Opendoor CEO Eric Wu doesn’t think real estate agents will go extinct, but he believes their role will change considerably — and he wants Opendoor — whose services are expanding far beyond merely buying homes — to have a seat at the table for every transaction.
Those were some of the highlights during a frank interview that aired over the weekend with Wu from prominent tech columnist Kara Swisher, who said that Opendoor “seems like the closest thing to the next Airbnb.”
Wu mused at one point that, “I guess it’s good to be hated” when Swisher asked him about how Opendoor has coped with industry pushback. But he also noted that agents have embraced Opendoor as an option for sellers. And those that provide value as advisors are not going anywhere, he said.
But the role of agents is likely to evolve in two ways, Wu said.
First, real estate lead generation will be automated, while at least one source of business for agents will dry up.
As things stand today, Wu said, many consumers “feel obligated to use a certain person [Realtor] because there’s a friend of a friend or your brother in law” waiting in the wings for their business. That won’t be the case in the future, he said.
Visiting a home will also not mean getting “bounced to a Realtor,” often the case on listing portals today.
“Imagine you found a car you wanted to take, and you had to call a broker to take that ride,” he said.
Opendoor is nixing this step by allowing home shoppers to visit Opendoor listings unaccompanied by agents, in part by outfitting its homes with smart locks. More recently, it’s also started allowing customers to schedule visits to any listing (not just an Opendoor-owned home) without a Realtor, Wu said.
The second task of agents that Wu thinks will fall by the wayside? “Product management.”
That’s because, he said, software will automate coordination of various parties involved in the real estate transaction.
Wu ran through a laundry list of services that Opendoor provides and that could facilitate this transition.
It already lets you sell your home in “five minutes,” he said (Opendoor touts a “competitive cash offer in 24 hours.”) He added that if a seller accepts an offer Opendoor conducts a home inspection, after which Opendoor may amend its offer.
Opendoor also lets you “buy a home in a few clicks.” It’s done this by launching in-house mortgage and title services (the latter through an acquisition), making cash offers on behalf of buyers and offering a buyback guarantee to buyer customers, he said.
Questions continue to swirl around the true cost of Opendoor, as well as other iBuyers. Swisher pressed Wu on this topic, including the claim that Opendoor makes “lowball” offers on homes. (Some research suggests that iBuyers buy below market value.)
“That’s just not true,” Wu said about the lowball offer allegation.
He also said Opendoor charges a service fee that is “roughly one percent” more than you would pay a Realtor. In addition, it charges for repairs if it plans to conduct them after purchasing a property, he said.
Reception from Realtors has “been mixed,” Wu acknowledged. But, “I guess it’s good to be hated,” he said at one point, giving voice to the philosophy of some tech entrepreneurs.
Even still, “there are certainly agents who really love the fact that we give their consumers choice,” he said. Some regularly present both Opendoor and traditional services as options to prospective clients. (Agents can often receive referral fees from iBuyers, including Opendoor.)
The Opendoor route is about convenience, he said, while the traditional method is “about maximizing price.”
In the future, Wu said that the primary role of agents will be to “give you advice on somewhere to live, and help you build comfort in that decision.”
Meanwhile, if Wu gets his way, Opendoor will always be in the picture.
“We want to ensure that every single person who’s moving is a participant on opendoor.com,” he said. “You can list with us, sell to us and buy any home on the market.”