Editor’s note: Led by a Duke graduate and US Navy veteran and backed by more than $320 million in venture capital, Opendoor is now doing business in the Triangle. Here’s the backstory about the company as well as the experience of the firm’s first Triangle customer.
RALEIGH – Ms. Tremaine Roberts bought a modest 1,200 square foot two-bedroom townhouse in Raleigh’s Brook Forest neighborhood along Old Wake Forest Road and Falls of Neuse Road in 2003 at age 23, following through on her goal to invest her hard earned money early in her life. The neighborhood boasted dozens of houses, all new construction, in a rapidly developing part of the city halfway between North Raleigh and Downtown.
A young professional, Roberts began a new job and began to build her home and life in the community. Roberts weathered the economic downturn and crash of the housing market, dutifully making mortgage payments on the property even when she lost her job in 2013.
To get back on her feet, Roberts accepted a contract position in Greensboro and commuted to work every day. In a search for a more stable position, Roberts interviewed in 2014 for a position based in Charlotte and was offered the full-time role. Roberts accepted, knowing that she’d likely have to balance living in and maintaining a home nearly 170 miles away from her job. But the career opportunity was too important to turn down.
She’s made it work—and thrived with her new company, where she is a quality assurance professional that works with the fraud investigation team. In four years, she’s earned four promotions.
“I’m on stable ground, and I decided I want to be here in Charlotte,” said Roberts. More and more of her life was in Charlotte, and though her family was back in Raleigh, she began considering putting her home on the market in November.
“I was ready to close that chapter and move here,” said Roberts, “and stop commuting back and forth.”
Preparing to Move
Roberts knew there was work to be done to ensure that her townhouse was ready to hit the Triangle’s booming real estate market. Though she started planning in November, she hoped that she’d be able to list the home in January or February 2018.
“It’s difficult when someone is living in a home to show your home,” said Roberts. Repairs would also likely need to be made, as she hadn’t made many updates since purchasing the home in 2003, a decade and a half earlier. And, of course, she knew that she’d have to coordinate all of this while maintaining her commute to Charlotte.
“I was looking at how much money I would need to take out of savings in order to make the necessary repairs,” said Roberts. Then she received a piece of mail that would change her calculations. The mailing was sent from Opendoor, a real estate startup that offers sellers an alternative to the traditional listing process.
“At first, I thought it was a scam,” said Roberts. “As I work in fraud review, I went to investigate.” Her research piqued her interest—the company offered to guarantee a set price for her home and give her the flexibility of scheduling the inspection and the closing dates.
Roberts submitted an inquiry, and the company responded with an offer within a day. Roberts would become Opendoor’s first customer in the Triangle.
Local presence, local market
Opendoor officially launched in the Triangle earlier this week, though their team has been working to establish a presence for about 90 days. Operating out of the Nest Raleigh coworking space, general manager Jon Enberg and his five-person team have plans to expand operations dramatically in 2018, expecting to hire an additional 10–15 people on staff.
Enberg, a Duke University alum, grew up in Durham but left the Triangle after graduating to join the U.S. Navy, serving as a Combat Information Center officer and Task Unit Commander in an eight-year career. After completing business school at Harvard University, he joined an energy and utility startup based in San Francisco. After years away from the Triangle, Enberg was itching to return with his family, so he broached the idea of working remotely. After receiving approval, Enberg and his family moved to Raleigh and began their own search for a home.
“Everyone has a different reason,” said Enberg, “a different ideal way to navigate selling or buying a home.” Some families, like Enberg’s, move across the country to a brand new community. Some families move across town to be in a different school district. Some homeowners are trading up for more square footage, and some are scaling down for less. Some are first time home buyers. Some are buying one home and selling another. And some sellers, like Roberts, are facing a very emotional home selling or buying process while balancing a career and caring for their famil.
