Key Highlights
- Offerpad, Redfin and Opendoor resuming operations
- Offerpad returning in more than 800 cities
- Opendoor starting to do business in Phoenix and Raleigh-Durham
- Redfin relaunching in Austin, Denver and the Inland Empire, east of Los Angeles
Redfin’s iBuying segment, Redfin Now, is restarting in Austin, Denver and California’s Inland Empire east of Los Angeles. Redfin’s CEO, Glenn Kelman, said that the iBuying segment of his business has performed better than anticipated during the pandemic downturn and now he is focusing on “sell(ing) as many houses as possible while owning as few as possible.”
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Offerpad, during its down time, has worked with HealthyVerify, a company that develops health and safety protocols for businesses, to create new procedures to lower COVID transmission risks in the home-shopping process. Handling most home processes remotely, limiting the number of people in homes at one time and disinfecting common areas are at the top of the list among such protocols.
Additionally, Offerpad is offering virtual and video chat tours of homes and, when buyers need to tour a home in person, Offerpad-owned homes are to be sanitized and vacant.
Opendoor is also offering features to make the home-shopping process as contactless as possible. Direct sales to Opendoor now requires a virtual interior home assessment in lieu of an in-person walk-through. CEO and co-founder Eric Wu said, “…we’ve heard loud and clear that safety is the No. 1 priority.”
Opendoor will now offer a new service called Home Reserve designed expressly for those looking to buy and sell simultaneously. Here’s how Home Reserve works – Opendoor will purchase and reserve a family’s new home on their behalf with an all-cash offer. The simultaneous buyers/sellers will be allowed to move into the home and then Opendoor will list and sell their old house when it’s empty. This “Sell Direct” feature will be for single-family homes or townhomes priced between $100,000-$750,000. Participating households will be charged a 6% listing fee on the home they are selling and Opendoor will get a commission from the seller on the new home.
Because more and more agents have already adapted to virtual, contactless home-shopping transactions, these new services will help iBuyers remain competitive, according to real estate tech wizard and independent analyst Mike DelPrete. “They (iBuyers) all struggled with profitability…” even before the COVID pandemic. “These were cash-burning businesses, and they were all struggling to start up ancillary revenue streams like mortgage and title operations to prove out profitability.”
Whether or not these iBuying companies and/or business segments can generate any profitability in an environment where price appreciation is iffy at best, time will tell. In the meantime, Zillow is waiting to resume its home-buying operations as it continues “to monitor market signals and local health orders.”
Thanks to InmanNews and MarketWatch.
Also read: Exodus of Wealthy New Yorkers to Suburbs and Beyond, How Many Work Hours Needed to Pay Rent in 25 Largest US Cities?, Podcast: The Great Reopening Begins! | Housing Boom Ahead? | Tim and Julie Harris
