Opendoor betting on agent partners as it looks to boost revenue
“We’re in growth mode. We’re eager to get more great agent partnerships going because we have so many customers we want to serve,” the company said.
Key points:
- Opendoor announced this month that it is expanding its Key Connections referral program that connects agents with a seller from the start of the sales journey.
- “This is not simply a lead. This is truly being integrated,” Nick Boniakowski, head of agent partnerships at Opendoor, told Real Estate News.
- While the exact fee structure is still being refined, Opendoor will reward agents even if their seller decides to list on the open market, Boniakowski said.
Opendoor has announced the formal rollout and expansion of its seller referral program, Key Connections, which the proptech company sees as an opportunity to tap into an underutilized revenue stream and provide both agents and consumers with value. The company has also reintroduced and rebranded its agent partnership program as Key Agent.
The expansion of its agent offerings and referral program, which was highlighted by CEO Carrie Wheeler during the company's first-quarter earnings call in May, is designed to pair high-intent sellers with local agents at the start of their sales journey, Nick Boniakowski, head of agent partnerships at Opendoor, told Real Estate News.
"This is not simply a lead. This is truly being integrated — meeting with a seller at their kitchen table as part of our process," Boniakowski said during a phone call. "Agents are becoming a real component of how we're serving sellers, whether they choose our cash offer or list traditionally."
Presenting all the options
Opendoor is connecting sellers with agents from the start of the process, Boniakowski elaborated, where they can present and discuss a purchase offer from Opendoor or listing on the open market.
The idea is to "preserve optionality for customers," Boniakowski said, and create the ability to compare all options "in one integrated experience" that agents will lead with the homeseller in-person.
Since February, the company has tested the Key Connections program in 16 markets: Colorado Springs, Columbus, Denver, Detroit, Houston, Jacksonville, Las Vegas, Los Angeles, Miami, Minneapolis, Phoenix, Portland, Riverside, Sacramento, San Diego, and Tucson. Boniakowski said Opendoor hopes to take the program nationwide later this year.
Betting on incentives to attract agents
Key Connection continues to be invite-only, Boniakowski said, and the company is prioritizing agents who have "strong market share, prior Opendoor partnership experience, and proven expertise." Interested agents can sign up to receive notifications on the program's expansion and updates, in addition to requesting an offer on behalf of their seller client or bringing buyers who are considering an Opendoor home.
The exact fee structure and agent split for Key Connections is still being refined, Boniakowski said, but Opendoor will offer agents "rewards for either outcome" — whether a seller accepts Opendoor's purchase offer or decides to list traditionally. The company already offers a 1% commission to agents who bring customers to Opendoor.
Agents who partner with Opendoor will also get access to useful tools, Boniakowski added, such as the company's proprietary tech that it uses to provide cash offers on homes. The still-in-development assessment tool will allow sellers and agents to input information on the seller's home to get an accurate estimated value and potential sale price.
Moving toward hybrid selling models
In the end, Opendoor is seeking to tap into its large database of property owners and to broaden its business model. The new agent programs represent a "big opportunity for Opendoor to convert more customers," Boniakowski said, providing cash offers in-person via agents to sellers who may not be as tech forward or who simply just want an Opendoor offer as a starting point.
But the expansion of the company's partnership programs also reflect the iBuying sector's evolution toward hybrid models. "We're in growth mode. We're eager to get more great agent partnerships going because we have so many customers we want to serve," Boniakowski explained.
Main iBuyer rival Offerpad unveiled the expansion of its agent program a year ago, with CEO Brian Bair arguing that the company was differentiating itself by being "able to provide the listing" instead of just a referral by letting agents list Offerpad-owned properties.
A path to profitability?
The company has remained optimistic despite posting significant losses over the past several years, reporting a slight uptick in revenue last quarter. Converting more customers would no doubt put the iBuyer on more solid financial footing and rebuild confidence with investors.
In May, the company's struggling stock was at risk of being delisted from NASDAQ; a couple of weeks later, Opendoor announced it was planning a reverse stock split — or stock consolidation — to bolster its share price, while noting that it had also laid off 40 employees. Last November, the company made even more significant reductions, eliminating 17% of its staff.