Most people who buy properties through Opendoor’s digital platform still prefer to work with a real estate agent, Chief Executive Officer Eric Wu said Wednesday during a session at Inman Connect.
The tech startup’s efforts to disrupt the home resale market have been particularly straightforward for sellers, who have been increasingly comfortable selling their homes directly to Opendoor, Wu told Inman Publisher Brad Inman. But when it comes time to sell those homes to outside buyers, the company still tends to work with agents more often than not.
“We don’t rule out agents,” Wu told Inman in a virtual interview. “Some customers prefer an agent to help them through the transaction, which is, in fact, totally fine.”
This persistent reliance on agent expertise is one illustration of the steep path that tech startups still face as they attempt to build broad trust among potential users — and especially among buyers.
“It’s a huge decision for consumers,” Wu said of the process of buying a home. “It’s highly infrequent, and so you don’t do it that often. And any mistakes would be catastrophic for consumers.”
Opendoor is one of several prominent startups in recent years that have tried to get out ahead of potential changes in how people buy and sell their homes. And while Wu predicts at least a quarter of home transactions may be digital within a couple decades, he said this segment of the market still only represents roughly 1 percent of total home sales.
This leaves Wu’s company with a dual set of priorities, he said: raising overall awareness among consumers of these new online tools, and ensuring that Opendoor is positioned to benefit from a large share of this digital growth.
Startups are continuing to build an infrastructure that can process transactions efficiently, Wu said. Partly as a result of these investments, Opendoor’s fees have now dropped to roughly 5 percent, he said.
“You have to build the software and the platforms so that it’s not so people-dependent, which creates lag and inefficiencies, and also variance in the quality of the experience,” Wu said.
Wu said he hopes some of the early beneficiaries of a streamlined sale process will be real estate agents themselves. With more tech companies like Opendoor managing sales, one goal is to make responses to offers much quicker and more transparent for agents and their clients.
“When we think about how the transaction should evolve, it also should be much simpler for agents, and faster,” Wu said. “All the uncertainty, all the time delays — it’s anxiety-inducing right now.”