Housely
The world is changing at a rapid pace with the invention of new technologies. The real estate industry is no exception. There is a new startup business that is making record sales and they’ve just made a huge leap in their fundraising to expand even further. You may not yet have heard of OpenDoor. If not, it’s probably because they’ve only been in existence for the past three years, but their success has been fairly exceptional. We’re going to take a closer look at this phenomenal new company for all who are interested in the sale and purchase of homes. They have a lot to offer and we think that they are a valuable resource that merits further exposure to the general public.
Who is OpenDoor and what do they do?
OpenDoor is a startup business out of San Francisco that delivers a unique platform for home buying. They offer a model that is exceptional and adds convenience for people who are interested in purchasing a home. OpenDoor has a massive inventory of homes which are available for purchase. What makes them truly unique is that they own every home that is listed. This cuts down on the need for negotiating with the seller through a third party for those interested in buying. This model is designed to cut down on the hassle of purchasing a home or property and it makes the process go much more quickly. They are also an excellent resource for property owners who are interested in making a quick sale of the home that they own. OpenDoor purchases homes in order to flip them quickly and make a sale.
How successful has OpenDoor been since their inception?
Currently, OpenDoor has successfully completed the sale of four thousand homes. This is amazing for only being in operation for three years. We believe that the key to their success has been in providing people with a no nonsense approach to home selling and purchase. Cutting back on the amount of haggling, decision making and the rhetoric offers a convenient approach for home buyers and sellers that is both refreshing and time efficient. So far, the number of home sales is reflecting a tremendous success for the relatively new business. They are making waves in the real estate pool, for the better as far as buyers and sellers are concerned. OpenDoor purchases approximately sixty million dollars in homes on a monthly basis.
Fundraising
OpenDoor has just raised a total of $210 million of new money in a Series D funding. This round was spearheaded by Norwest Venture Partners. Other investors for this round also include GGV Capital, NEA, Khosla and a few others backing the new company. They have a good track record for successful fund raising having raised eighty million dollars just the year before. This brings the total amount of fundraising from their efforts to $320 million. We were not able to get a current valuation of the company.
What makes them stand out in the industry
OpenDoor offers some one of a kind features that draw both buyers and sellers in. Recently, they began offering the option of trade ins which are designed for home sellers who want to buy a new home after selling the old one. They not only purchase the old home, but can sell a new home to the client. They also offer a thirty day money back guarantee for anyone who is not satisfied with the home that they purchase.
People who purchase their homes through OpenDoor find that most of the hassles involved with the process are absorbed by the company. They do an excellent job of providing tours at the client’s convenience and for taking care of any needed improvements or repairs at the request of the client. Of course there are charges associated with any extra work, but many customers find the rates to be well worth the time and effort that they would spend doing it themselves. The cost of such services is simply tallied into the final selling price of the home.
Who founded the company?
OpenDoor was co-founded by Keith Rabois who is a former executive with PayPal and currently an investor. Other co-founders include Eric Wu, JD Ross and Ian Wong. The company was established in 2014 with the goal of making home buying and selling easier.
Use of new technology
OpenDoor uses some of the latest technology to gather the necessary information for valuing the properties that the buy and sell. It works on the basis of algorithms that use the current information about homes with regard to market values in the public data arena. The programs that they use have the capacity of searching through available data and calculating a fair market price within just moments. This is particularly useful when a client is waiting for the information to make their decision about whether to go with OpenDoor for a home sale or purchase. OpenDoor relies on its own formulas for their pricing model. It is far ore convenient than going through a more traditional broker and the fee that OpenDoor charges for all of the convenience average between two to four percent above regular brokers.
What does the future look like for OpenDoor?
OpenDoor is making a big push for expansion in the upcoming 2017 year. They are currently serving Dallas and Phoenix metropolitan areas. We’ve heard rumors that they are planning to expand into an additional ten new markets within the next year.
Final thoughts
OpenDoor is truly a phenomenal new company that has hit the ground running. They offer advanced services for home buyers and sellers that add convenience and save time. Although their fees may be a few percentage higher than traditional brokers, the rates aren’t a lot higher and many satisfied clients find that saving time and cutting down on hassles make it well worth the slight cost increase. We see this company as a startup to keep an eye on with great expectations for their rapid expansion and success in the United States. They have tremendous financial backing and have built an impressive portfolio to date.
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