Last week, Dickason Law Group put a poll out on Facebook and Twitter to seek some insight on the opinion of Non-Agent Brokerages, such as Opendoor, Knock, and OfferPad. We targeted our Real Estate agent friends, as you would likely be most affected by their business activities. Before examining our poll results, we wanted to look further into these companies to give you an idea of what they are all about.
We reached out to Opendoor to see if they could answer some of our questions. Their responses are as follows:
How does the process with OpenDoor work?
If you’re selling, Opendoor enables you to sell on your own timeline without ever listing on the market. Simply enter your address at opendoor.com and tell us a bit about your home and you can receive a competitive offer backed by local real estate expertise and the most current market data. The offer will break down the entire transaction, including Opendoor’s service charge and the estimated net proceeds you’ll make in your sale.
If you’re happy with your offer, we’ll arrange for a free home assessment on your schedule, and you’ll have the opportunity to choose a move date between 3 and 60 days.
If you’re buying, you can use the Opendoor app to instantly unlock and tour homes any day of the week from 6am to 9pm. Simply use the app to find an available home, tap to unlock and enjoy your own personal tour. Once you find the home you love, you make an offer on it through the app, or get in touch with an Opendoor Home Advisor who can answer any questions you have about selling the home.
Finally, you can sell your current home and buy your dream home in with Opendoor Trade-In. Our Trade-In program lets customers choose from any home on the market (not just an Opendoor home) sell their current home to Opendoor, and close on both homes in the same day.
Can Real Estate agents work with OpenDoor?
Represented seller: If you represent a seller and they agree to sell to Opendoor then we honor the listing agreement.
Direct seller: If you have a unrepresented seller, you refer them to us, and they sell to Opendoor then we pay a referral fee to you.
Represented buyer: We pay out a commission for bringing a buyer to us
Direct buyer: We pay out a referral fee if you refer a buyer to us and they purchase a home from Opendoor
How is OpenDoor different from brokerages with agents?
A free, competitive offer in just a few clicks
The convenience of skipping showings and open houses
Avoiding costly double-moves and double-mortgages
No contingencies or fall through risk
Expert support from offer to close
** Note: we also reached out to Knock and OfferPad for statements, but at the time of writing, had not heard back. However, based on our research, they work very similarly to OpenDoor, and do not cut agents out of the equation.
On Facebook, we found that 58% of voters said that this business model was a threat to the industry while 42% said that it was just a fad. One of our favorite agents at DLG, Jamie Sternlieb, mentioned an interesting point, “I think it depends on the area and the seller. Some of these options are good for distressed or hard to sell properties where a seller needs immediate cash and will take a less than market value for a quick cash close.”
On Twitter, we found that that 33% of voters thought that these companies pose a threat, 50% voted that it was just a fad, and 17% voted that this is the way of the future.
Our take? We do not work with companies like Opendoor, and will not pursue business relationships with them. From a closing attorney’s standpoint, we value the personal relationships we’ve built with our Real Estate agents, and believe they provide better expertise in both product knowledge, valuation, area demographics, and school quality, than these non-agent brokerages .
At DLG, we believe that making personal connections with everyone involved in the transaction is the way to continued mutual success. From single point of contact CRMs to our network of savvy attorneys, we make sure that our trained professionals guide you and your clients through the entire closing process with ease, and with the expectation and understanding that the relationship we build with you, is very similar to the relationships you build with your clients. There is no relationship to build at an agentless brokerage.
These non-agent brokerages are also very limited in the type and value of properties that they can buy and sell, and where they are able to close. Like most of our agent friends, Dickason Law Group can close residential, commercial and short-sales at any value. Opendoor specifically, will not make an offer on any property that exceeds $500K and you can forget about them facilitating a short sale.
What about closing location convenience? Sorry, not available. Opendoor requires all closings to be performed by the same settlement company in the same location, regardless of the client’s needs. Opendoor’s inventory is also limited to six Metropolitan areas, while Knock only has a presence in two. With such limitations, we feel that it does not make sense to close with non-agent brokerages.
Lastly, DLG focuses on one thing: Real Estate Closings. We are not a “full-service” firm. We have no other departments distracting our attention or resources. All of our time and energy is spent being the best partners we can be to our agent friends. Like you, we are experts in our field, and we strive to deliver top-notch service at EVERY closing. As your success is our success!