HOUSTON – (Realty News Report) – Opendoor has been buying/selling homes in Houston since last summer. Categorized as an “iBuyer” because of its use of online-based technologies to streamline the home selling process, Opendoor is based in San Francisco and operates in 19 markets including four in Texas: Houston, Dallas, San Antonio and Austin. Realty News Report talked with Jason Cline, General Manager of the Houston market, who leads a local team of 25 employees.
Opendoor entered the Houston market last year. The firm explains its business model thusly:
We offer a simple and convenient option for home sellers. To request an offer, sellers go online, provide details about the home, its features and condition, and answer some questions. That process takes about 10 minutes. We value the home by looking at comparables in the market along with details sellers provide about their homes’ upgrades and unique features. Within 48 hours, we provide an online market-value offer for Opendoor to purchase the home. Homeowners can give feedback on the offer received and we conduct an on-site assessment. If the seller accepts the Opendoor offer, they set a closing date convenient for them. Once we have closed on the home, Opendoor does cosmetic repairs that may be needed. Then we re-list the home and buyers can use our app to shop for homes, as well view the listing in MLS. We charge a fee on the transaction that varies by home based on how long we predict it will take to sell it and to cover our risks and holding costs, such as utilities and maintenance.
Realty News Report: How many homes do you currently have on the market in Houston?
Cline: We have 136 Houston-area homes on the market now and about 25 percent of them are under contract to be sold. Houston is a good market for us and in January we doubled the number of monthly offer requests we received to more than 3000 requests. More than 50% of true sellers who request an offer end up selling to Opendoor.
Realty News Report: How many homes in Houston have you sold and are they listed on the MLS?
Cline: Opendoor has sold or we have under contract approximately 200 homes in the Houston area. They are indeed listed on the MLS. I like to say that we are just buyers and just sellers.
Realty News Report: What is the commission structure with agents?
Cline: We pay full commission to agents on every transaction. Right now, about 90 percent of homebuyers who purchase an Opendoor home do so with a Realtor.
Realty News Report: Describe the type of homes Opendoor purchases.
Cline: The homes we focus on we call our ‘buy box’ and those are homes priced from $100,000 to $500,000 and are on under one-half acre of land. We are not rescuing properties and we do not take on distressed homes, like those damaged during Hurricane Harvey.
Realty News Report: What is your biggest challenge in the Houston market?
Cline: There is tremendous interest here in Houston and the sheer size and diversity of the Houston market keeps us busy. We have Houston proper, The Woodlands, Galveston, Sugar Land and other outlying areas—it’s a big market.
Realty News Report: Is the concept of ‘iBuyer’ catching on among home sellers?
Cline: We are building awareness to inform home sellers about this convenient option. I think as long as we provide a market-value offer there is no hesitation.