Here’s an interesting partnership among two iBuyers…Opendoor and Redfin recently announced their partnership to join forces in Atlanta and Phoenix to maximize their combined market reach and market options for their potential customers.
Available immediately, consumers wishing to sell their respective home who visit Redfin’s website in Phoenix and/or Atlanta are now offered a choice of requesting a cash offer from Opendoor AND an opinion on the open market value of their home from a Redfin agent.
How did this partnership come about? Redfin CEO Glenn Kelman said, “We realized that almost every listing customer is going to want to compare the net proceeds from an instant offer…” with the net proceeds from a traditional brokerage sale. The idea is to let the consumer choose between the convenience of an instant offer and perhaps netting more money by listing the property with an agent. Such a choice arrangement could, according to BloombergNews, render lower customer acquisition costs that more traditional advertising and lower listing fees for the seller.
This partnership process would, according to both companies, allow homeowners in Phoenix and Atlanta to request an instant offer from Opendoor when they register a home sale inquiry on Redfin’s website. Then, a Redfin agent would meet with the seller to discuss the home selling process, discuss the likely worth of the home on the open market and present the seller with Opendoor’s offer on the house. The seller would then decide to either sell the house to Opendoor or list the house with Redfin for a 1.5% listing fee.
(Of course, the seller could choose to not meet with the agent and sell directly to Opendoor from the get-go. Either way, Redfin would receive that 1.5% referral fee when the customer chooses to sell to Opendoor.)
Redfin will also place Opendoor’s listing on its site and mobile apps to double the visibility of these properties for more buyers.
Kelman went on to say in announcing this partnership, “Just as traditional agents are our partners for brokered sales, Opendoor is our partner for giving customers reliable, competitive offers on homes we ourselves cannot buy…the main impetus for this partnership is demand from our customers…RedfinNow, no matter how quickly we expanded, wasn’t going to be able to handle that demand…” as RedfinNow does not currently operate in Phoenix or Atlanta while Opendoor does.
According to Eric Wu, CEO of Opendoor, “The benefit to Opendoor is reach.” (Redfin’s website currently averages 31M monthly visitors.) “The benefit to Redfin is (that this partnership) allows their customers to understand the options…Redfin and Opendoor are bringing together the reach of the most visited online brokerage with the scale of the largest iBuyer service to deliver a comprehensive service for more customers.”