Opendoor looks to become big player in Twin Cities housing market

StarTribune

 Imagine if you could sell your current home for a cash offer at a time that coordinates with the closing date of your new Lennar home. Lennar has teamed with Opendoor, an online real estate marketplace that radically simplifies home buying and selling, to create the New Home Trade-up Program to do just that. Learn more about this amazing trade-up program that is offered in Minnesota’s Real Estate Market in this StarTribune artile by Jim Butcha.


Opendoor makes unsolicited offers, streamlines sales process. 

With house prices teetering at record highs and buyers outbidding one another in some areas, it seems the last thing the housing market in the Twin Cities needs is more competition. But there’s a new buyer in town and it has lots of cash.

San Francisco-based Opendoor has already mailed thousands of unsolicited cash offers to homeowners across the Twin Cities.

“We’re like CarMax on steroids,” said P.J. O’Neil, a company executive who likens the Opendoor concept to the one used by companies that offer car owners tempting cash-on-the spot offers to encourage them to trade up.

Opendoor is a fast-growing national tech company that hopes to buck the traditional buying and selling process by eliminating the “stress points” in a typical transaction. The concept is meant to attract homeowners who want to forgo all the normal sale preparations including fix-up, staging and showings, and sellers set the closing date or can cancel the deal at any time.

Opendoor makes money by charging sellers a fee that ranges from 6 to 8 percent depending on how much work needs to be done. Though the company resells the houses it buys, Opendoor insists it’s not a house flipper in the traditional sense. It said it won’t buy houses that need too much work.

“We don’t buy ugly houses, we buy beautiful and not-so-beautiful ones,” said O’Neil, who has led the company’s expansion into the Twin Cities.

Opendoor’s Matt Bohlinger, left, and P.J. O’Neil chatted with owners Laura and Jason Riviere at the Farmington home they want to sell. DAVID JOLES • DAVID.JOLES@STARTRIBUNE.COM

The company is also trying to streamline the buying process. After it acquires a house and readies it to be resold using local contractors, the houses are equipped with a security system and other technology that enables house shoppers to do self-guided showings all day, every day after downloading an app that provides instructions and details about the house. Buyers also get a 30-day money-back guarantee.

Opendoor is already in 10 major metros across the country, but the Twin Cities is its first “winter market.”

The company is one of several national “iBuyers” that are developing internal valuation models that enable them to make offers on houses sight unseen. Opendoor is the first in the Twin Cities, but several are working their way across the country. They include Knock, OfferPad, Redfin and Zillow, which announced earlier this year that it was aggressively expanding its Zillow Offers platform.

Because of the complexity of using software to value real estate in a new market, Opendoor is focused on properties in the Twin Cities that were built since 1970 and are worth $100,000 to $500,000.

In the Twin Cities, the company is appealing to people like Keith and Jessica Landgrebe, who have been itching to move but are unwilling to deal with the hassle of tricky timing and the possibility of having to move to temporary housing with two dogs, two cats and a baby.

So when an Opendoor offer recently arrived in their mailbox, they were intrigued.

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