Craigslist

After laying off 550, expansion of Opendoor Exclusives announced

Opendoor has extended its iBuyer Opendoor Exclusives program to a peer-to-peer managed marketplace.

It wasn’t too long ago that newspapers shuddered at the thought of Craigslist, a free peer-to-peer buy/sell/trade site that would eventually spell the end of the traditional classifieds section. Likewise, could Opendoor Exclusives’ expansion into a peer-to-peer market spell the end of the Multiple Listing Service as we know it?

Eric Wu

The iBuyer today announced the expansion of its Opendoor exclusives, a program that offers company-owned pre-market listings. The expansion comes less than 24 hours after Opendoor cut 18% of its workforce – about 550 employees – before the company’s third quarter earnings call. This isn’t the first time Opendoor has made major cuts in 2022. Opendoor already laid off 830 workers earlier this year.

“We didn’t make the decision to downsize the team today lightly, but we did it to ensure we can accomplish our mission for years to come,” said Eric Wu. , co-founder and CEO of Opendoor. in a blog post. “And even though we are going through a market transition that only happens once in forty years, that does not take away from the difficulties, the frustration and the sadness that downsizing brings.”

Opendoor exclusives: an “Amazon-like” experience

Despite losing much of its workforce, Opendoor’s expansion of the Opendoor Exclusives program is being touted by the company as a game-changer that will “take the hassle out of the traditional real estate model” and streamline the experience. buying and selling to transform “what has historically felt like Craigslist into a modern, Amazon-like way of buying and selling a home,” the company said in a press release.

The program allows sellers to review offers from investors and retail buyers alongside an offer from Opendoor.

“Homeowners can request an offer from our network of buyers, in addition to an Opendoor offer, and sell in minutes without the need for repairs, extensive home prep, or months of open houses or listings. “Wu said in a statement. “The end-to-end experience is designed to give home sellers control, with no upfront commitment, flexibility to close early and certainty to close.”

For shoppers on the platform, users can view Opendoor exclusives before accessing the MLS. If the property is owned by Opendoor, it can be reserved in the app. Alternatively, buyers can send offers to sellers, who can then choose the best one for them.

But what if the purchase price is higher than the estimate? According to the Company’s Valuation Price Match Guarantee:

“If you are financing the purchase of an Opendoor Exclusive and the property’s appraisal price is lower than the purchase price, we will reduce the purchase price to the appraisal price, up to a maximum reduction of the purchase price of $50,000, so long as: (a) your lender is a duly licensed residential mortgage lender, (b) you provide us with an appraisal of the property from your lender that is no earlier than the date of signing of the purchase agreement, and (c) your lender used a licensed independent appraiser retained by an appraisal management company to generate the appraisal.

This price match policy is good for everything except financing agent commissions.

Could Opendoor exclusives be the end of MLS?

This peer-to-peer market is 180° from the traditional real estate market. For decades, the primary way to market a home was to hire a licensed real estate professional and list the property on MLS. But the iBuyer and industry disruptor aim to eliminate MLS altogether with the market.

“Our belief is that by building a better, more efficient and more transparent system, we can improve outcomes for buyers and sellers,” Wu said. “Marketplaces have the unique ability to increase trust, simplify the process and eliminate much of the complexity, opacity and cost. This is exactly what we intend to do for real estate.

Kevin Caskey

However, while Opendoor aims to streamline the buying and selling process, does this best serve people making one of the biggest transactions of their lives? This is where real estate agents have always shown their value by accompanying their clients through a complex process as an ally.

“Avoiding the ‘hassle of the traditional real estate model’ leaves buyers and sellers unrepresented by real estate professionals who guarantee their best interests,” said Kevin Caskey of Halo Group Realty, a Dallas-based real estate community leader. Fort Worth.

According to the press release, Opendoor’s expansion of the program is largely due to its success in Dallas-Fort Worth and Austin, where more than $100 million in real estate has been purchased and about 20% of its homes were made through the Opendoor Exclusives platform.

“Although our offices are no longer above a noisy Irish pub and although we have just launched, we are bold with our ambition – to target over 30% of our total transactions through our exclusive marketplace by the end of 2023 and be on track to help the next 250,000 customers,” Wu said. “Most importantly, we aim to change the way the entire real estate system works for the better.”

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