Opendoor doubling down on ‘the trusted agent partner’
The top iBuyer looks to build its referrals to agents as revenue slips 2% but losses ease; Offerpad, meanwhile, saw revenue drop 44% and losses improve by 14%.
Opendoor has been cutting its losses after a brutal 2024 and teaming up with brokerages and portals, but says the real bright spot on the horizon is a shift in its partnership with agents.
The real estate industry's dominant iBuyer has been working with agents for years, CEO Carrie Wheeler said during Opendoor's Q1 earnings call on May 6. Now, "instead of agents coming to us," Wheeler said, the company is "flipping the script" and bringing referrals to select agents earlier in the process.
These are agents who have already been thriving in Opendoor's existing programs — via a pilot in 11 unspecified markets. It's a strategy that its leading competitor, Offerpad, has also been embracing.
Wheeler said the benefits of connecting sellers to "the trusted agent partner" are numerous: For one, they "learn more about the seller's needs," she said. "They can provide more local expertise, and they're also completing an in-house assessment on our behalf. It's a way to improve conversion (and) speed."
What Opendoor had to say
What the new emphasis on agents means for Opendoor's original model: "I do think there's a segment of customers that will very much want that direct-to-consumer, self-service interaction that we pioneered," Wheeler said. And Opendoor will "be very happy to do that on a one-to-one basis."
"It's important to appreciate that today, a meaningful percentage of our business already comes from agents, who come to us every day and want to bring a cash offer to their client, because they want to give their client choice," Wheeler said.
What about the future of its Opendoor Exclusives marketplace? "We're currently, today, in Dallas, Charlotte (and) Raleigh, and we're holding there for now," Wheeler said. Its marketplace "is not a material contributor to revenue or earnings for us today, and given the pause and the pullback we're seeing in the housing market right now, we are going to evaluate the best path forward."
It's all about agents: "I really believe that sitting here today, our new expanded partnership channel is a much more immediate path to allow us to serve more customers, monetize more of that funnel that we have," Wheeler said.
Key numbers
Revenue: $1.2 billion in the first quarter, down 2% year-over-year.
Cash and cash equivalents: $559 million, down from $671 million at the end of 2024.
Net loss: $85 million, improved from $109 million during the same period the year before.
Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization): A loss of $30 million versus $50 million in Q1 of 2024.
Units acquired/sold: 2,946 homes sold, a drop of 4% year-over year, and 3,609 homes purchased, a 4% increase from Q1 of 2024.
Inventory: 7,080 homes with a value of $2.4 billion, up from 5,706 homes with a value of $1.8 billion in Q1 of 2024.
Offerpad 'focused on building a strong, flexible foundation'
Offerpad, the other major player in the iBuying space, reported a 44% decrease in revenue compared to the first quarter of 2024, dropping from $285.4 million to $160.7 million. However, the company did cut its losses to $15.1 million, a 14% improvement year-over-year.
Offerpad Chairman and CEO Brian Bair said in a statement that the company is "focused on building a strong, flexible foundation — enhancing the customer experience, driving efficiency, and scaling programs like Renovate and our Agent Partnership Program — so we're not only operating for today's market, but positioned to accelerate as transaction volume normalizes."