According to a press release, the update is the most comprehensive overhaul of Zillow's listings pages in five years. The redesign does away with scrolling on Zillow's desktop version and offers a wider layout.

"The new design delivers a fun and efficient way to browse homes on the Zillow website, making it easier for home shoppers to navigate and process information," said Jenny Arden, chief design officer at Zillow. "We introduced a wider layout for images, larger fonts for the most important facts and a clearer articulation of what makes the home special to help our users quickly understand if the home is right for them."

Zillow's listing pages are also getting a makeover on the iOS version of the company's mobile app. Again the idea is to limit scrolling with users presented with a layout with sections marked "What's Special,"' "Market Value," "Monthly Cost" and "Neighborhood."

In a blog post, DelPrete showed how the percentage of an agent's commission Zillow takes for houses that transact for more than $500,000 has been raised from 35% to 40% in six regional markets.

At the end of the 2021 financial year, Zillow CEO Rich Barton told investors that he expected the company to be making $5 billion in revenue at a 45% EBITDA margin by the end of 2025. The Flex price hike seems to be a small step towards that lofty goal as the U.S. housing market continues to be sluggish.

The price increase appears to have occurred quietly in September in the Denver, New Haven, Cape Coral, Reno, Oklahoma City, and Greenville markets.

Under Zillow's Flex program selected agents don't pay the portal upfront but do pay the company a success fee if and when a lead transacts. At the time of writing, there were 11 so-called 'enhanced' regional markets where Zillow only uses its Flex model.

The model is very different from the company's main breadwinner, its Premier Agent product, which sees agents pay the portal for buyer leads.

Zillow has been progressively rolling out Flex in more markets and the model is seen in some quarters as Zillow's insurance play against two pending lawsuits which could impact its Premier Agent business.

The new feature (pictured below) runs from the main search bar and is currently available on the portal's iOS app with the Android version expected to be launched by the end of the year and a desktop version slated for next year.

"Nearly one-third of home shoppers have children younger than 18, making 'search by school' an important feature on the Zillow app," said Nicholas Stevens, vice president of product at Zillow. "We understand the perfect home often extends beyond the property itself, and this feature makes it easy for shoppers to explore homes for sale or for rent in their desired school districts."

The introduction of the tool comes at a time when real estate marketplaces are slowly starting to realise that users often need to search by relative distance (or indeed time) from specific points of interest rather than the town or neighbourhood meta-data that has historically been the default search jump-off point.

Attendees of Property Portal Watch in Madrid last week heard how British portal Zoopla is integrating the services of TravelTime to let its users search for a home by the time it would take them to reach a certain location such as a workplace or school.

Zillow is somewhat late to the party with rivals Realtor.com, Redfin and even its sister site, Trulia having already introduced a school-based search feature.

In the coming months, Opendoor will be the first integrated API tool and primary cash offer solution to power eXp’s ExpressOffers platform.

The partnership will give eXp Realty’s 90,000 agents the ability to request cash offers for qualifying properties on behalf of their clients, directly from their eXp dashboard.

They will also be able to present Opendoor offers alongside the option of listing the client's home on the market—providing sellers with an option to choose how they move.

eXp's agents can also participate in the 'Opendoor for Agents' rewards program, which makes them eligible to receive a commission from Opendoor—on top of any previously negotiated client commission—for every eligible transaction that originates and closes on their portal.

Opendoor already collaborates with US portals including former iBuyer Zillow and News Corp's Move Inc subsidiary Realtor.com.

While Zillow went through a high-profile exit from the iBuying space in November 2021, Opendoor has persevered with iBuying and has steadily widened its reach by partnering up with the likes of Redfin and Zillow itself.

But the firm felt compelled to lay off 22% of its workforce in April this year when 560 people lost their jobs as Opendoor moved to recover from losses in excess of $1.4Bn in 2022.

Opendoor is owned by real estate veteran Eric Wu, who resigned as CEO in 2022 to be replaced by then-CFO Carrie Wheeler.

