Zillow has reached an agreement to acquire HotPads, a map-based rental housing and real estate search engine, for $16 million.
This is Zillow’s first acquisition of a primarily consumer-facing company, but it’s sixth in the last two years. The transaction is expected to close in the fourth quarter of 2012.
“This acquisition represents a significant step-change for Zillow Rentals, allowing us to dramatically increase the number of leads we send to landlords,” said Spencer Rascoff, CEO of Zillow. “HotPads has a younger, complementary and rental-focused audience. Now, Zillow will become even more relevant to consumers at the beginning of their real estate life cycle.”
Approximately 2.8 million users visited the HotPads website in October to explore their home buying options, primarily for rental properties. Nearly 70% of all listings viewed during the month were homes or apartments for rent.
The addition of HotPads will allow Zillow to expand the size of its rental audience. Last month, the Seattle-based real estate information provider launched a free suite of tools for rental professionals, which includes listing distribution across the Zillow Rental Network that also included Yahoo! Homes. Three months ago, Zillow acquired RentJuice which led to the foundation of Zillow Rentals.
To make the housing search experience easier for buyers and rental professionals, one feature of the HotPads website is a map-based search that enables consumers to switch between homes on a map while simultaneously viewing their photos and details.
Additionally, the website offers consumers a buy vs. rent option where they can look for homes for sale and rent alongside each other on the map and compare costs on a monthly basis. Also, buyers can draw custom search areas letting them receive search alerts pertaining to the exact areas they want to live in.
Lastly, with the HotSpots feature, prospective homebuyers can quickly look for listings with the highest or lowest prices, or get an overview of affordability across a particular metropolitan area.
“At HotPads, we’re passionate about empowering people with tools and information to help them find the right place to live, and we have always admired Zillow’s similar vision,” said Matt Corgan, co-founder and CEO of San Francisco-based HotPads in a press release. “Combining Zillow’s toolkit for owners and managers with an unmatched community of new tenants‑across Zillow, Yahoo! And HotPads‑we believe will enable the first true marketplace at scale for rentals.”