Opendoor says open sesame to home sellers
This is the second in a series of articles about iBuyers. IBuyers are the latest iteration of change in the Atlanta real estate market and use technology as an alternative way of selling your home. Atlanta is ground zero in war among iBuyer Brokers: Knock, Opendoor and Offerpad. This article is part of our iBuyer series:
How much are people willing to pay to eliminate the inconvenience and uncertainty selling their home? Does it make a difference if the cost of selling a home is added in a fee versus a discount on the price of the home? From what I can tell the OpenDoor discount comes in the form of a fee.
Inman News took a look at iBuyer Opendoor and in an interview with Zillow CEO shared the following:
Opendoor’s focus is on “building the best experience at the lowest possible cost,” and the more the company can succeed at this, the more homeowners will flock to it, Wu [ Opendoor CEO Eric Wu] said.
The cost of convenience: Opendoor is currently charging a service fee of about 7 percent, down from 9 percent not long ago. It claims around 7,000 “happy customers,” and is on pace to buy about 400 homes this month, according to Wu.
The startup has raised more than $320 million in equity funding, as well as $400 million in debt to purchase properties.
It’s buying homes in Phoenix, Dallas-Forth Worth, Las Vegas and Atlanta, and is hiring in Tampa, Florida; Orlando, Florida; and Raleigh, North Carolina.
Question – Who sets the price of the home? How do you determine what a starting point is for the 7% “fee”, There seems to be great uncertainty in what constitutes the fair market value of a home if it is not tested in the marketplace.
Home sellers will ultimately determine if the ease and convenience of using OfferPad to purchase their home is worth it. Wall Street is betting yes is the answer. But Wall Street also bet yes on America On Line (AOL)
By Tim English, Marketing Manager and Realtor, Sally English and the English. Tim has been active in the Atlanta residential real estate marketplace since 1982 as a developer, builder, investor and Realtor. He holds an MBA with concentrations in Finance and Real Estate from Columbia University and a BE in Chemical Engineering from Vanderbilt University. Tim and Sally are married and have three adult children. They live in Northeast Atlanta in a neighborhood convenient to Emory, CDC and CHOA.