]]> https://www.onlinemarketplaces.com/articles/opendoor-and-exp-realty-announce-partnership/feed/ 0 https://www.onlinemarketplaces.com/articles/interview-andy-florance-costar-group/ https://www.onlinemarketplaces.com/articles/interview-andy-florance-costar-group/#respond Thu, 05 Oct 2023 13:05:19 +0000 https://www.onlinemarketplaces.com/articles// CoStar CEO Andy Florance has revealed his intention to make a serious expansion into Europe—and hasn't limited his ambitions to acquiring just one portal.

In an on-stage chat with Online Marketplaces Founder, Simon Baker at the Property Portal Watch (PPW) conference in Madrid, Florance outlined his plans to invest a chunk of his "$9 billion war chest" into European portals and technology.

And, in an off-stage exclusive interview with Online Marketplaces, Florance said that a number of residential portals are on Costar's radar.

"We are interested in putting a bigger percentage of our investments into Europe. The space is moving very quickly.

"It's a good time to start looking at European options. There is a great big game of musical chairs going on in Europe, and people don't know it. I've seen this before in the United States three or four times.

"I think the music will stop within two years. There will be winners and losers. Time is of the essence."

Florance told Baker that he expects a mass consolidation across major markets in Europe and around the world and even hinted that he is looking at "the number one, two, and three" portals across Europe as he explores investment opportunities—as well as smaller players if the growth potential is there.

"There will be a couple of shakeups, a couple of rude awakenings. How people perceive the number one portal, the number two, three or even four portal in a country can change very quickly. Things will change rapidly over the next three to five years."

When asked if CoStar was on the lookout for more than one acquisition, Florance's brevity said it all: "For us? Oh, for sure."

Florance went on to describe how the European market has been falsely split into individual countries, with too many players operating within one country but too few effectively operating internationally:

"I do not see a world going forward where we have one portal in this country, one in the next country, one in the next country and so on.

"The European market is being driven by financial engineering that focuses on making decisions quarter to quarter or via investment cycles that hand over assets from one private equity fund to the next until they take it public.

"I can see two or three portals operating in a dozen to three dozen countries."

We asked if there was anything Florance would like to publicise, and only then did the shields go up:

"I wouldn't respect you as a reporter if you didn't ask, but I wouldn't respect myself as a CEO if I answered!"

Make no mistake—CoStar is coming to Europe, and soon.

The vastness of Costar's budget for mergers and acquisitions is no joke—Costar pulled out of a $3 billion deal to acquire Realtor.com in February 2023, and Florance was quick to highlight that the cancelled merger represented just one-third of Costar's buying power.

It appears that Florance's appearance at Property Portal Watch is part of a bigger vision to retarget the Group's funds into increasing its footprint in Europe, which currently includes the Spanish commercial portal Belbex, Loopnet in the UK, Bureaux Locaux in France and Germany-based real estate data company Thomas Daily.

In a wide-ranging conversation, Florance also shared insights on topics including building Jeff Bezos' first computer, Costar's partnership with MIT, the value of AI in real estate, and Costar's high-octane rivalry with Zillow.

CoStar alleges that Homesnap founder Guy Wolcott, who left the company in April, along with former Homesnap employees John Mazur, Thomas Goff, and Jeffrey Repanich gained knowledge of CoStar's inner workings to set up a similar platform named Happening Technology.

According to a document filed Wednesday in the U.S. District Court for the District of Columbia, CoStar accuses Wolcott of poaching its employees and leveraging knowledge that they gained after the Homesnap takeover, specifically around the CoStar Sync data-transfer system.

"At the time of their departures from CoStar, none of the Former Employees informed CoStar management of their future plans or where they would be working next, even when asked. As CoStar has recently discovered, however, all of the Former Employees eventually formed or joined Happening Technology, a new company that was incorporated in January 2023 with Wolcott as CEO, and did so with the apparent intention of repurposing the proprietary and confidential information they had access to and worked with at CoStar so that Happening Technology could offer competitive technology and services to CoStar’s competitors."

