The Opendoor MLS
Tucked away in Opendoor's recent earnings call was an enlightening statement by its CEO, Eric Wu, which sheds light on its exclusive supply strategy .
Why it matters: Exclusive content is a strategy being driven by VC-funded real estate tech disruptors, with important implications for consumers and a spotty track record of success.
-
A possible endgame for Opendoor is to match exclusive supply with demand directly -- off the MLS -- through an Opendoor ecosystem.
The benefits to Opendoor are clear: avoiding agent commissions, controlling the consumer experience start to finish, and streamlining the sales process.
-
Remember when Zillow thought Opendoor was an existential threat to its business ? This is why.
Opendoor is not alone in wanting to build a supply of exclusive inventory to draw consumers to its private platform.
-
Another VC-funded disruptor, Aalto, is a private marketplace that doesn't rely on the MLS .
Compass also uses exclusive content to drive consumers directly to its platform, a clear endgame for the business .
-
Compass encourages sellers to list exclusively and privately on its platform.
-
Nearly a quarter of Compass' current listings are exclusive; a homebuyer has to call a Compass agent for access.
Yes, but : This isn't new.
-
These models are similar to the recently defunct REX , which, starting in 2015 and with over $100 million in venture capital, was the "first full-service real estate agency that does not use the MLS ."
-
REX eventually bit the bullet and joined several MLSs in late 2021 , before closing up shop in early 2022.
The rise of exclusive content in real estate risks fragmenting the search and discovery process -- with considerable implications for consumers.
-
Buyers lose easy access to a complete view of the market by being forced to visit multiple sites (or call an agent like it's 1995).
-
For sellers, it fragments and artificially reduces the number of possible buyers, which could lead to less demand and a lower price for a property.
The bottom line : There is incredible value to whoever controls the home search platform. In the U.S., that's Zillow, realtor.com, and hundreds of MLSs.
-
New platforms -- leveraging exclusive content -- are a significant threat to these incumbent platforms.
-
And so far, the benefit to consumers is questionable.
Go deeper: I've previously explored this topic in my Strategic Analysis of The Top Threat to Real Estate Portals . Spoiler alter: It's exclusive content .
This analysis looks at several case studies from around the world.