“Technology will fundamentally transform how homes are bought and sold,” said Keith Rabois, co-founder of Opendoor, in a statement. Bold words, but Rabois and his co-founders seem to think a new platform for their startup will do just that.
Opendoor, the “big-data house-flipping startup” that’s raised $30 million in funding, has launched a home-shopping platform that’s designed to let buyers easily access Opendoor properties and submit offers and contracts online.
The launch of the platform brings Opendoor’s user experience full circle. While originally launched to speed up the home-selling process, the startup now also caters to homebuyers with a system that should help the industry disruptor more efficiently flip the homes that it purchases.
“In an industry largely untouched by technology, our new buying experience fundamentally changes the way homes are purchased,” said Eric Wu, CEO of Opendoor, in a statement. “This is an evolution of our mission to empower consumers and simplify the real estate transaction.”
Wu, a former head of geo products at Trulia, is part of an all-star of cast of co-founders at Opendoor that also includes Rabois, a PayPal and Square exec, and Ian Wong, a former data scientist at Square.
The pedigree of Opendoor’s creators — which have helped the startup secure the $30 million in funding from a list of investors that reads like a who’s who of tech bigwigs — and the startup’s goal to vastly speed up the selling process for homeowners (and, now, the buying process as well) have distinguished Opendoor as one of the most compelling tech startups in real estate.
The new home-shopping platform lets buyers view Opendoor properties at any time by using a mobile device to unlock the door of a property. It also offers a “streamlined, simple transaction process with instant offers and online contracts.” Buyers can use the platform to make offers from a mobile device, Opendoor said.
All homes that buyers can see and purchase through the platform are “renovated, move-in ready, fully inspected and come with a warranty,” Opendoor says.
The new platform also lets users see homes before they’re listed and “personalize the home with features and upgrades before closing.”
Opendoor said in January that it was purchasing “at least a home each day” in Phoenix, Arizona, where it launched last year; it is preparing to expand into Portland, Oregon, and Dallas, Texas.
Opendoor launched as a service designed to make it easy for homeowners to sell their homes at lightning speed.
When homeowners enter their address and submit some basic information online, Opendoor’s valuation model provides “a real offer to buy their home” within minutes, the company says. Nearly the entire transaction is handled online, with sellers closing and receiving funding within as little as three days.
Sellers pay a 5.5 percent “convenience charge” and take care of most closing costs. They also accept a discounted price on their home, which Opendoor says helps cover the risk that it won’t be able to flip every home it buys at a profit.
Opendoor says it uses the 5.5 percent commission charge to cover the cost of selling a home, including repair, maintenance, mortgage and insurance costs.
By providing a shopping platform to buyers, Opendoor may be able to create efficiencies that reduce selling costs. Its platform also establishes Opendoor as a platform serving consumers at all points of the real estate sales cycle.
“We’ve eliminated months of work and thousands of dollars of investment from one of life’s most important transactions,” Rabois said in a statement.