Wolcott denied the allegations in comments made to U.S. agent-facing publication Inman.com saying that he was confident that it would become clear that there was no misappropriation or copying.

Until it was sunsetted by CoStar earlier this year in favour of the Homes.com brand, Homesnap built software tools for agents and had a portal website. CoStar bought Homesnap for $250 million in 2020 and then went on to detach the platform from the Broker Public Portal program in 2022.

The New York Times broke the story this morning with an official post from Redfin CEO Glenn Kelman confirming the break a few hours later via a blog post.

The brokerage boss said that Redfin was quitting the influential industry association due to a disagreement on its rule that requires a fee for the buyer’s agent on every listing as well as "a pattern of sexual harassment".

The NAR is a powerful industry organization which collects dues from its member agents and brokerages in exchange for advocacy, lobbying and regulation services. Members must abide by the NAR's strict rules.

Redfin is one of the top ten brokerages in the United States by transaction volume. Thanks to the unique market dynamics of the North American housing market the company has become one of the United States' most popular portal sites in its own right.

A public disavowal from one of the industry's top companies comes at a poor time for the NAR.

The industry association is facing accusations of sexual harassment after a New York Times article exposed alleged aggressive and abusive behaviour from its President, Kenny Parcell.

The accusations seem to have been the final straw for Kelman, who wrote:

"We’d already been uncomfortable with the NAR’s positions on commissions when we read reports of sexist behavior and sexual harassment, by the NAR’s president and others, based on interviews with 29 former NAR employees."

The CEO went on to explain the disagreement with the NAR's rule that, he believes, stifles competition.

"In the many marketplaces governed by its policies, NAR still blocks sellers from listing homes that don’t pay a commission to the buyer’s agent, and it blocks websites like Redfin.com from showing for-sale-by-owner listings alongside agent-listed homes. Removing these blocks would be easy, and it would make our industry more consumer-friendly and competitive. "

The same NAR rule landed the portal and NAR member, Zillow in court. When it became an NAR member in 2021, the company was forced to show non-MLS listings on a separate tab on its results page, provoking a loss in traffic and leads to discount brokerages. One such brokerage, Texas-based REX, took Zillow to court over the issue with the matter finally settled this week in the portal's favour.

Another gripe that Redfin has with the NAR is that membership is required to obtain access to MLS listings databases. In some areas, agents must be members of NAR to have access to listings, something both Zillow and Redfin want to see changed.

"We’re asking NAR to decouple local access to these tools, including the listing databases known as Multiple Listing Services, from support for the national lobbying organization. Agents shouldn’t have to underwrite policies and legal efforts that hurt consumers when most of us got into real estate to help consumers. Redfin’s mission after all is to redefine real estate in consumers’ favor."

Whether Redfin's shunning will be enough to incite change at the NAR remains to be seen but the negative headlines seem set to continue as it is a defendant in two legal cases which allege that its policy of mandatory seller commission is anticompetitive.

REX, a low-commission brokerage, filed suit in March 2021 alleging that Zillow (and the National Association of Realtors, NAR) was unfairly concealing non-MLS listings from its portal search results, a strategy REX claims contributed to the brokerage folding in 2022.

The crux of the lawsuit is Zillow's decision to send For-Sale-By-Owner (and therefore non-MLS) listings to a less prominent tab with less traffic constituted an unfair and deceptive practice, which limited the opportunity for brokerages like REX to attract interested buyers and therefore earn commissions.

Zillow did indeed modify its site in January 2021, when it began using the Internet Data Exchange (IDX) feed that handles MLS listings. However, Zillow argued, successfully, that the changes it made were done specifically to comply with NAR guidelines regarding its 'co-mingling' policy.

And last week, on September 29, a trial jury sided with Zillow in a verdict that hammered a final nail in the coffin for REX after 30 months of back-and-forth rulings, from forcing Zillow to hand over sensitive FSBO data to REX's antitrust claims being thrown out with prejudice.

