CoStar CEO Targets Zillow in Open Letter, Escalating Industry Battle Over Listings and Leads
CoStar Group CEO Andy Florance has taken a bold step in the ongoing battle for dominance in the residential real estate space, sending a sharply worded letter to tens of thousands of real estate agents across the U.S. The message positions CoStar’s Homes.com platform as a clear alternative to Zillow—and paints Zillow as a threat to agent-client relationships.
In the letter, Florance outlines several key concerns:
- Lead redirection: He accuses Zillow of diverting leads away from listing agents and selling them to competing agents. This long-standing practice is a top complaint among Realtors who feel undermined by the very platforms showcasing their listings.
- Data monetization: Florance argues that Zillow’s business model is built on exploiting MLS data provided by agents, then reselling access back to the same professionals who supplied it.
- The Homes.com difference: He emphasizes that Homes.com will never sell leads and instead uses a “your listing, your lead” model—meaning all inquiries go directly to the listing agent, with no middleman or rerouting.
- Rapid growth: CoStar reports that Homes.com has now reached 100 million monthly unique users, putting it in a stronger position than ever to compete with Zillow’s estimated 200+ million.
This letter comes at a time when listing transparency and control are already under the microscope due to policy changes tied to the Clear Cooperation Policy and the aftermath of the NAR commission lawsuits.
Industry implications: Florance’s message is both a sales pitch and a rallying cry—urging agents and brokerages to choose platforms that support agent-centric models. It’s also a direct shot across Zillow’s bow, signaling that Homes.com intends to claim a much larger share of market influence in 2025 and beyond.
Seattle Startup ‘Friday Harbor’ Raises $6M to Arm Independent Lenders with AI Tools
Friday Harbor, a fintech startup based in Seattle, just raised $6 million in seed funding to help small and mid-sized mortgage lenders keep pace with industry giants like Rocket Mortgage and United Wholesale Mortgage. The company’s flagship platform uses artificial intelligence to automate loan file reviews and detect underwriting issues earlier in the origination process.
Founded by fintech veteran Theo Ellis, Friday Harbor’s mission is to level the playing field in mortgage lending by giving independent lenders access to enterprise-grade technology without the need for massive internal development budgets.
What Friday Harbor’s platform does:
- Automated issue detection: The system analyzes documents, income history, deposits, and credit reports to flag potential problems—such as large deposits, unverified income, or inconsistent employment data—before the file reaches underwriting.
- Reduced file “touches”: By surfacing issues earlier, loan officers and processors can reduce the back-and-forth typically needed to clear conditions, improving turn times and reducing stress.
- Enterprise traction: Friday Harbor is already working with lenders like PRMG, NewFed Mortgage, and Developer’s Mortgage Company. The startup has secured $8 million in total funding and plans to expand its integrations with LOS platforms later this year.
Why it matters: In today’s high-cost, low-margin lending environment, operational efficiency is a competitive advantage. Friday Harbor’s AI engine gives smaller lenders a way to cut costs, improve speed, and reduce repurchase risk—three factors that can make or break performance in today’s market.
Real Estate-Related Stock Performance (as of April 15, 2025)
- Zillow Group (ZG): $61.97 ▲ 0.4%
- Rocket Companies (RKT): $12.80 ▼ 0.4%
- United Wholesale Mortgage (UWMC): $4.67 ▼ 0.8%
- Lennar Corp (LEN): $105.96 ▼ 0.1%
- D.R. Horton (DHI): $120.69 ▼ 0.3%
Markets are quiet overall, but Zillow is seeing a slight bump following the CoStar story and ongoing attention around listing control and platform dynamics.
Loan Officer’s Perspective: Tuesday = Active Transaction Updates + Realtor Conversations
Tuesdays are the perfect time to strengthen your Realtor relationships while also making sure your active loans are moving forward smoothly.
Here’s your focus today:
- Provide status updates to all parties in current transactions—buyers, listing agents, and selling agents.
- Set expectations and proactively manage timelines on appraisal, conditions, and closings.
- Use today’s Zillow/CoStar story to spark conversations with your Realtor partners:
Suggested script:
“Hey, did you see that open letter CoStar sent out about Zillow? It’s really sparking a lot of conversation about who controls the client relationship and how platforms are treating agents these days. What are your thoughts on it? Are you seeing more activity from Homes.com in your market?”
This kind of industry-relevant discussion can:
- Deepen your value as a knowledgeable partner.
- Set you apart from loan officers who only talk about rates.
- Position you as someone who’s tuned into what matters to them.
And if you’re unsure how to structure your day or what to say, don’t forget that the Mortgage Marketing Animals’ Daily Success Plan gives you the roadmap.
Visit DailySuccessPlan.com to learn how we can help you get more business on a consistent basis—by doing the right activities, the right way, every day.