Marketplaces, Lead Generation, and Brokerages

Because Zillow’s main customers are agents, it can’t cut them out of the transaction, and ends up paying over 50% more than Opendoor on agent commissions. To lower this cost, it would have to risk pissing off the people who pay it the marketing fees that drive the majority of Zillow’s revenue and margin.

Zillow uses agents and Opendoor sells homes itself. Because of that, Zillow has structurally higher costs, and it can’t collect the kind of data that Opendoor can, like how many visits it takes to sell a house in a particular microneighborhood.