Will Lemke, corporate communications manager at Zillow, said:

"We’re pleased with today’s victory and are ready to move on and focus on what matters: helping customers who come to Zillow get into their next home."

Timeline of REX vs Zillow / NAR lawsuit

January 2021 - Zillow switches from ingesting its listings using many feeds from individual MLSs to using a so-called 'IDX feed'. The IDX feed is a privilege that Zillow has access to thanks to its status as a paid-up brokerage member of MLSs and the National Association of Realtors (NAR).

While the switch to an IDX feed helped Zillow's back-end processes become more efficient it also came with a set of rules that the portal was obliged to adhere to. Sites like Zillow that use the IDX feed must display members' listings separate from non-members' listings.

March 2021 - Fresh from winning an antitrust case targeting its Zestimate tool, Zillow's lawyers are back at work to defend against a suit brought against the portal and the NAR.

The suit comes from Austin, TX-based discount brokerage REX which claims that Zillow's new policy around listing display is stifling competition, preventing home-hunters from seeing all available listings and ultimately driving customers away from REX.

Because REX does not have an MLS membership, its listings are displayed on Zillow's 'other' tab along with FSBO listings. A state of affairs that REX argues led to decreased traffic from the portal and a negative impact on the discount brokerage's bottom line.

March 2021 - New scholarly research recently penned by a federal employee and published in the prestigious UC Berkeley Business Law Journal uses some strong language in claiming that the American real estate game is rigged to favour those traditional brokerages that charge 6% commission.

The American MLS system along with the NAR itself take most of the blame in the paper for the anti-competitive state of the industry. The report, which was partially funded by REX, uses some emphatic language in claiming that...

"The problem for those entrants is that the residential real estate industry is structured to require peer cooperation to complete transactions. Thus, innovative entrants offering to compete on price have been stymied by traditional real estate brokers acting as an informal cartel."

June 2021 - REX is ordered to stop referring to Zillow and NAR as a 'cartel' as a judge decreed that the case does not warrant a preliminary injunction which would have essentially handed a victory to REX and forced Zillow to put the brokerage's listings on the main listings tab on its portal.

February 2022 - NAR issues a counterclaim against REX. The complaint alleges that the discount brokerage's claims ultimately "confuse[d] and misle[d] customers into believing that sellers who list their homes for sale with REX do not pay buyer-agent commissions"

May 2022 - REX acquires the services of noted lawyer David Boies despite having seemingly been forced out of business.

The discount brokerage was forced to join MLSs back in October contrary to its core beliefs and value proposition for home sellers, a decision which, along with hefty legal fees, ultimately left the discount brokerage in a tough position.

August 2022 - Zillow asks the judge to allow its lawyers access to laptops kept as severance by former REX employees. The portal claims that former employees may have wiped data from those laptops that might be used as evidence in the trial.

The motion is ultimately granted by the court despite REX's protests. REX's lawyers reply by asking for access to data around Zillow's FSBO listings.

September 2022 - Zillow reaches out to REX to invite the now-defunct brokerage to join forces in challenging the NAR's controversial 'no commingling rule'. Basically, Zillow is now openly saying that when it switched to an IDX feed in 2021 that it did so only to comply with the an NAR rule that it is not in favour of. Zillow's Senior Director of Broker Operations Matt Hendricks said:

“Zillow strongly supports updating policies like these because they empower consumers and provide a more accessible, transparent picture of what is on the market, helping them make better-informed real estate decisions.”

October 2022 - Zillow is ordered to hand over its FSBO data so that REX can build a case supporting its claim that Zillow's practices contributed to REX's demise.

August 2023 - REX's antitrust claims are dismissed with prejudice, meaning they cannot resubmit the lawsuit in the future. The decision asserted that Zillow and NAR did not conspire to hide listings, effectively giving NAR a "you're free to go" reprieve from the courts.

September 2023 - Zillow wins the case after a trial jury finds that the portal's practices regarding non-MLS listings are fine, while REX failed to prove that Zillow used false advertising before advertising listings elsewhere on its portal.

