low interest rates and a desire to get out of the city is spiking the home buying market in many areas. That comes against a backdrop of a real estate industry that has embraced relatively little digital transformation compared to some other sectors. Now what?has made buying and selling homes harder at the same time that
Opendoor is part of a wave of real estate or “proptech” platforms that are trying to do for home buying what has happened with car buying. “I think the closest (comparison) would be the ‘Carmax of real estate,'” says Ian Wong, CTO and cofounder of Opendoor. The company can list your home, which isn’t a radical idea, but also advocates buying it from you.
Why would you forgo getting the best market price? “Right now, if you want to sell a home, it takes about 60 days, you pay 5% or 6%, there’s a one in seven chance you won’t even find a buyer, and you have to do perhaps years of deferred maintenance,” says Wong. He says many buyers prefer Opendoor’s offer, delivered within an hour via a big data algorithm, rather than enduring the hassles of seeing what the market will bear.
Wong admits that Opendoor’s fees are currently about 1% higher than the customary 5 to 6% of a traditional real estate transaction, but it expects to hit fee parity and then undercut traditional fees as the platform scales. Opendoor operates in 21 US metros as of late August, 2020, and is currently buying homes in 14 of them.
Wong is convinced that Opendoor’s current COVID-19 practices are new normals that will stick, post-pandemic. “If it’s an (Opendoor-owned) home, we’ve installed smart locks so you (a buyer) can enter when you want, and we can guarantee you are the only person touring that home in a given period of time.” Opendoor also emphasizes 360-degree view and video tours as first steps, rather than just throwing open a home to lookie-loos.
Opendoor’s Ian Wong had other key insights into changing the real estate market, hear them all in the video above with CNET’s Brian Cooley.
Now What is a video interview series with industry leaders, celebrities and influencers that covers trends impacting businesses and consumers amid the “new normal.” There will always be change in our world, and we’ll be here to discuss how to navigate it all.
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