Key Highlights

  • Customer acquisition costs (CAC) similar for leading iBuyers
  • iBuyer CAC runs between $3,000 – $4,000, roughly 2-4X more than Redfin 

Largest iBuyers Spent +$200M Advertising to Consumers Over Past 3 Years

The largest iBuyers in the US – Opendoor, Zillow and Offerpad – have spent more than $200M over the last three years for advertising costs directed solely to consumers.

In studying public finance results for 2020 for these three companies, Mike DelPrete, a global expert in real estate tech, discovered Opendoor spent closely twice that of Zillow and Offerpad on its advertising expenses per customer, or customer acquisition cost (CAC).  (Zillow and Offerpad spent approximately $3,000/customer while Opendoor spent approximately $6,000.

This discrepancy in CAC makes sense…Opendoor buys and sells close to twice the number of homes as do its competitors.

Redfin’s CAC Budget is 2-4 Times Less than iBuyers’ CAC Budget

Redfin, according to DelPrete, is now considered to be a member of the “old guard” in the real estate industry.  This tech-based brokerage just recently added iBuying to its customer services list plus it has an existing portal where millions of visitors search and have searched for homes over time.

Because of Redfin’s longer standing “history” in the industry, it can spend 2-4X less on CAC as do Opendoor, Zillow and Offerpad without losing “touch” with those consumers.

Zillow too, because of its massive portal audience, can spend less on CAC than Opendoor as well.

iBuyer Headcount Shifts in 2020

Headcount expense shifts for sales employees in 2020 varied widely among iBuyersOpendoor laid off staff during the pandemic and saved $26.7M due to headcount reductions.  Zillow, having the luxury of flush capitalization, added sales employees to the tune of $21.8M.  No information was offered concerning Offerpad’s headcount expenses during 2020.

Any way one looks at it, Opendoor pays the most to acquire its customers, close to 2X more than Zillow and Offerpad, and all of these largest iBuyers spend a minimum of 2-4X of Redfin’s CAC costs.

 

Thanks to Inman and Mike DelPrete.

URGENT: 2021 Results Released. New FREE On-Line Web Event Reveals 17 Surprising Secrets Of The Top 100 Millionaire Agents. Get Your FREE Spot For The On-Line Webinar Now. When You Attend This Event You Will Have A Sense Of Relief Knowing You Can FINALLY Laugh At Your Money Worries – If You Follow This Simple Plan. Learn How To Generate 100’s of Motivated Leads Without Coming Off As A Pushy Salesperson and Losing Your Soul. Learn Now How To Become One of the 1000s of Agents Making HUGE Money NOW Who Never Thought They Could.



P.S. Limited Space Available. 235 Spots Left.

[mashshare]