REAL ESTATE ONLINE
January 1, 2018
Broker Development, Opendoor.com
I’ve worked in “traditional” real estate for over 30 years. Over the past few years, I’ve seen a noticeable shift to the consumer in our industry. I have a great respect for tradition, but I also know that real estate is all about the people we serve. People want everything easier and faster than I can ever remember, and it’s typically delivered by technology.
I heard Eric Wu’s story and it peaked my interest. Eric Wu is an Arizona native who bought his first home at 19 years old and he was immediately hooked on real estate. By the time he was 25, he purchased over 20 homes. Eric joined the club of people who spend enough time immersed in real estate to know that the Multiple Listing Service (MLS) isn’t an up-and-coming soccer league, PITI no longer means a feeling of sorrow and compassion for others in pain and TLC isn’t a 90’s female R&B group.
Fast forward to 2014. Eric started and sold two tech real estate companies fueled by what was possible at the intersection of real estate and technology. He then embarked on his biggest endeavor to-date by founding Opendoor.com
The Opendoor model is growing and currently active in 6 U.S. cities. The markets include Phoenix, Dallas/Fort Worth, Las Vegas and Atlanta. In November of 2017, Orlando and Raleigh, North Carolina were added as well. The plan is to expand to several more markets in Q1 2018 and multiple new markets by the end of 2018.
Since companies like Opendoor launched, it has introduced a different sort of delivery of the residential real estate transaction. The model is designed to deliver a fair market value offer to sellers within 24 hours of requesting one online. Opendoor purchases properties as a cash buyer. As the seller, we look to simplify the buying process by making our 500 listings available to buyers and real estate agents. Showings can be held everyday from 6am to 9pm via an app. In 2017, title and mortgage services were introduced to further provide a one-stop-shop experience.
In Phoenix and Dallas/Fort Worth markets combined, Opendoor is currently buying and selling more than 500 homes per month. In Phoenix alone, our 12-month numbers in MLS show +1,500 sales with a sales volume of $335 million.
Since this consumer experience is entirely new, it’s natural to compare the business to traditional or existing models. One of the most common refrains we’ve heard is this sort of online transaction is a “home flipping business.” However, this model has been applicable to everyone from growing families looking to move to a bigger house and professionals changing cities for work, to seniors needing to downsize into condos. Sellers who are contingent buyers and need liquidity to buy their new home quickly, also find this quick real estate transaction attractive.
Real estate agents are a part of this business model as well. If a client buys a home through the online service, agents are paid a 3 percent commission. If a client is selling a home, the listing agreement is honored.
I’m looking forward to telling you more about Opendoor’s model at the The New Real Estate Industry Seminar on February 16 in Scottsdale. The future is now. As real estate professionals we have always responded to the needs of our clients – and technology is now the way.
Jim Sexton has been licensed in real estate for 30+ years. He started in sales, became a Sales Manager, then an Office Manager, a Designated Broker and Owner/Broker of John Hall and Associates for 16 years. Jim sold John Hall to RealtyONE Group in 2011 and was their Designated Broker for 6 years. In August 2017, he joined Opendoor’s brokerage team and has been working with new market rollouts.