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.

Opendoor is not alone in wanting to build a supply of exclusive inventory to draw consumers to its private platform.

 
 

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.

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.