When the COVID-19 pandemic struck Texas, certain businesses — particularly e-commerce, supermarkets, cloud-computing vendors, and the like — were already poised to survive and possibly thrive.
Now, you can count Opendoor among companies finding success in tough times.
This week, Opendoor is expected to officially unveil its $4.8 billion initial public offering, merging with Social Capital Hedosophia Holdings Corp. II. Opendoor, a San Francisco-based iBuyer brokerage, has been around since 2014 and claims it has processed 600,000 requested home offers.
The company provides instant-offer home buying and selling programs in Dallas-Fort Worth and 20 other metro areas.
Operating out of its Mockingbird Station office in Dallas, Opendoor has guided more than 6,000 customers in the sale of their homes. Opendoor has a big Texas presence with offices in Austin, Houston, and San Antonio.
On its website, Opendoor says that since 2015 it has infused over $75 million into the D-FW small-business economy.
Sales of existing homes spurred by low-interest mortgages have kept the housing market humming in the North Texas area and nationwide.
An Opendoor spokeswoman says the company can’t comment before the merger. But in an appearance on CNBC’s Squawk Box, Social Capital CEO Chamath Palihapitiya outlined five reasons why an IPO makes sense:
- Lack of resale inventory and new-home expansion has constrained supply.
- Increasing state taxes and elimination of state and local tax deductions are creating relocation decisions.
- Working from home is accelerating everything.
- 75 million millennials are starting to enter the housing market.
- Federal Reserve interest rate policy will keep rates near zero for a long time.
“This is a business very much proven and ready for prime time,” he says.
Opendoor’s strategy is simple: It operates as a middleman as opposed to a matchmaker. Rather than homeowners showing their home, they can visit Opendoor.com, and choose options to obtain a quote or instant cash offer for their home. Opendoor can either buy the home or help the sellers list it.
On its website, Opendoor also claims that it can manage closing dates “to avoid double-moves and double-mortgages.”
In touring or buying a home, Opendoor will emphasize proper COVID-19 safety guidelines. Opendoor provides an app for scheduling private self-tours.
Opendoor might repair or upgrade the home before putting it on the market to sell. The company generates revenue from its 5 percent fees and on the price spread at the home-selling transaction.
Grand Prairie real-estate agent Valli Sears-Jones says Opendoor works for her agency and she’s not had a bad experience.
“We operate out of the box, so we know not every client is going to be the same, not every transaction is the same,” she says. “Opendoor, like all these other iBuyer [brokerages], help us out when our clients need to sell and sell fast.”
Learn More at Webinar on Tuesday
Need a breakdown of what this Opendoor IPO means?
On Tuesday, Mike DelPrete, a real-estate tech strategist and scholar-in-residence at the University of Colorado, will present a webinar at 3 p.m. Click here to attend.
In the hour-long webinar, DelPrete is expected to analyze the charts and the latest data and take questions. DelPrete will talk about the latest national iBuyer data, Opendoor’s competitive environment and challenges, the new Opendoor playbook, and more.