OpenDoor, one of the very first iBuyer companies to launch in 2014, now operates in 20 markets nationwide and is worth an estimated $3.8B. During these last five years, OpenDoor has worked with approximately 50,000 buyers and sellers.
In a recent article with InmanNews, Eric Wu, the co-founder of Opendoor, was interviewed about iBuying business models now operating of the real estate industry, company achievements, lessons learned, what-if scenarios about a future downturn and future expansion goals.
Here is a cursory summary of the Inman interview with Eric Wu.
When asked what he thought of competing iBuyers such as ZillowOffers, KellerOffers, Realogy’s NRT, Coldwell Baker’s CataList, etc. Wu responded…
“Competition is the byproduct of building something that matters, something that customers choose.” Wu seems to be more dedicated than ever to providing convenience, ease and certainty when buying and selling homes.
Asked whether or not iBuying can co-exist with traditional brokerage models, Wu said…
“There are very few winner-take-all companies, but there are many winner-take-most companies.” Because there is a natural constraint to the amount of market share one iBuying company can have due to debt financing and risk, Wu believes that Opendoor can be a winner-take-most company as long as his company continues to deliver “superior excellence” to its customers.
Wu is particularly proud of the OpenDoor team for working to improve the customer experience, “invest in the platform and infrastructure of the platform to scale and invent new consumer products.”
He is also proud that the product has demonstrated its worth in all markets, at all price points and in all conditions so that the business can scale nationwide.
Wu’s biggest lesson?
“Important, impactful products take time to grow.” Opendoor’s Trade-Up Program, a partnership with builders to buy and sell simultaneously in “one seamless transaction” without having to “wait for the original house to sell before buying the next house” has, in Wu’s eye, “improved but is still not perfect.” Though “not perfect,” the Trade-Up Program is now doing +$1B in annual revenue.
Such programs and product lines Wu looks forward to developing (investor platforms, title and escrow platforms, Self Tour platforms for buyers, etc.) would also “take time to grow.”
Wu was not specific when asked about plans for new products, plans to make OpenDoor’s services free, as he has stated in past interviews, or plans to take his company public.
Asked about his insights into developing its own brokerage service and/or developing relationships with additional agents. Wu said he is exploring “every option to bring simplicity and certainty to the home buying/selling process. Wu’s goal is to offer consumers as much choice as possible. Consequently, OpenDoor announced earlier this year its Agent Partner Program designed to pair buyers and sellers “with trusted agents when its customers want and need this option.”
Wu told Inman that OpenDoor is currently serving 3,200 customers/month in 20 markets and that the company is investing in tech, systems and operational structure to ensure that “we can serve all buyers and sellers nationwide over the next decades.”
Wu was not specific as to whether or not OpenDoor will be scaling up to 50 markets through 2019 and 2020.