Florance said his initial interest in acquiring Matterport came from the usage and influence of the company on renters searching for apartments on CoStar’s rental site, Apartments.com.
“During the pandemic, more renters than ever before selected their apartment without ever visiting it in person,” Florance said.
While the pandemic may have ended, these habits have persisted, leading Florance to believe that the trend will seep over permanently into the residential real estate world.
Through the acquisition, Florance is taking a bet that similar trends will extend into the residential real estate sector. He added that by providing Homes.com member agents with access to Matterport’s technology, CoStar is further aiding agents through their “your listing, your lead” model.
“The most important thing is selling the home, and if you are driving consumers to the agent that is the expert on that property, then the home markets better and there is a greater chance for success,” Florance said.
Additionally, Florance believes this model will succeed because it focuses on selling homes and building brands for both agents and brokerage firms. For Florance, the model used by other listing portals — where consumers click a “contact agent” link on a property and are brought to a random local agent rather than the property’s actual listing agent — is harmful to buyers, sellers and real estate firms.
“The lead diversion model has genericized real estate brokerages,” Florance said. “People are more willing to hire a brand that they trust to represent them, and agents will want to work for good brands. Brands matter.”
With the lead diversion model, however, brokerage branding is less prominent. It diminishes the importance of different firms, as well as their varying strengths and services, something Florance said is a complete disservice to the real estate industry.
Although Florance and CoStar are primarily focused on sell-side leads, he believes their model will also help agents generate buyer leads as the site highlights agent and brokerage branding to expose agents to more potential buy-side clients.
By focusing on helping real estate firms and professionals promote their brands, Florance believes there is opportunity for brokerages to expand their margins in the coming years.
“Real estate firms will adapt to the changes, and I believe that margins for firms will expand over the next five years,” Florance said.
