Possible new RE Startup called Opendoor

[Kwambe H.]

I noticed an interesting article come across venturebeat today about a new startup that supposedly will make buying/selling homes easier. Being an IT guy and budding investor/entrepreneur, this article piqued my interest. Here's an excerpt that I thought was interesting:

"The startup will “work with sellers directly to purchase home[s],” “work with local partners to rehab, maintain, and improve our portfolio of properties,” and “partner with local brokers and Realtors to market, list on [the multiple listing service], and resell to retail buyers and investors,” according to the site online now at opendoor.com."

Although I'm still learning the ropes when it comes to wholesaling, it would seem to me that this could serve as direct competition to wholesalers. There isn't much info out on the business, so I'm not sure if the business functions within the wholesaler role only, or if just offers an environment for the seller/wholesaler/buyer to interact amongst one another. I was just curious if anyone knew/heard anything about this startup, or had any thoughts on what something like this could mean for the industry if it were to become successful.

Here's the link to the VentureBeat article.

To the mod gods: I posted the link for the sole purpose of discussion. It was not my intention to promote anything outside of said discussion.

Thoughts?

[Grahm Nash]

OpenDoor is HomeVestors, with better funding, better AVMs and thinner margins. 

While OpenDoor will not replace wholesalers, they will make tight markets even tighter - especially in non-disclosure states where accurate comp data is difficult and expensive to obtain - and skinner margins even thinner. 

For a while. Then they will run out of money and fizzle.

A similar effect occurred when Zillow entered the market. Everyone got excited, Zillow was going "disrupt Real Estate," and "change the paradigm," and all the other marketing BS the techno-weenies in Silicon Valley spew about Real Estate (and every other cause celeb bandwagon they jump on trying to make a buck by automating everything - anyone remember web-based grocery deliveries?) BECAUSE THEY DON'T HAVE A CLUE ABOUT HOW REAL ESTATE WORKS IN THE REAL WORLD. 

What lasting effect has Zillow had on the market? Not much, other than to provide one more hurtle investors and Realtors have to overcome when instructing sellers on the true value of their home. "No ma'am, your home is NOT worth 110% of ARV simply because it is yours and it smells like your wet dog."

OpenDoor is already facing huge Realtor backlash (one recently told me "No one in our office will show an OpenDoor listing.") both online and off. That will only grow. And home-sellers desperate to sell will initially light up OD's switchboards - and then blast them on Yelp when they get offers blindly emailed to them that are at the high end of the wholesale spectrum, but without the kiss (building rapport) first to make it palatable.

So go to your local REIAs, talk your wholesalers friends down off the ledge, educate your fellow Realtors and investors, lean your shoulders into this small rain shower, and remind yourself that the "disruptive storm clouds gathering in the distance" are little more than 15 minutes of fame rain shower that will quickly pass over us and then allow us to get back to work.

If there is anything else I can to help you grow your business, please let me know.

Very Best,

-G