Now, Opendoor is rolling out a larger program in which any customer buying a new home will have this option in any of the nine markets where Opendoor operates. Opendoor expects the program to be available in roughly 20 markets by the end of the year.
“Very often there’s the friction involved in figuring out how to sell the first home,” said Stuart Miller, chief executive of Lennar. This program “takes the friction out of the transaction.”
Nate Harbacek, Opendoor’s head of corporate development, said the aim is to replicate the experience of buying a new car. He pointed out that the current process of buying a new home on the contingency of selling an existing one can be pricey and have a negative stigma. Opendoor will give a cash offer for a house within 24 hours, he said. The program appeals to home builders because a large share of their customers already own a home and many of them need to use the equity from that property to help with a down payment for a new one.
Mr. Miller said buyers delay trading up for a new home because they don’t want the hassle of painting, fixing things up and showing their home.
“Now we can speak to potential customers and say, ‘You don’t have to procrastinate. We can help facilitate a group that will buy your home,’” Mr. Miller said.
Opendoor offers cash to homeowners based on a market analysis, and turns around and resells the homes, aiming to make a profit in fees and potential home-price appreciation after making modest improvements. The company will work with new-home buyers to allow them to wait until their new home is ready before they move out, which can take months.