Opendoor, an online marketplace where investors can purchase properties directly from the owners, is expanding its reach across the country, setting a goal of having a presence in 50 U.S. markets by the end of 2020. The company said it plans to operate in 12 new markets in the next year alone. Over the next few months, it will focus on Sacramento, Calif.; Riverside, Calif.; Denver; Portland, Ore.; Austin, Texas; and Jacksonville, Fla. Opendoor says expanding into those markets—along with the 10 cities it currently operates in—will make its service accessible to about 15 percent of the U.S. population.
Wall Street is heavily backing the concept of “iBuyers”—companies that enable real estate purchases to be conducted entirely online. Two months ago, Opendoor officials announced they had raised $325 million in funding from investors.
Home sellers who use iBuyer firms, such as Opendoor, Offerpad, and Knock, are often able to obtain a quote from the companies within hours. The companies buy the homes and fix them up, if needed, for resale.
- Opendoor’s next market expansions will be in Sacramento, California; Riverside, California; Denver, Colorado; Portland, Oregon; Austin, Texas; and Jacksonville, Florida.
- The company said that by expanding into those markets, it will be able to reach approximately 15% of the total population of the U.S.
- All in all, the company plans to grow by 600 employees and add 12 new markets in one year, with big plans beyond that.
Real estate pros argue that using such a fast food-style method for a home sale could prove to be more costly to sellers. There are often onerous fees for the convenience of the platform, and sellers may earn less on the sale than if they used a real estate professional to advertise the home on the open market.
Opendoor first began buying and selling houses in Phoenix and Dallas in 2014, and the company recently teamed up with homebuilders for a “trade-in” program. A homeowner can sell their home to Opendoor and then buy a new home from Lennar or other affiliated homebuilders in one transaction.
Now, in the eight months since then, the company has more than doubled its headcount and currently has 825 employees. And it plans to grow to 1,000 employees by the end of the year.
All in all, the company plans to grow by 600 employees and add 12 new markets in one year, with big plans beyond that.