But now it has emerged that the plugins were quietly deactivated just one month after release. Redfin CEO Glenn Kelman revealed how a conversation with OpenAI CEO Sam Altman prompted a swift response to revoke access to the plugins.

The story goes that research published by real estate news site Inman in June asserted that chatbots posed discriminatory risks in the financial sector, with the Consumer Financial Protection Bureau (CFPB) finding that financial institutions using chatbots to solve customer faced significant risks by integrating them into their services.

The CFPB highlighted how a chatbot's "effectiveness wanes as problems become more complex", but more worryingly, financial institutions risked violating legal obligations, eroding customer trust, and causing consumer harm when deploying chatbot technology.

In the same month, Inman also conducted and published its own research and findings, asking ChatGPT which neighbourhoods in particular regions in the US had predominantly Latinx, Jewish or black demographics.

While the results ChatGPT offered were reasonably accurate, Inman pointed out that the responses delivered by chatbots like ChatGPT could potentially be used for discriminatory reasons, with buyers specifically avoiding particular neighbourhoods based on 'unfair' questions that contradict the Fair Housing Act (1968).

As Inman put it:

"[The Fair Housing Act] bars discrimination on the basis of race, religion, sex and family status. Significantly, though, it applies to 'direct providers of housing, such as landlords and real estate companies' as well as banks and other entities."

Furthermore, Sean Frank, co-founder and CEO of tech-focused Mainframe Real Estate in Florida, repeated the exercise and found that ChatGPT could be prompted to give responses that included links to real estate listings on Redfin's portal—in other words, consumers can search for and filter listings by filters that directly and overtly bypass the Fair Housing Act legislation.

Frank told Inman:

"[The Chatbot] thinks it’s being helpful.

"But it was just way too easy for it to say things that an agent couldn’t say."

A further 28-page report from Redfin was enough evidence for OpenAI to retract its real estate plugins with immediate effect.

Angela Cherry, spokesperson at Redfin said:

"We agree with their decision and are working together with OpenAI to ensure ChatGPT’s responses to users’ questions meet fair housing standards—an issue we raised with them and are optimistic that they’ll be able to address."

Meanwhile, Zillow is "pursuing other AI opportunities", according to spokesperson Claire Carroll:

"The generative AI space is fast-moving, and we’re excited about the ways it will help our customers and partners."

So—for now at least—OpenAI doesn't offer portals any plugins for real estate portals. How long will it take (if ever) for an AI chatbot to respond to customer enquiries without submerging agents in hot water?

The new feature is currently in beta testing and will be rolled out for both Matterport's 2D and 3D digital twin solutions when it officially hits the market.

The integration also boasts the ability to calculate square footage and primary components in rooms such as kitchens, bedrooms and bathrooms—a feature Pittman says will significantly ease homebuyers' ability to plan specific upgrades and other needs when browsing a home remotely.

In a statement, Pittman said:

"I’m excited to see the progression of our digital twins helping customers put AI and automation to practical use for their properties.

"Instant access to room dimensions, total square footage by room, floor, and the entire space, builds upon one of our most popular features—Measurement Mode.

"With our new intelligent digital twins, our customers get hundreds of useful measurements, room names, print-ready layouts and more, automatically."

In June, Matterport introduced another integration by the name of Genesis, a generative AI component with extensive use cases including reimagining physical spaces by staging properties with optimized wall placements; insights on energy efficiency and energy consumption; identifying safety and security risks such as fire hazards or code violations; and proactively surfacing common maintenance and repair issues for older buildings.

Matterport has gone through significant layoffs this year—a reported 170 job losses in July constituted 30% of Matterport's total workforce—yet optimism around the company and its technology potential holds firm, with artificial intelligence integrations like this month's another string to Matterport's bow.

The company continues to be loss-making but the California-based firm is edging towards profitability and achieved increased revenues and subscriber numbers in its Q2 results released in August.

Share prices remain volatile, with Google Finance showing that yesterday's (September 26, 2023) $2.16 per share is a shrinkage of 172% since November 2021's high of $28.9 per share.