CoStar Group Completes Strategic Real Estate Tech Consolidation with Homes.com Acquisition

CoStar Group (NASDAQ: CSGP) has successfully finalized its purchase of Homes.com for $156 million in cash, following Federal Trade Commission approval. This move represents a significant shift in how the company plans to reshape the residential real estate marketplace, building on its 2020 acquisition of Homesnap to create an integrated ecosystem for agents, buyers, and sellers.

A New Marketplace Philosophy

The strategic rationale behind this consolidation reflects a fundamental rejection of the current industry model. Rather than extracting agent commissions or generating revenue through lead monetization—a practice that creates misalignment between platforms and professionals—CoStar Group is positioning itself to operate what it calls a “next generation marketplace.” The company plans to discontinue Homes.com practices that contradict the principle that agents own the leads generated by their own listings.

Andrew C. Florance, Founder and CEO of CoStar Group, emphasized that real estate agents participate in approximately 90 percent of home sales transactions. The new approach respects this reality by matching buyers with agents based on expertise rather than willingness to pay for leads. This model fundamentally differs from other platforms that have attempted to disrupt and monetize agent-client relationships.

Integrating Two Complementary Platforms

Homesnap, acquired in December 2020, functions as a professional-grade productivity and management tool relied upon by hundreds of thousands of agents nationwide. Homes.com, by contrast, serves as the consumer-facing portal where home seekers access property information and connect with professionals. By merging these two platforms, CoStar Group creates a direct pathway: agents manage listings and marketing through Homesnap while buyers interact with properties and professionals through Homes.com.

This integration eliminates the traditional intermediary layer. Agents will gain instant access to manage listings, respond to buyer inquiries, collaborate with clients, and oversee digital marketing campaigns—all within a unified system. CoStar Group notes this agent-to-consumer portal connection represents a unique positioning in the industry.

Leveraging Existing Infrastructure

CoStar Group brings substantial competitive advantages to this consolidation. The company already operates multiple sector-leading online marketplaces—including LoopNet, Apartments.com, and numerous rental platforms—that collectively attracted over one billion visits in the prior year. Its in-house team of hundreds of architectural photographers specializes in high-quality property imagery, 3D virtual tours, and aerial photography that has historically elevated how properties are presented to potential renters and buyers.

The company plans to apply this existing content and traffic-generation expertise to Homes.com while leveraging its established real estate sales force to expand Homesnap’s agent user base substantially.

Financial Expectations and Transition Costs

CoStar Group projects that Homes.com will generate approximately $10 million in incremental revenue during 2021, though the company simultaneously expects approximately $15 million in negative adjusted EBITDA for the same period. This negative adjustment reflects the intentional revenue impact of transitioning away from the previous business model—a short-term financial sacrifice made to support the long-term strategic repositioning.

The combination of Homes.com and Homesnap marks a deliberate bet that the residential real estate market is ready for a platform designed around agent empowerment rather than agent disruption, with CoStar Group positioned as the provider of that alternative.