Anaheim, California — Andy Florence, Founder and CEO co-starring grouplet’s be clear about one thing: his company had nothing to do with the fee litigation currently rocking the real estate world.
“We were not involved in that litigation at all. We learned of this from NAR long after it began,” Florence said in an interview with Housing Wire. . National Association of Realtors The NXT tournament will be held in Anaheim on Wednesday.
Report published by KBW Prior to the Sitzer/Barnett verdict being announced, KoStar was identified as the “largest beneficiary” of the current changes in the buyer agent landscape due to its unique business model.
After the decision in this case was announced, CoStar’s stock price soared, as did the stocks of its competitors, including: Jiro and red fin It fell dramatically. But Florence said she can’t believe people think her co-star is involved in that lawsuit or any other.
“We have 189,000 real estate customers. Who would be stupid enough to shoot themselves in the head like that?” Florence said. “We had nothing to do with it at all. Anyone who says we were funding it is lying. As a publicly traded company, we’re in a pretty open position.”
Homes.com, owned by CoStar, is a home search portal that saw traffic surge last year, hitting 100 million unique visitors in September, second only to Zillow.
Unlike other home search portals, Homes.com provides homebuyer leads free of charge to listing agents, rather than selling them to buying agents. The company’s business model was developed before buyer-broker rules were a thing and what Florence believes is a better experience for agents and buyers.
“We chose not to use buyer-broker rules from day one because we thought it was a better business model,” Florance told Housing Wire in October.
Florence said he has taken the commission lawsuit seriously from the beginning and was surprised that other real estate leaders seemed to ignore the threat to the industry. He believes most agents have not yet considered the potential consequences.
“99% of agents haven’t thought about it yet. The word ‘appeal’ gets thrown around a lot. I hope you are successful in your appeal, but the appeal is unlikely. I think this is likely to be the new reality,” Florance said.
This new reality will force the U.S. to move its home-buying model closer to that adopted by other countries, Florance said.
“It’s clear from research focus groups and what’s happening in other countries that if you completely ban sellers from paying buyer agents, homebuyers won’t be paying buyer agents out of their own pocket.” Lance said.
But he sees a silver lining for agents.
“By and large, there is no such thing as a buyer agent, because 85% also represent a significant amount of sellers. And the more senior you are in the industry, the more sellers you represent. I will be in charge of this.”
Florance says agents who do a combination of both are likely to keep more commissions.
“As history has shown, even if there is price pressure on fees, I think it will move very slowly, around 5% to 10% per year. Many agents will maintain higher commission rates for the same work.”
He added: “So in terms of hours, some agents may work the same amount of money and earn half as much, and some may work the same hours and earn twice as much.” Some agents will be able to double their income. ”
The real risk, for Florance, lies with Multiple Listing Services (MLS).
“What worries me is that this country depends on MLS to function, and getting rid of MLS because of these lawsuits could seriously damage the country. They are essential to the functioning of real estate and critical to our business,” Florance said.
