disprove CoStar’s growth statistics.
“[We use] Google Analytics, and it’s widely accepted as the gold standard,” he said. “It is how Realtor.com has reported their numbers for the last decade, how Zillow reported the numbers for the last decade, how Redfin reports.”
“Now people start saying abandon the numbers they’ve used forever,” he added. “So it’s a little bit like if you win a basketball game 140 to 75, and at the end of the game, they say, ‘Let’s not look at the number of baskets through the hoops. Let’s look at dribbles.’”
Florance said Zillow is the final giant that CoStar Group must topple. Although it will take years of work to match Zillow’s traffic and pop culture status, the CoStar founder and CEO said those two factors are small apples when it comes to agents’ and consumers’ actual experiences on the site.
“[People] conflate high traffic with a positive consumer experience, but they’re two separate things. Traffic is traffic, positive consumer experience is positive consumer experience.”
Florance said Zillow, Redfin and Realtor.com — which he called Ziltorfin in a quip that garnered riotous laughter from the audience — make listing agents’ branding “subordinate to the portal’s brand” and overly complicate the process of connecting consumers with agents.
“In the rest of the world, when an agent has a listing, their name is on the listing, their phone number is on the listing, and there’s branding happening,” Florance said. “Only in the United States is it the portals’ brand goes on the listing rather than the agents’ brand. That’s bizarre.”
“If you’re an agent, you may not be catching this, but buyers have been trained to not ever hit ‘contact agent’ because if you do you need to buy a new cell phone,” he added. “I’ve tried it. I’ve submitted leads on three houses and I received 140 phone calls, emails, texts and voicemails within 24 hours.
Florance said Homes.com’s “Your Lead, Your Listing” model eliminates those experiences by connecting consumers with the listing agent and no one else — something he believes will pull consumers and agents away from Zillow as CoStar builds Homes.com’s visibility.
“I go out and I hire an agent that I trust, who has the right experience and knows my neighborhood is worth the price point and I know has a personal commitment to me to get a good result,” he said. “Then once my listing goes out to for buyers potential buyers, to consider that listing, my listing agent’s name is stripped off my property, and some random agent is now the person who’s going to be selling my property. You lose something there.”
“That’s why [consumers] hate the industry,” he said. “Where [does] that [hate] come from? Where that comes from is the super negative sort of bait and switch deceptive portal practices.”
Email Marian McPherson
