Homeowners in Phoenix and Atlanta just got another option for selling their homes.
Online real estate companies Opendoor and Redfin announced that home sellers in those two cities can now request an Opendoor offer through Redfin’s site and mobile app.
With this partnership, home sellers will have the opportunity to compare listing their home on the open market with a full-service Redfin agent to receiving an instant offer from Opendoor and skipping the process of listing altogether.
There’s been a lot of conversation in the mortgage industry about online lenders, real estate brokerages, and ibuying companies reducing the role of mortgage originators and real estate players in the housing industry, although Redfin spokesperson Alina Ptaszynski says that’s not how they see their role at all.
“We really believe that consumers want to know all their options,” she said. “A lot of times it really makes sense to work with an agent who’s going to charge a lower fee, give you full service and list your home and get you the best price, but that doesn’t mean that they don’t want to see what they could get when they sell directly and have the convenience of a fast, cash sale. So for us, it’s really about providing that choice.”
How the Redfin Opendoor partnership will work
When visiting Redfin's website or mobile apps, homeowners in Phoenix and Atlanta will be able to request an instant offer from Opendoor as part of their home-sale inquiry. When the Redfin agent meets with the homeowner, the agent will advise them on the home-selling process, what their home is likely worth on the open market, and will present them with Opendoor’s offer. The homeowner can then choose to either sell to Opendoor, or work with a full-service Redfin agent to list the home on the open market for a 1.5% listing fee. If the homeowner does not want to meet with a Redfin agent, they can choose to receive only the Opendoor offer. Redfin will receive a referral fee for each customer who decides to sell to Opendoor.
“Redfin and Opendoor are bringing together the reach of the most visited online brokerage with the scale of the largest iBuyer service to deliver a comprehensive service for more customers,” said Eric Wu, founder and CEO of Opendoor. “Both companies are focused on making the experience of buying and selling a home simple and hassle-free. By working together, we can amplify our efforts and give customers more choice when making one of the biggest financial decisions of their lives.”
Expanding access for sellers and agents alike
Redfin will also market Opendoor’s home listings on Redfin.com and Redfin’s mobile apps and promote Opendoor’s all-day Open House, where buyers can unlock the home on-demand from their phone and self-tour.
In places where Redfin doesn’t have agents or there aren’t enough agents to meet customer demand, Redfin has a brokerage partner program, where they refer customers to local agents. This new partnership with Opendoor acts as a sort of extension of that program, extending the reach for cash offers to more people in more markets.
Redfin has its own instant offer service, RedfinNow, which they are continuing to expand “aggressively.” For the partnership, the two companies selected Phoenix and Atlanta because they’re markets where Redfin has a wide online audience and where Opendoor has a large established market footprint and capacity to meet demand for cash offers from Redfin customers. An Opendoor spokesperson said that choosing markets where RedfinNow doesn’t currently operate will make it easier to evaluate the success of the partnership, and eventually determine whether or not to expand the joint offering into additional markets.
Through the rollout of the RedfinNow program, Ptaszynski says that they’ve learned the value of choice.
“Most homeowners, when given the option, want to see what they could make on the open market and compare that to an instant cash offer. And so this partnership really allows us to bring that choice to more consumers,” she said.
There are certain homes that are more likely to benefit from an ibuying option. An Opendoor spokesperson said that the company typically buys homes built after 1960 and with a valuation somewhere between $100K and $800K, depending on the market. That’s not specific to Opendoor; each company has certain price points that they’re targeting. They tend to select homes that don’t need major repairs and/or renovations, and newer homes that are more consistent to price and easier to compare.
“Every homeowner should have a choice between putting a home on the market via a Redfin agent, or taking an instant cash offer,” said Redfin CEO Glenn Kelman. “No matter how fast RedfinNow expands, there will always be homes we can't buy, because it's so hard to match our capabilities and capital with the market's ups and downs. Just as traditional agents are our partner for brokered sales our own agents can't handle, Opendoor is our partner for giving customers reliable, competitive offers on homes we ourselves can't buy.”