If you’re thinking about selling your home, you’re probably keeping a close eye on the real estate market, which has experienced some wild and historic milestones over the last couple of years. In 2021, mortgage rates dropped to an all-time low of 2.65%; just a year later, they climbed to 7.08% – the highest spike in 20 years, which is one reason housing inventory across the country has reached a record low.
The speed of these fluctuations is unprecedented. What should we expect in 2023? Many sellers are still cautiously on the sidelines, due in part to a traditional listing experience that can be stressful and risky. Here are some reasons why:
But, life shouldn’t stop when there are always important reasons to move. In fact, historical data shows that people will move regardless of shifting economic conditions or timing. During the Great Recession in 2009, for example, there were 4.34 million real estate transactions. Today, we see people relocating for a variety of reasons: starting a new job, upsizing their home for a growing family, navigating life changes — or embarking on a journey to explore the world, like Opendoor customer Mark Blackburn did.
Sell Direct for a simple, certain sale
Mark Blackburn at the Icehotel in Juggasjarvi, Sweden in the Arctic Circle.
A condo owner in Virginia who bought his property in 2010, Mark made a career change and wanted to embrace the newfound flexibility of remote work. When he decided to sell his home in October 2022, he looked for options that would give him a good price and require minimal effort to sell his condo.
“I was talking with my realtor friends and working with contractors to understand how much potential renovations might cost when I thought, ‘Why not get a free estimate from Opendoor?’,” Mark explains. “With Opendoor’s offer, I could look at all of my options to sell while I decided what I wanted to do. The economy and real estate market felt so uncertain, I was comforted knowing I had the certainty of a cash offer already in my back pocket.”
With the Opendoor offer in hand, Mark had peace of mind and was able to fully research his selling options. Ultimately, he found that Opendoor’s cash offer was the best fit. Not only was there zero pressure or a requirement to commit, but Mark was able to sell his condo without having to keep it clean for open houses he’d have to host, or perform repairs. “Opendoor empowered me to sell my home quickly and easily,” he smiles. “Now I’m north of the Arctic Circle, beginning my bucket list quest to explore 14 countries.”
“List with Certainty” for the best of both worlds
For sellers like Mark, whose top priority was convenience, Opendoor’s cash offer was the right choice. But for those with a bit more flexibility on timing or who want to maximize price, we recently introduced “List with Certainty.”
Currently available in Charlotte, customers who choose to list with Opendoor get the certainty of our cash offer — locked in for 60 days — and work with one of our local agents to list their home through the open MLS market, leveraging the expertise of the Opendoor brokerage that’s sold tens of thousands of homes. For those who aren’t getting the offers they want, listing with Opendoor empowers sellers with the certainty they can sell — they can stop showings and accept our cash offer at any time.
Twenty percent of our eligible Charlotte customers are already taking advantage of an Opendoor offer while listing their home with us, and in the coming months, we’re bringing this feature to more markets.
How we price your home
Your home is likely to be your biggest financial asset. In addition to providing stress-free selling options to homeowners, we aim to empower sellers with all of the information they need to make their best choice. Here’s how we approach pricing — whether you’re getting a cash offer from Opendoor or we’re helping you list your home on the MLS.
You may have a sense of how much your home could be worth based on homes that have recently sold in your neighborhood. Many real estate agents use these comparable sales (“comps”) to suggest a listing price. But no two comps are the same, so accounting for differences in home features is challenging to do manually or consistently, resulting in a listing price that can be fairly subjective.
At Opendoor, our process is different. We’ve spent the last nine years building a high-quality set of real estate data across homes in the U.S. Our automated valuation model compares individual features for hundreds of comparable homes, and we consider everything from home details and recent listings to current market conditions and broader economic trends.
Here are a few examples:
Home details: Besides straightforward features like the number of bathrooms, bedrooms, and square footage, we also take into account more granular features like floor type, finished basements, proximity to transit and schools, and level of street noise.
Recent listings: If your comps are not current, you’ll want to adjust for any price appreciation based on trends in your market. Even with just a few comps, it is incredibly difficult to make precise adjustments. It turns out computers are really good at this task, so we use computing power to crunch a lot of the data to keep listings current. Then, our real estate experts play an essential role in fine-tuning the data sets.
Current market conditions + broader economic trends: Season to season, or even as quickly as month to month, there are many drivers that come into play when pricing a home. From available inventory, current interest rates, and migration trends to social dynamics like schooling and remote work, should all be considered when predicting home appreciation.
We created a proprietary algorithm that can do these sorts of calculations instantaneously for hundreds of comparable homes. Then we call on human expertise, so that our model factors in insights from our team of data scientists, engineers, and pricing experts to consider the nuances of local market conditions. We’re using innovative new tools to sense housing trends before they develop, so that we can provide offers to home sellers while ensuring certainty each step of the way.
Selling a home the traditional way is often stressful and full of unknowns — especially when it comes to understanding the value of your home. This is why getting a cash offer from Opendoor is a great first step in your journey. This provides price transparency and the certainty of an offer in your back pocket while you explore all options to sell your home.
We’ve proudly helped more than 200,000 customers in more than 50 markets across the U.S. If you’re selling a home, see how we can help.
Brian Tolkin is Vice President of Product at Opendoor.