In one of the hottest markets for iBuyers, one Keller Williams team is figuring out a way to compete with its own version: OfferDepot.
There are so many startups trying to disrupt how people buy and sell houses, they can all blur to together and sound the same. Opendoor and Offerpad are now joined by OfferDepot, an effort to compete with iBuyers from a Keller Williams real estate team.
OfferDepot isn’t quite an iBuyer — though you wouldn’t know that from its name. The spinoff of a Phoenix, Arizona-based Keller Williams team quickly solicits offers for clients, similar to how iBuyers such as Opendoor present homesellers with a near-instant offer. Along the way, Keller Williams agents offer their traditional brokerage services.
“A lot of the industry is changing, obviously, and we wanted to make sure the sellers we were working with had access to every opportunity that was out there,” said Scott Kooiman, vice president at the Kenny Klaus Keller Williams team, who developed OfferDepot in partnership with team leader Kenny Klaus in late 2017. “In some cases, I hate to say it, but the traditional listing may not be in their best interest … We created a way we can help them where they don’t have to give away all their data.”
A seller who uses OfferDepot will receive a list of offers for the property within 24 hours, according to OfferDepot’s website. OfferDepot — or really, the Keller Williams agent working for a client under the spinoff’s brand name — solicits those offers from a mix of investors, including other iBuyers operating in the Phoenix metro area, Kooiman said. Offerpad, Opendoor and Zillow are all among the iBuyer companies presently operating in the Phoenix metro area.
At the same time, the Keller Williams agent provides clients with a comparative market analysis estimating what they would bring in if they listed their home on the market instead of accepting one of the investor offers (similar to what Zillow does currently with its Instant Offers program, the distinction being Zillow includes agents from a variety of brokerages through its Premier Agent program).
Then the sellers choose whether to list on the market or to accept an investor offer. Either way, the real estate agent is compensated, according to Kooiman. Even if the sellers choose the method that more closely resembles an “iBuyer experience,” they still have an agent walking them through the process.
This method isn’t totally new. Offerpad, for example, often receives requests from agents in its markets across the country for offers to bring to their clients, according to the company’s spokeswoman, Cortney Read.
“Agents do this all the time, but they haven’t promoted it through a website,” Read said. “We welcome agents to come to us and get offers for their clients.”
Opendoor also works with many agents in a similar way and has a longstanding working relationship with the Kenny Klaus team. On the OfferDepot website, Opendoor is prominently featured as an example offer for a client on the home page.
“By taking this modern approach to servicing sellers, Kenny and his team have enabled more people looking for convenience and certainty to sell to Opendoor,” an Opendoor spokesperson said. “This is a win for homeowners and a great example to other agents of what’s possible in better servicing customers with the new options available to homeowners today.”
The service is similar to how Zillow operated Instant Offers before jumping into the ring as a homebuyer and reseller earlier this year. For the year prior, Zillow allowed homesellers to share information about their property and receive a list of potential offers from investors, including from Offerpad. Zillow then started financing some of those offers itself, changing how Instant Offers functioned and prompting Offerpad to abandon the program.
Kooiman and Klaus were inspired to launch a service like this in Phoenix, a popular early market for iBuyers and startups trying to innovate in home transactions. The Phoenix area is Offerpad’s headquarters and also a market for Opendoor, Zillow Instant Offers and the flat-fee brokerage Purplebricks. These companies only operate in about a dozen overlapping markets right now, making Phoenix one of the few cities in the country to have all of them available to consumers.
“We’re in an area where there were a lot of options, but there was a lot of confusion,” Kooiman said. “People will hear the commercials on the radio and see the billboards, and they don’t know how that’s different.”
The Keller Williams team behind OfferDepot has eight full-time agents and two who work part-time, all of whom are trained on how to use the OfferDepot method.
The team has closed 50 transactions this year that were “nontraditional” listings like these, Kooiman said. Some of those have been from clients who heard about OfferDepot, but others are clients who come in through the usual Keller Williams process and end up deciding that an investor offer would work better for them.
“When you go to them you’re just getting one valuation and one opinion of the value of your property versus seeing all of them and seeing what putting it on the market looks like and going with this buyer versus this investor versus the guy who puts those bandit signs on the road and writes in magic marker ‘We’ll buy your house,'” Kooiman added. “We let them see what all those different options look like.”