To all the agents in the house,
I wanted to return to last week's subject of Opendoor -- both because many of you passionately relayed your displeasure of working with the company, but also because there are -- maybe! -- glimmers of hope for the long-term viability of Opendoor and other iBuyers including Offerpad and Knock.
First, the displeasure. I asked about Opendoor's agent incentive program -- whether you might be tempted to let your client "instasell" a house and get increasing commissions from Opendoor depending on the number of houses you refer to the company.
Many, but not all, said this does not change their anti-Opendoor stance, with a few stating it was not only against their financial interests, but also their client's.
"First, the idea that they offer a bonus or almost a bounty to agents who convince their sellers to accept an Opendoor offer is a huge conflict of interest in my mind," said one broker/owner. "The idea that they can buy off an agent just by increasing the bonuses is scary."
Another agent raised the specter of sellers claiming their agent breached their fiduciary duty. "Sellers could sue their agent who convinced them to sell to Opendoor, and not potentially sell for more in an open, competitive market that has seen a record sales price increase," the agent claimed.
But other agents responded to my prompt, "Are you open to working with Opendoor?" with a simple, "Yes." They are keeping an open-mind, these agents said, about how the company is evolving.
Critically, consumers may also be evolving their attitudes. A survey from 1000watt of 600 homeowners found that 38% prioritized speed and certainty of the home sale process as opposed to just getting the highest price possible. Consumer fees to Opendoor and other iBuyers are also down, from an average 7% last year to 5% this year, according to a Zavvie survey that focused on a growing number of "power buyers" who use iBuying to sell their home as they hunt for a new one.
Finally, Opendoor's mortgage attach rate, that is homebuyers willing to also originate a mortgage with the company, has gone from miniscule to not as miniscule. The company's attach rate in Arizona (Opendoor is San Francisco-headquartered but also has a hub in Phoenix) jumped from 2% to 12% in the past year, according to research from industry consultant Mike DelPrete.
The quarterly earnings of Opendoor, Zillow, and soon to go public Offerpad are each expected in the coming two weeks. It bears watching if these reports point to more signs of slight optimism for a generally money-losing iBuying industry -- whether agents like it or not.
Sincerely,
Matthew Blake
Senior Real Estate Reporter
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