iBuyer Startup Looking to Offer Streamlined, Full-Service Platform for Real Estate Transactions
“If you build it, they will come.”
That’s the line of thinking real estate iBuyer Opendoor seems to be subscribing to with its streamlined suite of real estate offerings.
Opendoor announced recently that it is moving forward on previous plans to expand into the mortgage business with a new business arm: Opendoor Home Loans. The service will start off in Arizona and Texas, and is open to all consumers residing in these states regardless of whether or not they buy a home through Opendoor.
The latter location has been holding a pilot program for the last few months—there, the closing process has been shortened to 27 days, on average, according to Curbed. In addition to its existing iBuyer program, Opendoor has said in the past that it is looking to extend its suite of services, covering the entire real estate transaction all the way from financing to offer to close through a single platform.
Touting the service as “simple and frictionless,” as they’ve purported to make the buying and selling process, Opendoor says it hopes to cut down the time it takes to obtain financing while also saving consumers money. The company states it is offering “competitive interest rates, no lender fees…and up to $1,000 towards buyers’ closing costs,” for a limited time. In addition, Opendoor guarantees to credit the buyer $100 per day for any delays past the scheduled closing date. In terms of a lender, Opendoor says it pairs the borrower with their own mortgage consultant that provides “guidance, updates and support at every step.”
“Financing is one of the most complicated and intimidating parts of a home purchase. It typically takes 45 days for buyers to finance and close on a new home. That’s 45 days of uncertainty, anxiety and stress that we can cut in half with Opendoor Home Loans,” said Nadia Aziz, head of Opendoor Home Loans, in a blog post on the company website. “In the last 10 months, we’ve built a mortgage business from the ground up that combines savings, convenience and certainty into a simpler, more transparent process for buyers. It takes us one step closer to providing an end-to-end experience where you can buy, sell or trade-in a home in just a few clicks.”
The company’s website states borrowers can get prequalified in minutes, currently offering conventional fixed-rate mortgages in 30-, 25-, 15- and 10-year terms, and adjustable fixed-rate mortgages in five-, seven- or 10-year fixed terms, with adjustable rates for the remainder of the 30-year lifespan. While the company does not offer FHA or VA loans currently, some borrowers may be eligible for as little as 3 percent down on conventional loans, states the website. There is a minimum credit requirement of 620 for all Opendoor home loans.
“To build Opendoor Home Loans, we started with what we’ve learned from buyers. Having helped over 50,000 customers buy or sell with Opendoor, and hosted over 1 million on-demand self-tours of Opendoor homes, we know our customers value flexibility, simplicity and speed,” Aziz added. “We’ve taken those same principles and applied it to the home loan process.”
Opendoor’s mortgage business comes at a time when the company is looking to widely expand its services to compete in the marketplace. In July, Opendoor partnered with discount-brokerage Redfin to reach more markets—Redfin has also branched out into lending. Opendoor is also facing competition from fellow iBuyer Zillow, which announced its own version of a lending subsidiary earlier this year.
Liz Dominguez is RISMedia’s associate content editor.