Imagine if you could sell your current home for a cash offer at a time that coordinates with the closing date of your new Lennar home. Lennar has teamed with Opendoor, an online real estate marketplace that radically simplifies home buying and selling, to create the New Home Trade-up Program to do just that. Learn more about this amazing trade-up program in this Tennessean.com article by Jamie McGee.
Opendoor, a San Francisco-based real estate company, has joined the Nashville real estate market, buying as many as eight homes a day through its online platform.
Along with a separate real estate company Felix, Opendoor provides new options for home sellers that accelerate and simplify the home sales process. With the backing of institutional investors, Opendoor will pay cash and make offers within 48 hours.
“Today if you own a home and want to sell it, it is a pretty painful process,” PJ O’Neil, who launched the Opendoor Nashville market, said. “We are making this as easy on sellers as possible.”
Through Opendoor, a seller can avoid the headaches associated with making home repairs, showing the property and hosting open houses. The company makes an offer on a seller’s home based on uploaded photos and the address they send, and any repairs the home needs are covered by the seller. A seller can back out at any time if they do not agree with Opendoor’s prices.
Opendoor earns revenue by charging a service fee about 6 to 6.5 percent of a home sale price, which is comparable to what real estate agents charge.
The downside for a seller using Opendoor is that they miss the opportunity to test the market, O’Neil said. But, they also miss out on the hassle of painting, carpet refurbishing, keeping a clean house as they seek buyers and an uncertain timeline for the sale.
Institutional investors and banks provide credit lines for Opendoor, allowing the company to make cash payments to sellers. The seller can then make cash offers on a new home, giving them a competitive edge as a buyer.
Once Opendoor buys the home, it typically takes two weeks to carry out repairs before putting it back on the market. The Opendoor app allows home shoppers to tour a home at between 6 a.m. and 9 p.m. without an appointment, streamlining the home shopping experience.
“When you are ready to tour it, it’s as easy as showing up to the home, pulling out your phone, pushing a button on our app and the door unlocks seamlessly,” O’Neil said.
Opendoor chose the Nashville area for expansion because of its strong job growth and housing stock, O’Neil said. Because it targets homes that were built after the 1950s and cost between $100,000 and $500,000, most of its activity has been in counties surrounding Davidson County, rather than in the city’s core
Opendoor employs 17 people in Nashville and hopes to double its team by next year.
“We are very bullish on this market and are really excited to continue to grow here,” O’Neil said.
Opendoor launched in May in Nashville, buying a home a day for two months. It has since accelerated purchases about three to five a day. In early August, eight homes were sold in a single day. The company began in Phoenix in 2014 and today buys about 1,400 homes a month across all markets.
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