Previous Post
Tweet about this on TwitterShare on TumblrPin on PinterestShare on LinkedInShare on Google+Email this to someoneShare on Facebook
Read on Mobile

Opendoor.com Have They Figured Out The Perfect #CRE Business Model?

#CREmoney

Opendoor.

Opendoor is a new company based in San Francisco.

They make an offer on your house and will close in as little as three days.

This is how IT WORKS.

So why am I showing you Opendoor?

THEY ARE TRANSFORMING THE REAL ESTATE TRANSACTION.

Here is how!

1. A potential seller inputs their property information.

2. In less than three minutes the seller requests an offer.

3. They analyze the market data and make an offer.

4. If the seller accepts Opendoor will handle the transaction and the seller then choses when to close.

Are there more specific details of the transaction process?  Of course there are and they spell them out simply and clearly on the site.

YES, they work with brokers. CLICK CLICK CLICK!

So far it does not seem like anything special or different does it?  You’re smart. You’ve seen versions of this thing come and go right?

Let me help you open your mind just that little bit more.

Facing the consumer.

There it is again. That fancy word. This is a pure consumer play.

1. A potential seller inputs their property information.

Did you see that? No listing. No database. No MLS. No………middleman!

Sound familiar?

Wait. Let me say that again so you understand. The potential seller inputs the data themselves onto a platform owned managed and funded by……….THE BUYER!

The seller and the buyer agree on a price based on data (Big Huge Ass Data) from the actual marketplace.

The data is provided by………(_____)(______)(_____)(_____) ………There are a bunch of companies that want to have their names in those empty boxes.

How much do you think the consumer cares? You want them to care A LOT right? What if they don’t? (Don’t even start with the legacy/bullshit/boomer/I need to keep my job for 10 more years asshole argument.)

What should get your undivided attention the THE BIG HUGE ASS DATA.

What are they using?

How do they come up with a market price?

They must be stealing it or jumping in dumpsters and getting old faxes with comps on them or something like that. That’s the only way right?

The market is the market and has been defined by (_________) mostly forever.

Opendoor also simplifies the transaction process by doing EVERYTHING.

” We come to you.” It’s on the site. Find it.

Oh and Opendoor writes THE CHECK.

Quick summary.

1. Submit property info.

2. Have a market value placed on the property.

3. Get an offer to purchase.

4. Agree to terms.

5. Have the entire transaction handled for you.

6. Choose exactly when you want to move.

7. Get A CHECK………All on the same platform.

Billions and Billions. 

How much money is being spent to create “the marketplace” for property?

How much money is being spent to “define” the marketplace?

How much money is being spent to “support” the marketplace?

How many platforms are competing for that consumer?

How many platforms face the consumer and offer to buy their property?

How many platforms face the consumer and do it the way Opendoor does?

How many platforms have the team that Opendoor does?

I had a conversation a couple of months ago with a SF hitter tech CEO and he was literally gushing about the people involved. They have all the tech cred in the world.

Oh, but they don’t have the real estate cred you say? Really, they just figured out how to get a seller to give them a “listing” make an offer agree on a price get a signed agreement go to close and fund the check. WITHOUT YOU!

How many of those are you doing? Right now? Where are you in that transaction?

THEY ARE ALL OF THEM!

But Duke this is just a transaction for a house.

This means nothing to me. It just a house it’s not commercial real estate.

(Sigh) That’s as far as you can think? You can’t go beyond that? (Sigh)

So here we sit. The #CRE big bad boys. We’re smart. Smart as hell and we know it.

There has to be some kind of catch right?

These damn tech people are not that smart are they?

They must have missed something.

They didn’t.

I am having one of those moments right now.

Right now there is somebody in #CRE reading this and I know what they are thinking.

It could not be that simple could it?

Go ahead and research the hell out of this.

It’s all in front of you.

There are people in #CRE with some big $$$$ and big balls.

Want to show how big they really are?

Opendoor sure as hell is!

Opendoor.com Have They Figured Out The Perfect #CRE Business Model?

 

 

 

 

 

 

 

 

Next Post

Written by

  • Robert M.

    AdvancedREI.com is a

  • Bob

    I’ve looked at a lot of deals, scratched my head and said it doesn’t make sense – only to have someone smarter, or richer, or with a big pair, jump in and get it done.

    So as I sit here, scratching my head, and saying it doesn’t make sense – maybe another lesson is in the offing.

    • dukelong

      Bob,
      Just look at the team. Big time serious!

  • abuchanan

    Alright! Mind opened. Dumb question (with full acknowledgement that the seller doesn’t care unless it affects his net $$)…what does Open Door do with the inventory they purchase?

    • dukelong

      Improve the property if needed and then sell. If it needs just a quick clean up then the same. Allen think “margins” on money invested. Compare that to whatever you want. Big $$$.

  • Sounds too good to be true and so long as they totally understand the risks. Do not understand how they have such competence in so many markets, but I guess they must be working with agents or somebody to have that many bodies out there. It says they inspect the property so they have a swat team of inspectors or an inspection network? I see them getting in more trouble, than the sellers! But it is great for the sellers if it is truly that easy as their marketing leads you to believe. Good luck to them! It is a new mouse trap, that is for sure!

    • abuchanan

      Ok. I get that. Doesn’t Open Door have to buy at a discount? I’m just wondering how this plays for the seller. I believe the seller is trading certainly for the margin an investor can pay. The seller gives up the “buyer premium”…which means they sell for less money.

      • Duke Long

        Sell for less compared to what. Buyer and seller decide the market.

      • CREOutsider

        Open Door tacks on so many fees that, while the offering price looks decent, after all the fees are deducted, the seller will end up with less than if they used an agent. I guess it’s just a matter of how much the time saved is worth to the seller.

  • CREOutsider

    Clever… Kind of like what some relocation services do for corporate employees when they’re transferred though the relocation company isn’t aiming to make a profit on the resale.

    But I just can’t see how the carrying costs are covered with the 5.5% commission. So they’re going to have to offer lower than current market value – which I’m sure their data will tell them. And a lower price may be okay if someone is in a hurry – or desperate.

    Not sure if agents would submit houses unless they’re willing to take a commission cut because sellers wouldn’t be too happy to pay the higher commission assuming the selling agent takes their typical 3% and then has to pay 5.5% to OpenDoor.

  • Good article. Our company, OnboardInformatics.com, is one of those names in the empty boxes.