My favorite cousin called and asked me to help him find a home in Phoenix. Knowing him like I do, I didn’t hesitate to give him a hand. As typical, I prepared our day of viewing homes and found two homes were listed by “Opendoor” so I decided to delve in and get more information as I hadn’t heard of this before…
Opendoor
Opendoor operates ENTIRELY online and extends purchase offers before viewing a home. It charges sellers a minimum 6% service fee and the final fee is determined after the home is inspected and can be higher than 6%. Sellers set their closing date which can be as short as only 3 days and all purchases are in cash!
According to opendoor.com, as of last October, the company reported its monthly purchases are exceeding $100 million. They do pay buyer agent commissions and they are currently in 10 U.S. cities and intending to add 20 more this year!
When we arrived at the home, you simply use the downloaded app on your phone to open the door. The two homes we viewed had signs in the front yard saying Open House all day and were advertised on the MLS that you can view the homes anytime that day from 8 AM to 8 PM. The interior of the homes had signs exhibiting NEW PAINT or NEW CARPET and had smaller signs reminding you to lock the garage and exterior doors going into the rear yards and pools. Of course, a large sign on a pedestal was in each entry and advertised how they can help YOU too! (Sorry, I didn’t take pictures!)
Here are some of Opendoor’s perks:
- Opendoor will cover 1% of the buyer’s closing costs if they use one of Opendoor’s preferred lenders.
- Opendoor also offers a trade-in program. Homeowners who sell to Opendoor can buy another Opendoor home at a discount of up to the amount of commission that would have been paid to the buyer’s agent.
More facts on Opendoor:
- Opendoor limits their activity to homes that are in popular desirable neighborhoods.
- Opendoor doesn’t bid on luxury properties, unique homes, or any property that doesn’t have readily accessible comparable data.
In my research I learned there are many others – Offerpad, Knock, Redfin, Zillow Instant Offers, and Assist2Sell. In the U.K. Purplebricks launched in 2014 and became the number one real estate brokerage there! WOW!
Looks like we will need to stay competitive by leveraging technology, researching the competition, specialize in niches, and deliver full service. I look forward to hearing from others on your experiences as I continue researching these new Real Estate Models.