Portals are ‘increasingly closing their ecosystem’: Realtor.com CEO 

ORLANDO — Realtor.com's CEO sees two major challenges — and potential opportunities — for the real estate industry today: artificial intelligence and the "topic du jour" that is market fragmentation.

Since Damian Eales began leading the listings portal nearly three years ago, Realtor.com has focused on supporting Realtors and rediscovering its position as a leader for positive industry change, he told real estate executives at the T3 Sixty Leadership Summit on April 23.

But Eales also made a point of expressing frustration that the industry isn't putting more resources into solving the housing affordability crisis — and called other major industry players to action.

Finding opportunity in AI

So far, the launch of AI tools like ChatGPT has not led to a decline in real estate website traffic, Eales said. But it's still important for companies to embrace AI models as they become more prevalent — after all, that's "where the eyeballs are."

Companies that get it right will "grow faster, generate more revenue, invest more," Eales said — and they will "not have to shrink" to grow their AI capabilities.

Rocket/Redfin has taken 'the road to Damascus'

The Australian native praised the American real estate industry for its balanced and open marketplace — and condemned recent efforts to fragment it.

"I look at Zillow and Rocket/Redfin and they're increasingly closing their ecosystem to become that one-stop shop, to take the benefit of the MLS and then direct all of the business, all of the value chain through that single company," he said.

Eales contested a recent declaration by Rocket's CEO about the state of the industry, arguing that it is not, in fact, "broken."

"I saw that and I thought, 'Wow, that is the Rocket/Redfin road to Damascus."

Acting 'in the better interests' of buyers

Eales wondered aloud what former Redfin CEO Glenn Kelman, "one of the greatest advocates for open marketplaces," would say about "ending the asymmetry of information, which really disadvantaged many in the marketplace" — an apparent reference to Rocket's February deal allowing Compass' "Coming Soon" and "Private Exclusive" listings to be displayed on Redfin.

Rocket "has said, 'Well, forget all of that, we're resequencing our DNA because we're a mortgage company, first and foremost,'" Eales said, a position he found "entertaining."

Realtor.com's own pre-market partnership with eXp Realty is not an exclusive one, unlike the Compass-Redfin deal, Eales noted — meaning listings can be distributed to competitor portals if they agree to the established terms.

"We think we're acting in the better interests of all buyers," Eales told Real Estate News in a separate conversation. "We think that should be the true north in the industry."

MLSs need to show more initiative

Real estate professionals should celebrate the accessibility of information that the MLS has created instead of bashing the industry, Eales argued. By hiding listing information from buyers, he warned, the industry may be setting itself up for future litigation.

The industry should be proud that consumers largely listen to their agent, he said. But agents must uphold their fiduciary obligations to their clients — which, he suggested, often means marketing to the widest possible audience.

"Organizations like HUD are putting a very close lens on the extent to which people are starting to hide information," Eales said. "We should not be hiding information from people who are about to make the most important purchase of their life. And quite frankly — if people don't find it on Redfin, they're going to go somewhere else."

MLSs should "of course" set rules, Eales said — "it's a 'cooperative,' it's not an 'uncooperative'" — but he added in his conversation with Real Estate News that he wants MLSs to respond to the growing call for pre-marketing by establishing their own coming-soon policies — if they don't already have them.

"If they do that, then a lot of these other opportunities — whether it be Zillow Preview or what Compass and Rocket are doing — really go away."

Focus on housing affordability is crucial

Eales is frustrated that so much time and energy has already gone into the pre-marketing conversation while housing affordability challenges persist.

If the industry instead "joined forces" and focused its energy, power and influence on the housing supply crisis, "I think that we would be celebrated as a power of good change, rather than the power for regressive change," he said.

Eales personally committed $1 million to launching a marketing campaign aimed at building more homes in America — and if other CEOs want to commit to the cause, even better.

"I'm going to challenge you: T3 Sixty should pull together me, Jeremy [Wacksman], Andy [Florance] — he'd do it. Varun, Gary [Keller], Bill Pulte, Robert [Reffkin] — he'd do it," Eales said.

"I think we all agree on the fact that America needs to build more homes."

Editor's note: Real Estate News is an editorially independent division of T3 Sixty.