Online real estate marketplace Opendoor is making its first acquisition, snapping up a discount brokerage called Open Listings.
Open Listings is an end-to-end real estate platform aimed at buyers that offers them a 50 percent rebate on the buyer’s agent commission. The idea is that people can search through listings, book private showings, make an offer and do all of the necessary paperwork via the platform before completing a sale, all without relying on a real estate agent. Agents aren’t done away with completely however, but the process is segmented so that agents only play a very specific role in transactions. The main advantage of this, from a buyer’s perspective, is that they can enjoy big savings that would have otherwise gone on agent’s fees.
By buying Open Listings, Opendoor will be able to add these services to its own offering, and make it “as easy to buy, sell or trade-in a home as it is to hail a ride, book a flight or shop online,” it said in a statement.
Opendoor is striving to corner the real estate market, and is backed by a massive $645 million in equity financing. It’s most recent funding round came in June, when it landed $325 million, which it said was a vote of confidence in its business model that involves buying homes sight unseen, doing them up, and then selling them on for a profit. It’s basically an enormous house-flipping operation.
Opendoor is rapidly expanding, and says it will be operating in 18 U.S. markets by the end of the year, including Sacramento, Las Vegas, Denver and Atlanta.
In each of its markets, sellers can receive an almost instant cash offer on their home. And more sellers are taking advantage of that: Opendoor bought more than 1,000 homes in August, up from 400 a year ago, according to Inman News.
Opendoor has also expanded its trade-up program, partnering with home builders including Lennar Corp., Taylor Morrison and Meritage Homes.
Nationwide, Opendoor faces competition Zillow, which operates its Instant Offers program in cities including Atlanta, Las Vegas and Phoenix.