The June LANDTHINK Pulse revealed that 38.9% of respondents think the acquisition of LandWatch by CoStar Group will have “no effect” on land brokers. Though the majority of June Pulse respondents were seemingly unmindful or indifferent to what the acquisition could bring to land brokers, the results also indicate brokers across the country are expecting to feel the kickback from the acquisition.
In early spring, CoStar Group Inc., a provider of commercial real estate information, analytics and online marketplaces, formally announced their acquisition of LandWatch.com, a listing site dedicated to land and rural property for sale. Prior to the acquisition, CoStar owned and operated LoopNet, LandandFarm.com and LandsofAmerica.com. The LandWatch acquisition strengthened the company’s penetration in the rural land for sale market space, with CoStar now controlling three of the four top-tier online land for sale listing sites.
Two months have now passed since the acquisition and the sentiment- at least among respondents harboring strong convictions on the issue- is vastly negative. Nearly everyone who answered the Pulse last month left a comment, helping us unravel the results and be able to accurately disclose to our audience the reasoning behind the results. Of all the comments received, 51% complained about the acquisition likely leading to price increases and/or the making of an industry monopoly. Many real estate professionals are already incensed by the pricing structure.
Comments received that concerned pricing included:
“Costs are going up and exposure will go down. The big corporate mentality is coming to land brokerage.”
“CoStar is an expensive program to join. I look for properties for myself and my clients, and I do not want to have to join this group. In fact, I will not! I will find other avenues!”
“Will make agents’ costs rise.”
“CoStar is difficult to deal with and expensive.”
Comments concerning monopolistic enterprise included:
“CoStar is creating an online monopoly. Good for them, bad for us.”
“It gives them a monopoly on advertising land and acreage. I had a contract with LandsofAmerica.com last year, and this year, because they have bought LandandFarm.com and are rebranding as Land.com, they have jacked the advertising cost up.”
“Less competition is bad for the consumer. In this case, land brokers.”
“Getting close to a monopoly of the online land-for-sale market. Already seeing their ad prices jump higher on LAF and LOA”.
“With one company trying to make a monopoly on the land sales website market, it will impact how the whole system is used. Everyone knows if you want to find the answer you have to follow the money, and the money leads back to advertisements and further trying to make everyone selling land comply and pay.”
“CoStar will apply their business philosophy of ‘control the market’ and will make the rules, and real estate professionals will have fewer choices to promote product.”
“They are buying the market, decreasing competition.”
Last month’s Pulse asked: What effect will CoStar’s acquisition of LandWatch have on land brokers? Our informal online survey revealed that 38.9% of those responding said the acquisition would have NO EFFECT on land brokers. This was followed closely by a strong 25.2% of our audience that thought the acquisition would have a VERY NEGATIVE effect on land brokers, and 14.8% said the acquisition would have a SOMEWHAT NEGATIVE effect on land brokers. A scant 9.7% said the acquisition would be VERY POSITIVE for land brokers.
Some favorable comments about the acquisition were:
“Hopefully positive, I have never heard of CoStar before.”
“Better, useful information that can be quickly accessed.”
“Larger network to commercial brokers.”
General comments included:
“Acquisitions only benefit a few, never the consumer.”
“Bigger isn’t always better. In getting big, you lose contact with the nuances of the market.”
“CoStar will try to bully brokers into using their service, just like they do in the commercial arena. The only difference I see is that there are currently other good options.”
Only time will reveal the effect of the acquisition on land brokers, but in the meantime, CoStar isn’t the only game in town. LANDFLIP, all-new and better than ever, now stands alone as the only top-tier network of land for sale sites still privately owned and operated by former land brokers. The LANDFLIP NETWORK is not a real estate behemoth, but bigger isn’t always better. We’re zeroed-in on innovating the way people buy and sell land online, bringing an exceptional user experience to land buyers and sellers, and on the betterment of the land industry as a whole.
Here’s how the Pulse results panned out:
- 38.9% said the acquisition would have NO EFFECT on land brokers
- 25.2% said the acquisition would have a VERY NEGATIVE effect on land brokers
- 14.8% said the acquisition would have a SOMEWHAT NEGATIVE effect on land brokers
- 11.4% said the acquisition would have a SOMEWHAT POSITIVE effect on land brokers
- 9.7% said the acquisition would have a VERY POSITIVE effect on land brokers
We were pleased with the large number of Pulse responses, and we thank everyone who participated, chimed in, and shared the Pulse on social media! LANDTHINK would like to extend a big thank you to the LANDFLIP NETWORK for sponsoring the June Pulse. The LANDFLIP NETWORK is currently comprised of LANDFLIP and its 4 complementary land for sale websites, FARMFLIP, RANCHFLIP, LOTFLIP, AUCTIONFLIP, and LANDTHINK, which provides land-focused knowledge, ideas and networking opportunities to land professionals and enthusiasts.
We are excited to announce that RecLand Realty, the Buck Commander® and Duck Commander® endorsed land broker based in Monroe, Louisiana, has signed-on to sponsor the August LANDTHINK Pulse! September sponsorship is still available, and it’s a great way to ensure your brokerage is the first one buyers and sellers call when they have a need to buy or sell property. You’ll get insane exposure on Social + Email + Web. That’s 500,000+ monthly eyes on you! Once you have it, you won’t want to give it up! Pulse sponsorships are offered on a first come first serve basis and are subject to certain limitations. If your business would be interested in sponsoring the September Pulse question, please contact us soon.
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