No more checkbox
This money is directed at one thing: creating a new real estate mousetrap.
Opendoor, you will recall, is the startup that buys homes from people at a price determined by data wizardry, and closes them in as little as three days. Sellers pay a premium — fees reportedly range from 6-12% — for that certainty and speed.
Having taken ownership of the home, Opendoor then sells it, sometimes through co-brokerage, sometimes not. They do cool stuff like letting buyers into listings on their own, without an agent, and offer a 2-year warranty and 30-day “buy it back” guarantee.
They’ve bought and sold several thousand homes this way since launching almost two years ago, so unlike many other startups elevated beyond their significance by the real estate hype machine, Opendoor feels like something worthy of our attention.
But what do we make of it?
Well, we can easily, and perhaps correctly, say that Opendoor will always be a niche play, that most people will always want the personal touch of a real estate agent, and the opportunity for a “real” market price that meets their most optimistic expectations.
We can also say — as I have myself — that the fact that Opendoor is charging sellers more than the traditional 5-6% hardly seems innovative or consumer friendly.
And of course we can also write the whole thing off as just a matter of smart people with too much money and too little humility.
We certainly could do this. But…
Unlike Compass, another real estate startup with a stratospheric valuation, I think this could be a case where the team actually figures it out as they go along. Opendoor’s executive chairman, Keith Rabois, was one of the formative players at both PayPal and Square and is viewed with godlike reverence in tech circles. A look further down the org chart reveals a team rich in product, marketing, data science and real estate experience.
It is unlikely that Opendoor’s vision is limited to making real estate transactions faster — which seems to be the focus thus far. Big-thinking people like Rabois must be intent on making the process cheaper as well. I also think that’s the only way to get more than just a small percentage of consumers to use them: Faster, cheaper, better.
Lastly, we should at least study them dispassionately as they go along. There will be a lot to learn, whatever happens. Think about Redfin here. Even if they never realize their grandest ambitions and eventually get digested by some soul-strangling private equity machine, they have given the rest of the industry so much to go to school on!
So, my take? Don’t freak out about Opendoor, and don’t dismiss them either. Just pay attention.
Inman is reporting that Realtor.com unloaded TigerLead, the agent lead-gen and website company it bought just a couple years ago.
I have no idea what this means…which, now that I think about it, is kind of interesting in itself.
Two years ago, Move was the portal that believed in B2B software while Zillow eschewed it. But recently, it’s been Zillow making the most noise here, buying Dotloop and building out mobile software for their agent advertisers.
Move picked up Reesio, a small transaction management startup, in the immediate aftermath of the Zillow/Dotloop deal, but that’s about it.
Move has been pretty quiet across the board, in fact. Is this calculated? Are we (myself included) just Zillow-obsessed? Or are we witnessing a market reality: The category is cooked and Zillow’s the winner?
If you did not catch this piece on Inman right before Thanksgiving, take a minute to read it:
There’s so much revealed here. So much left unsaid. So many implications.
Nothing wrong with what CRMLS is doing — I admire it, in fact — but I could write another 1,000 words on all the wrinkles here.
But I won’t. So read up and enjoy the weekend!
Smart industry takes and creative inspiration.