Last week, the CEO of Realtor.com, Damian Eales, sat down with the Knowledge Brokers—Byron Lazine, Lisa Chinatti, and Tom Toole—for an unfiltered interview. 

Of course, the first topic had to be Eales’ recent op-ed in the Wall Street Journal advocating for buyer agency and exploring the potential impact of the NAR settlement on commissions. 

That led to a series of other questions—including Eales’ response to a Tweet by Zillow CEO Rich Barton, the rivalry between Realtor.com and Homes.com, and NAR’s latest marketing campaign

Here, we’re focusing on the op-ed piece and Eales’ response to Homes.com. Read on for a quick breakdown with some of the more provocative quotes. 

Then block out some time to enjoy the full conversation

Why did Eales write the WSJ op-ed piece?

The first question was about the op-ed piece Eales wrote for the Wall Street Journal, which was discussed in a previous Knowledge Brokers Podcast episode, in which Lazine, Toole and Chinatti did not hold back with their opinions. 

We’ve all been through this with agents who inflate their numbers and make things up, and they’re not making the same apples-to-apples comparison. And ultimately, it hurts the consumer…the things that come out of people’s mouths in competitive situations is pretty frustrating, and it’s plagued our industry.

Tom Toole

Eales was prepared for this question, having watched previous Knowledge Brokers episodes (particularly the one reacting to his op-ed), and seemed more than happy to answer it:

First and foremost, why did I write the op-ed in the first instance? I think the reason is there’s been really few positive stories advocating for this profession. And I want to be clear that that op-ed was advocating for the profession first and foremost and in particular advocating for buyer agency…

We all compete in a competition of ideas with a lot of thought leaders and regulators and policymakers and lawmakers who are looking very closely at the industry that we operate in. And I wanted to draw attention to the issue of buyer agency and that in their desire to lower the cost of homebuying and selling, that those regulators may throw the baby out with the bathwater…

Damian Eales

Realtor.com CEO

Eales clarified that he believes there could be—and should be—downward pressure on commissions, if only to incentivize transparency among agents and to weed out those who either cannot or do not demonstrate their value. And by that we mean demonstrating it in a way that leaves the client in no doubt that the commission fee is, if anything, on the low end of what the agent could ask for the value they’re delivering. 

Of course, no one can guarantee that every client will be happy with the service they receive, no matter how well the agent may serve them. 

But lack of transparency has contributed to lawsuits like Sitzer/Burnett, with home sellers not convinced that the commission fees they paid were justified. 

Certainly, the design of that settlement…was to put downward pressure on commissions, so we might just say at the outset that if that settlement is not successful, then the work of the DOJ is not done.

Damian Eales

Realtor.com CEO

Rich Barton’s Tweet about the op-ed

Also discussed was a Tweet posted by Rich Barton, Zillow CEO, in response to the op-ed and Realtor.com’s new marketing campaign

Toole asked Eales what he thought of Barton’s Tweet.

Well, in fairness to Zillow…[Barton] has been advocating for buyer agency for some time…

Damian Eales

Realtor.com CEO

He thanked Rich Barton and Zillow for amplifying that message and providing an example of how industry solidarity can work when it’s in the best interest of the consumer. 

We need to remind Americans that buyer agency was a hard-fought consumer advocacy win that occurred in the ‘90s. And I think that’s been lost in this conversation. So, well done to Rich. Now, having said that, he is my number one competitor without any shadow of a doubt…

Damian Eales

Realtor.com CEO

Realtor.com wants to be number one “with no tricks”

Chinatti referenced a comment Eales made saying Realtor.com wants to be the number one portal “with no tricks.” She asked him to clarify what he meant by that. 

There’s a lot of confusion in the market simply because of what we consider to be an incredibly misleading and deceptive advertising campaign by Homes.com/CoStar. All we ask for is an apples-with-apples comparison….

Damian Eales

Realtor.com CEO

This comes after Homes.com ads showcasing its monthly unique visitors, boldly stating “Homes.com now has DOUBLE Realtor.com’s traffic,” at 156 million visitors. 

Homes-dot-com-advertising-vs-Realtor-dot-com

The problem, Eales argues, is that Homes.com is pulling data from 17 different websites to reach that number. In addition, Homes.com uses Google Analytics to analyze its data, rather than the independent metric the rest of the industry uses (Comscore).

Eales went on to say Realtor.com doesn’t lead with audience stats, mainly because their primary focus is the quality of the leads they provide for agents, as well as other services they provide on the buy and sell side. 

He then differentiated Realtor.com’s focus with that of Homes.com. 

The Homes.com model is not only selling ‘your listing–your lead’ but they are increasingly talking about the advertising benefit, the branding benefit… 

All we would call on CoStar to do is just be transparent. Don’t misdirect to all these other websites. Just compare Homes.com to whoever else you want to using a like-for-like currency and a like-for-like methodology, and that is Comscore in that market…

And they may beat Realtor.com, at which point, I’ll congratulate them. But until that point, they should use Comscore, the independent metric that’s used in the industry.

Damian Eales

Realtor.com CEO

Toole sympathized with Eales’ frustrations.

We’ve all been through this with agents who inflate their numbers and make things up, and they’re not making the same apples-to-apples comparison. And ultimately, it hurts the consumer…the things that come out of people’s mouths in competitive situations is pretty frustrating, and it’s plagued our industry.

Tom Toole

Lazine then brought up a spokesperson for Homes.com calling Eales “defamatory and frankly desperate.” Eales responded to that with, “The best defense is truth. And we’ll keep on articulating the truth of the matter.” 

Tune in to hear the full conversation, along with these topics: 

  • 47:37 Realtor.com’s alignment with NAR and MLSs 
  • 50:45 NAR’s advertising campaign & Hulu series
  • 55:31 The problem of generating seller leads through portals 
  • 58:15 Relationship with Follow Up Boss CRM