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A Helotes family in April became one of Opendoor’s first San Antonio area customers when they received direct mail advertising the company’s three-step process for selling a home.
The family had listed their home on the market with a real estate agent when they decided they didn’t want to deal with the hassle of showing their home, putting time and money into repairs and upgrades, and waiting for an offer, said Chris Westrom, San Antonio general manager for Opendoor.
His company promises a fair market-value offer in a few clicks.
“We help people avoid the hassle of a lot of the frustrating parts of the experience,” Westrom said. “I’ve bought and sold homes myself. I know how challenging the experience can be. Opendoor wants to help reinvent the process where this doesn’t have to be challenging. Instead of focusing on the hard parts of the process you can focus on the exciting things – like potentially buying a new home, having that freedom to move onto the next stage of your life.”
Opendoor launched in the San Antonio real estate market Tuesday, joining San Francisco-based company Perch, which began offering its services in the city earlier this month. The app- and web-based services allow customers selling a home to input their home address, answer a few questions regarding their home, and receive an algorithm-generated offer based on comparable, nearby properties – none of which requires listing the home on the open market.
If the customer accepts the offer, Opendoor buys the home and collects a 6-7 percent convenience fee. With customers setting the timeframe for when to close on the deal, Opendoor then makes any needed repairs or updates to the home before putting it up for sale again.
But a local real estate agent organization is skeptical of such services.
San Antonio Board of Realtors Chairwoman Lorena Peña urged prospective homebuyers and sellers to read the fine print and understand the full cost of using such a service.
“We continue to educate the community in making sure they know what they are getting into,” Peña said. “If this new way of doing things is good for them and their family, then that’s okay. But I truly believe in the value of what [real estate agents] bring to the table.”
Opendoor began its outreach to the local realtor community earlier this year, Westrom said, but the company has yet to have conversations with the Board of Realtors and its leadership. If a real estate agent helps Opendoor sell a home, the company says it will honor any agency agreements with a competitive commission.
Launching in a new market often comes with misconceptions about Opendoor, Westrom said.
“Anytime you propose a new way of doing business … there could be apprehension,” he said, adding that the level of trust in the product improves over time.
Phil DeGisi, Perch’s chief marketing officer, said his company aims to make buying and selling a home as easy as buying and selling a car.
The process of selling and then buying a home can take four months from start to finish – between listing it on the market, showing the home, receiving an offer, making any repairs, closing, receiving the equity payment, and making an offer on a new home, he said.
“The value proposition to a home seller really centers around convenience and certainty,” DeGisi said.
Headquartered in New York City, Perch launched last summer, he said.
The company identified San Antonio as its inaugural market largely because of its healthy home demand, DeGisi explained, adding that Perch has purchased about 30 homes in the area.
According to the San Antonio Board of Realtors’s latest housing market activity report, home sales in May were up 8 percent year-over-year. Its housing inventory stood at 3.6 months, which is the length of time it would take to sell out of homes if no new homes were added to the market. A balanced market has a housing inventory of around six months.
Peña said real estate agents know the intricacies and the nuances in the market and are well-versed in combing through housing contracts.
“We look at contracts every day,” she said. “We know the neighborhood and what it’s been doing the last few months.”
She also said an online company can’t help a person through the emotional aspects of selling a home.
For its part, Opendoor doesn’t aim to replace real estate agents, Westrom said. He hopes customers will see the company’s services as enhancing the home-buying experience even if they go the traditional route of hiring an agent.
“There’s no downside to requesting an offer,” he said.
Opendoor says it is quickly gaining in market share, with the company claiming to have reached 2 percent saturation in the greater San Antonio area.
Westrom said in a fast-growing city where people are looking for the convenience of moving in and out of the market, Opendoor hopes to ease the burden on the homeowners and prospective buyers.
“People understand the Opendoor experience here,” he said, “and really need that experience here.”