A Minnesota boutique indie is jumping into the iBuyer game — not armed with the capital of companies like Zillow, Knock, Redfin and Offerpad — but with a partner in Opendoor.
Scenario time: you’re a small local indie brokerage and a big, well-funded iBuyer comes to town. What do you do?
When that same thing happened to Minnesota-based BRIX Real Estate — with Opendoor recently launching in the Twin Cities as part of its planned 50-market nationwide expansion — BRIX’s broker/owner seized the opportunity.
Earlier this month, BRIX launched its Simple Offer program, giving sellers in Downtown Minneapolis, St. Paul, Maple Grove and Burnsville an all-cash offer within 47 hours through a portal on its own website that links directly to Opendoor.
“We believe in consumer choice so while we may introduce the Opendoor platform to sellers and potentially cost ourselves some listing business, we’re happy to do so because it does a couple things,” said Danny Dietl, broker/owner of BRIX Real Estate, who projects the company will ink $120 million in total sales this year. “We want consumers to have a choice and it also gets us to participate in the conversation and demonstrate our value proposition.”
In a Facebook post announcing the Simple Offer program, Dietl wrote that the benefits include a streamlined sales process that does away with home showings and home staging while offering sellers the ability to pick their own close date.
Since the launch, around 10 consumers have inquired about the program, including one seller who hasn’t closed yet who Dietl believes will take the all-cash offer. Overall, the conversation around the program has been positive, he added.
“This is perfect for sellers who place a premium on convenience and certainty,” wrote Dietl. “We will also clearly show you what you can net if you go the traditional way of selling so you can make a fully informed decision on what works best for you.”
Sellers need to sign a one-time showing agreement to participate, according to Dietl, which allows the seller to have BRIX as their representative should they accept.
“While the offer program is simple there are still contractual hurdles to cross with any buyer – ie: inspection related negotiations – this allows the seller to be able to see the simple offer and compare it with how they would net out on the dollars vs the conventional route – while taking into account the convenience factor – without committing the seller to work with us long term,” said Dietl. “Should the simple offer not meet their needs the seller would then be free to list with whomever they’d like including us and they are out nothing for testing the waters.”
Currently, only single-family homes, townhouses and twin homes valued between $100,000-$500,000 qualify for the Simple Offer program. Condos, apartment buildings and other properties with a common area or shared entrance are not eligible.
“We’re experimenting in the markets that we are not as active in the second and third-tier suburbs, a lot of the townhomes,” Dietle said. “Things like that. So far it’s been really positive.”
Neither an official announcement nor the company’s website mention Opendoor explicitly, an intentional decision, Dietl said. The partnership with the iBuyer isn’t exclusive and Dietl said he doesn’t want to limit other potential partnerships in the future.
“Right now, Opendoor is the one that makes sense, but we just say investor offers,” Dietl said. “But we didn’t want it to be specific to that to limit us, in case some other model or competitors come in that we could potentially work with as well.”
Opendoor recently expanded further into the real estate market, acquiring fellow California-based techie discount brokerage Open Listings earlier this month in a bid to shift into a company that uses more buyer’s agents, including in-house agents and partners. Will that change Opendoor’s ability to work with other local brokerages as it expands its reach?
“In each of our markets, we work formally with agent teams to allow their agents to present Opendoor offers to their clients,” Cristin Culver, a spokesperson for Opendoor told Inman. “It’s optionality that’s great for their clients — they get competitive, cash offers alongside the option to allow their trusted agent to list their home on the market.”
“Clients can assess which route is best for them and their individual situation and timeline, and proceed accordingly,” added Culver. “Clients continue to be represented by their agent and honor their listing agreement, and Opendoor contributes 1 percent to their sellers’ costs at closing.”
Culver said its similar to the agreement Opendoor has with a Keller Williams team in Phoenix. The Keller Williams team, through its program called OfferDepot, solicits offers on a home from a mix of investors and other iBuyers operating in the Phoenix metro like Opendoor, Offerpad and Zillow.
“This is not the first of these partnerships for Opendoor, we have them in place in each of our markets, and we welcome to opportunity for more with other brokerages and teams who want to provide the same optionality and experience to their clients,” said Culver.
However, such partnerships are not always built to last: Zillow Offers, the Seattle tech giant’s iBuyer program, started as a similar online marketplace where prospective sellers could solicit cash offers from multiple institutional investors, including Opendoor rival Offerpad. When Zillow announced in April it would field its own all-cash offers on homes, Offerpad cut ties with the company.