We spotted the following video on Bloomberg West where some of the Silicon Valley’s successful VCs have invested in a company called OpenDoor. The company plan to offer a service to buy homes in 30 seconds.
The idea sound a bit amusing and unbaked since majority of the sellers we meet want to sell their home at the highest price possible. And ironically these sellers are even wiling to wait a few weeks to reach their goals.
This company is aiming to revolutionize the real estate industry. But as you can see in this video the company’s founder is rather unfair when trashing Trulia and Zillow as if they don’t use “DATA” . His claim that his company is the only company who uses data algorithms to price homes is false. Contrary to OpenDoor Founder’s claim Zillow and Trulia also use advanced algorithms to appraise homes. But as we have written before in our blog, the these algorithms get the basics wrong when it comes to floor plans and the number of rooms in these homes. Even banks use algorithms for home appraisals. But when it comes to final pricing, they order Broker Price Onions from real estate agents like us who know the market.
But let’s assume tha OpenDoor takes the data analytic further than Trulia and Zillow have done. What will they do about million pages of disclosures and legal requirements that change from State by State and region by region. But we hope OpenDoor solves this problem as well as other challenges in Real Estate which needs huge injection of technology.
However, we believe that even if OpenDoor solve the pricing problem it will be the wrong problem to solve. WebVan folks were trying to revolutionize the grocery market and they learned the hard way that grocery delivery is not the main problem consumers face.
What do you think?