Farhad Manjoo of the New York Times published an article this morning about Opendoor – a startup that I have written about multiple times on this blog – called, The Rise of the Fat Start-Up. (His definition of “fat” is that the startup owns lots of hard assets, which considered atypical in tech.)
Below are a couple of interesting tidbits from the article:
Opendoor has raised over $300 million in equity and over $500 million in debt since inception.
Opendoor plans to be in 10 cities by the end of this year.
Average commission charged on Opendoor is 7.5%, which is higher than a traditional real estate agent and higher than what was quoted before in the press. The higher % is because of certainty and convenience.
Opendoor offers a leaseback option if you’d like to stay in your house for a period of time after you’ve sold it.
Their conversion rate (offers made to closings) is about 30%.
Other startups are now in the market with similar models, including Offerpad and Knock. Zillow is working with Offerpad on a pilot. Someone is starting to feel threatened.
The article also quotes a blogger and real estate analyst named Mike Delprete. Heads-up: His blog is called “Adventures in Real Estate Tech.” I’m sure this will appeal to many of you. I obviously just subscribed.