Opendoor Aims to Capture More Market Share
September 4, 2018
Opendoor, an online marketplace where investors can purchase properties directly from the owners, is expanding its reach across the country, setting a goal of having a presence in 50 U.S. markets by the end of 2020. The company told HousingWire that it plans to operate in 12 new markets in the next year alone. Over the next few months, it will focus on Sacramento, Calif.; Riverside, Calif.; Denver; Portland, Ore.; Austin, Texas; and Jacksonville, Fla. Opendoor says expanding into those markets—along with the 10 cities it currently operates in—will make its service accessible to about 15 percent of the U.S. population.
Wall Street is heavily backing the concept of “iBuyers”—companies that enable real estate purchases to be conducted entirely online. Two months ago, Opendoor officials announced they had raised $325 million in funding from investors.
Home sellers who use iBuyer firms, such as Opendoor, Offerpad, and Knock, are often able to obtain a quote from the companies within hours. The companies buy the homes and fix them up, if needed, for resale.
Real estate pros argue that using such a fast food-style method for a home sale could prove to be more costly to sellers. There are often onerous fees for the convenience of the platform, and sellers may earn less on the sale than if they used a real estate professional to advertise the home on the open market.
Opendoor first began buying and selling houses in Phoenix and Dallas in 2014, and the company recently teamed up with homebuilders for a “trade-in” program. A homeowner can sell their home to Opendoor and then buy a new home from Lennar or other affiliated homebuilders in one transaction.
Updated: July 22, 2019