Opendoor is an iBuyer service that purchases homes from sellers, makes small improvements, and then sells them at a premium. Opendoor also offers trade up broker services that help sellers buy their new home before selling their current one. Opendoor does employ agents and can also help buyers and sellers list or purchase homes similar to a traditional brokerage.
Sellers submit their address to Opendoor, and Opendoor uses its internal valuation models to make an offer. If the seller accepts, Opendoor schedules a home inspection that results in itemized repairs which must be made by the owner or Opendoor prior to the sale. After repairs are completed, Opendoor will then purchase the home from the seller, make any necessary improvements, list the home for sale, and sell the home to a new buyer.
According to most sources, Opendoor charges a ~5% service fee to sellers who directly sell to them or a 5% commission to sellers who list with Opendoor. Opendoor provides a rebate of up to 1.25% for buyers who also sell with Opendoor.
Opendoor primarily generates revenue through service fees on each home sale. Opendoor can also make money on the price appreciation that occurs at the time of the home purchase and the time of sale. Opendoor also can generate revenue from ancillary services it offers such as home loans and title and escrow. Because Opendoor also employs agents, it also makes money from traditional brokerage listing commissions.
Opendoor is publicly traded. It is listed on NASDAQ with the ticker OPEN.
Opendoor employs agents as full-time employees. As a result, agents are paid a salary and smaller sales commission by the brokerage rather than being paid entirely based on sharing commissions via a traditional commission split.
Opendoor employs agents as full-time employees rather than independent contractors.