We’ve all seen the reports about the multiple offers on homes for sale in gateway cities and the sunbelt. COVID has accelerated that scenario to markets throughout the United States and abroad. It’s not unheard of for a property to get 20 offers in a weekend upon becoming active. Most, if not all, of the offers will be for prices over the asking price with contingencies removed.
Now for people unfamiliar with contingencies, these are the clauses that allow a perspective buyer to exit a contract without penalty. Some of the major contingencies are:
2. Home Inspection
3. HOA | Condo Association Document Review
4. Well and Septic for Rural Properties
There is also intense competition and consolidation between brokerages in the residential real estate sector. Remember EXP, Zillow and now Compass have all gone public, with large teams choosing to join their brokerages. This too is putting pressure on legacy brokerages to retain talent given that their compensation models are based on a different time.
Commercial real estate data giant CoStar has not sat by watching. They have jumped into the fray in a big way. Remember they purchased the residential real estate platform Homesnap in 2020 for $250 million. Prior to that acquisition there was an offer to purchase RentPath for $585 million that did not close due to regulatory opposition. Some people familiar with the consolidation in the commercial real estate sector with CoStar being the dominant data provider, see that trend happening in the residential sector.
Also remember Zillow bought Showing Time for $500 million. This is the app that allows realtors to schedule showings for properties on the market and thus has tons of data going back years.
CoStar’s apparent quest for real estate data dominance continues in 2021 with their new offering to buy the residential real estate platform Homes.com. This is a well-known platform to realtors and many of their buyers. Costar is offering $156 million in cash for the acquisition.
Real estate is in play in a big way and it’s not just for buildings and land. It’s for control of the data. Someone said data is the new oil. If that’s true, and I agree that it is a key component, then CoStar is demonstrating its’ intent on playing to win.