Opendoor recently announced a merger with a special purpose acquisition company (or SPAC) Social Capital, a venture fund headed by rockstar VC Chamath Palihapitiya. This partnership puts the pioneering iBuyer on the same playing field with Zillow. And the battle between the two will be epic.

On this episode of Industry Relations, Rob and Greg are discussing what the competition between Opendoor and Zillow means for consumers, real estate agents, and the industry in general. Rob explains Zillow’s advantages in terms of customer acquisition and monetizing seller leads, and Greg describes Opendoor’s leverage when it comes to operational excellence (otherwise known as ‘eating BPS for breakfast’).

Rob and Greg go on to consider how Opendoor might catch up with Zillow when it comes to lead flow, either through an additional acquisition or by working with the industry. Listen in for insight around how this battle of the market-makers will make it easier to buy and sell houses and lower transaction costs—and how that will impact the real estate industry as a whole.

What’s Discussed: 

The benefits of a merger between Social Capital and Opendoor

What competition between Opendoor and Zillow means for consumers

Zillow’s advantage in terms of consumer audience and monetizing seller leads

Opendoor’s advantage when it comes to operational excellence

Rob’s prediction that Social Capital might also acquire either Redfin or Realtor.com

How Opendoor might work with the industry to generate lead flow

How competition between Opendoor and Zillow is likely to impact real estate as a whole

–Easier to buy and sell houses (mobility)

–Much lower transaction costs

How MLSs might change if transactions double while commissions are cut in half

Greg’s take on why it’s a great time to be a real estate agent

Connect with Rob and Greg:

Rob’s Website

Greg’s Website

Email gregrobertson@gmail.com

Resources:

‘Yelp: Nearly 16,000 Restaurants Have Permanently Closed Due to COVID’ in QSR

Social Capital

The Social Dilemma

Opendoor’s Merger with Social Capital

Rob’s 2014 Blog Post on Opendoor

iBuyer Connect

Stratechery’s Interview with Rich Barton

Social Capital’s 2019 Investor Letter

SimilarWeb

Opendoor’s September 2020 Investor Presentation

Rob’s Thought Experiment on Real Estate Agents & Productivity

The Art of the CMA by Greg Robertson

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Zillow Offers Will Expand Services in 2021 to Simplify Customer Transactions

“Starting in January 2021, customers in Atlanta, Phoenix and Tucson who sell homes through Zillow Offers will work directly with trusted, licensed employees of Zillow Homes, a licensed brokerage entity. Zillow-owned homes in these markets will be listed for sale by licensed Zillow Homes employees. The company expects to expand these services to additional Zillow Offers markets later in 2021.”

Zillow is now Redfin

As part of streamlining its operations and services, Zillow is also simplifying the way it collects listing data, moving from thousands of disparate data feeds to MLS Internet Data Exchange (IDX) feeds, which are offered directly through MLSs to their members. These direct listing feeds will help Zillow’s goal of offering its 200 million unique monthly visitors the most up-to-date and comprehensive listing information possible.”

Zillow gets IDX feeds.

Now sure if this will be just for the 3 markets they talked about or all markets. My guess is that Zillow already has broker licenses in all 50 states.

These additional services are expected to expand opportunities for buyers, sellers and agents. Zillow Homes will be the brokerage of record for Zillow Offers transactions. All Zillow-owned homes will be listed in MLSs, with commissions paid to agents representing buyers. The company will also continue to invest in and expand its Premier Agent business and partnerships, including connecting other interested buyers and sellers to Zillow Premier Agents, which is expected to be the preference of the majority of Zillow’s customers.

Zillow will play nice…for now.

I know the industry is going to have a collective shit-storm over this, with accusations of ” Zillow said they would never become a broker!” bullshit.

Can’t we all just get over this? The biggest news I see here is Zillow, with all their APIs, machine learning, artificial intelligence, site visitors, and algorithms woke up and realized when it comes to buying and selling a home….you need a human being to get it done. That’s a win.