Theoretically, you're picking off improperly priced homes and quoting a tighter buy/sell spread, so you aren't buying higher than the "market" price. The seller/buyer is the one crossing the spread.
In practice it seems like something isn't properly hedged so Opendoor and a lot of other iBuyers are exposed to the underlying asset rather than just capturing the spread and picking off incorrectly priced homes. That's why you see their margins go up when housing does well and down when housing does poorly. A proper market maker should have no exposure to the underlying (e.g. market makers made record profits in 2020 despite equities tanking). I bet if a Wall Street quant firm came in they'd roll over Opendoor and the like.
I bet Wall Street quant firms don't operate on individual houses for a reason, because it's too illiquid and non-fungible for someone to be a proper market maker.
In practice it seems like something isn't properly hedged so Opendoor and a lot of other iBuyers are exposed to the underlying asset rather than just capturing the spread and picking off incorrectly priced homes. That's why you see their margins go up when housing does well and down when housing does poorly. A proper market maker should have no exposure to the underlying (e.g. market makers made record profits in 2020 despite equities tanking). I bet if a Wall Street quant firm came in they'd roll over Opendoor and the like.