The iBuying real estate model emphasizes certainty and convenience, providing home sellers with a competitive, all-cash offer without listing their home. Many agents see this as a threat, but others are capitalizing on the trend.
Consider a scenario where a client comes to you with a cash offer from an iBuyer—there are times when selling to a company like Opendoor makes sense and times when it might not. Your client will look to you to be the expert.
We’ll break down how we’re working with real estate agents, and how the iBuying business model can benefit yours. Last year we paid more than $50 million in referral fees and commissions to other brokerages, and this year, we expect to pay more.
Here’s what we’ll cover:
- Why should agents care about iBuyers?
- How agents are working with iBuyers
- Four ways agents can work with Opendoor
Why should I care about iBuyers?
While iBuying still represents a small percentage of total transactions, accounting for less than 1 percent of market share in 2018, the model is seeing increased adoption.
Opendoor is now buying and selling homes in over 20 cities across the country, and legacy real estate companies are shifting their entire business models to follow suit. Over 380,000 people have requested an offer from us, and every 27 minutes we close with a seller.
The scenario where clients start with a cash offer is also becoming more common:
– Mike Delprete, industry analyst as featured in REALTOR Magazine
While a lot is changing, a lot hasn’t. Selling a home is still a major financial decision that requires expertise. According to National Association of Realtors (NAR), 91% percent of sellers chose to sell with an agent in 2018, and 69% of sellers would definitely use their same agent again.
– Mike Delprete
Agents provide local expertise and guidance, and iBuyers provide certainty and convenience. Both have the same goal: find the best solution for their client.
So how can agents and iBuyers work together?
- Agents are becoming experts on iBuyers
- Agents are serving more clients with iBuyers
- Agents are using instant offers to their advantage
Be an expert on iBuying
Being an authority on the iBuying process, pricing, and value proposition places you in a position of authority. It can also differentiate your service.
There are a lot of misconceptions about iBuyers. For example, iBuyers are often described as home flippers, but the business model is fundamentally different. It’s a high volume, low-margin business that favors a service charge over price appreciation. It’d be difficult to reach high enough transaction volumes to justify the margins if the offers weren’t competitive.
While every iBuyer varies, most companies tend to buy mid-priced, residential homes that are in good condition. Unlike home flippers, the goal is to make minor updates for a quick resale, rather than targeting distressed properties that need major rehabs.
Teach your clients the basics of Opendoor
A good place to start is to understand when the iBuying model can serve your clients’ needs.
5 scenarios when an iBuyer might be the right fit:
Serve more clients with iBuyers
While consumers can work with Opendoor directly, many seek full-service guidance, local expertise, or negotiation skills, giving agents the opportunity to expand their offering with us.
Here are 4 ways to work with Opendoor:
- Request an offer for your seller client
Seller pays Opendoor service charge + your commission. Your commission is between you and your client.
- Refer an unrepresented seller
Submit a referral form and get 1%. Confirm you’re not receiving a listing commission and seller hasn’t requested an Opendoor offer in last 30 days.
- Represent a buyer on an Opendoor home
Earn a competitive commission when your client purchases an Opendoor home.
- Partner with us
Qualify to get exclusive, high-intent referrals. Pay a referral fee only when the deal closes.
1. Request an offer for your seller client
Many agents already have a listing agreement in place with their clients when selling to us. We honor the listing agreement. Your client pays you the listing commission and then pays Opendoor’s brokerage the buying commission.
For listed homes, we deduct the buyer agent commission from our service charge. Whether your client’s home is listed or unlisted before the sale, our service charge ends up being exactly the same, and you collect the commission you negotiate. We know this can be confusing so here’s an example…
How commissions work when selling to Opendoor:
|Home is unlisted||Home is listed|
|Buying commission / co-broke||n/a||3%|
|*Opendoor service charge||7%||4%
|Total cost for client
Opendoor service charge + Listing commission
*Opendoor service charge varies for each property and can range from 6-13%
2. Refer an unrepresented seller
Another way agents work with us is through referrals. Opendoor Brokerage pays a 1% referral fee to agents who refer an unrepresented seller to buy an Opendoor home—think of this like a broker-to-broker referral.
An agent qualifies for a referral fee if the seller is not paying a listing commission to the agent, and the seller has not requested an offer directly from Opendoor in the last thirty days.
3. Represent a buyer on an Opendoor home
For represented buyers who choose to purchase an Opendoor listed home, we pay a standard commission to agents based on statewide norms. Our MLS listings include co-broke commissions.
Unlock any Opendoor home using our mobile app. With Self-Tours from 6am to 9pm daily, your clients can visit homes on their schedule to truly get to know the property before and after a contract is signed. Once they find the one, we make it easy for you to submit an offer on their behalf.
4. Partner with us
We have an exclusive Agent Partner program, where our brokerage sends high-intent referrals to highly-rated, trusted partners with significant transaction experience. Unlike other programs, Opendoor Agent Partners only pay a referral fee when the deal closes.
In Dallas-Fort Worth, Phoenix, and Raleigh-Durham, we also have partnership opportunities for agents at any stage of their career. Buyers can now use the Opendoor website or app to start an offer on any property on the MLS. At the buyer’s request, our brokerage pairs them with a local agent to help submit the offer and walk them all the way to close.
Use instant offers to your advantage
Is there a better way to start a listing appointment than “Getting a competitive, all-cash offer on your home is the easy part, let’s talk about your goals and weigh your options.”
Sellers often have an aspirational number in mind, and it can be useful to have a price anchor that’s more than an estimate. There’s no risk or obligation in requesting an offer, it’s free and you get the benefit of transparent pricing.
As a neighborhood expert, you might be confident you can net your client more money or help them save on fees. Or maybe you think our offer is a good alternative. The point is you have a tangible place to start and a useful tool for negotiating with potential buyers.
Think about all of the on-demand services you use today for entertainment, transportation, and ecommerce—why can’t moving be just as easy?
We believe there will always be a need for personal relationships when making a major life decision, which is why we’ve always worked with real estate agents. Our hope is that if we can make it easier to move, people will move more often, and then both iBuyers and agents can help more people.
Get started working with us
Present more options, serve more clients, and forge stronger relationships with Opendoor. We honor your agreement with your client.