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This post has been republished with permission from Mike DelPrete.
Even in a cooling market, Opendoor’s buyer agent commissions — the fee paid to a buyer’s agent when a house is sold — remain significantly lower than market averages.
Why it matters: Leveraging its powers of scale, Opendoor is pushing down buyer agent commissions to reduce its expenses — a trend that began in early 2020.
- Opendoor’s buyer agent commissions range from 0.5 percent to 1 percent lower than the market average (typically, but not always, 3 percent).
- At scale, this could save the company over $50 million in commission fees annually.
Dig deeper: The data above, collected from Datadoor.io, looks at over 9,000 listings in Opendoor’s 20 largest markets as of Sep. 2, 2022.
- There were also 226 listings with buyer agent commissions above 3 percent — typically on houses that are struggling to sell.
The bottom line: Opendoor is deftly turning the buyer agent commission into a competitive advantage to optimize its business model.
- The lower fees save the company millions, without affecting its ability to efficiently sell houses.
- Read more: Everyone is coming after agent commissions.
Mike DelPrete is a strategic adviser and global expert in real estate tech, including Zavvie, an iBuyer offer aggregator. Connect with him on LinkedIn.