“We’re customer first,” said Enberg. “We provide certainty.” Opendoor has already worked with dozens of sellers and buyers across the Triangle, said Enberg. “We’re looking at quality homes regardless of location.”
The All-Day Open House
“I looked at the offer and was extremely pleased,” said Roberts. She purchased the home for $109,000 and her initial offer from Opendoor was $141,000, pending inspection and repairs.
Roberts continued the conversation, working with a member of Enberg’s team. After receiving the guaranteed price, homeowners coordinate an inspection of their property with Opendoor. A team of six people came promptly at their appointment time to inspect Roberts’ townhome, and spent a few hours thoroughly inspecting each aspect of the property. Opendoor commits to a three-day turnaround for all inspection reports and discusses the results of the inspection and any necessary repairs.
The company gives sellers the option to fix up the house and complete the necessary repairs on their own—the seller paying for and coordinating repairs—or they’ll coordinate, handle, and pay for repairs, the cost of which will come out at closing. Roberts elected to let Opendoor coordinate, rather than deplete her savings account to make repairs.
Opendoor makes money by charging a service fee of 6%, similar to the standard real estate commission. Additional fees may be added. After the company makes repairs and closes on the property, it lists the house and tries to sell the homes for a small premium.
Homebuyers are treated to a unique experience—the all-day open house. Because Opendoor’s properties are move-in ready and are vacant, the company provides open access to all of their listings from 6 am–9 pm through their mobile application.
“A lot of buyers are super busy, and agents are busy,” said Enberg. “We’ve figured out how to make it as simple as possible.” Prospective buyers can arrange home visits around their schedules and can view and tour properties as many times as they’d like. When a prospective buyer is interested in a property, they can even submit an offer from the app while they’re in the house. Every home comes with a 30-day satisfaction guarantee.
With the launch of the Raleigh-Durham market, Opendoor now operates in six markets nationwide. The other markets are Phoenix, Dallas-Fort Worth, Las Vegas, Atlanta, and Orlando. The company expects to expand to additional markets in 2018, including launching a Charlotte market in the spring.
Facing another startup challenger
With the launch of the Raleigh-Durham market, Opendoor now operates in six markets nationwide. The other markets are Phoenix, Dallas-Fort Worth, Las Vegas, Atlanta, and Orlando. The company expects to expand to additional markets in 2018, including launching a Charlotte market in the spring. To fuel this expansion, the company has raised nearly $320 million in their Series A, Series B, Series C, and Series D rounds, suggesting a possible valuation of more than $1 billion, making the company a Silicon Valley unicorn. A December 2016 Forbes article postulated that if Opendoor were able to secure just 1% of the more than 5 million real estate transactions that occur each year in the United States, averaging a sale price of $250,000, it would secure annual revenues of more than $1 billion.
In both North Carolina cities, Opendoor will have competition from another real estate startup that recently launched an expansion into the state, Knock.com. Competition in the market can ensure that buyers and sellers have additional options to consider when selecting how to navigate the real estate market.
As a 23-year old, Roberts navigated the purchase of her first home. “My dad taught me the value of investing your money early,” said Roberts, “all of that paid off.”
She made the move to Charlotte, even before the closing. “Everything went smoothly,” said Roberts. “I didn’t even have to return to Raleigh.”
Roberts made a trip back to the Triangle a few weeks ago and went to check on her old house out of a sense of nostalgia and a desire to close that chapter of her life. Repairs had been made, including new carpeting on the main level and new appliances. “The house was move-in ready,” said Roberts. The home was listed on Opendoor’s mobile app and on the multiple listing service, MLS, which real estate brokers use to help find homes for their clients, on January 22. It lasted for eight days before going under contract, with multiple offers.
As for Tremaine Roberts? She’s renting an apartment in Charlotte as she searches for the right property to buy. And when she’s ready, she knows how she’ll navigate her search.
“I absolutely will consider buying a home from Opendoor,” said Roberts. “They’re a great company.”