Opendoor will temporarily suspend the homebuying aspect of its business, the iBuyer confirmed to Inman Wednesday.
The well-funded, direct-to-consumer homebuying and selling platform cited the public safety concerns associated with multiple aspects of the real estate transaction at a time when many in the country are staying inside and self-isolating due to the rise of COVID-19 (coronavirus).
“Following the latest guidance from federal, state and local governments and out of an abundance of caution for the safety of our employees, partners and customers, we are temporarily pausing new instant home offers,” a spokesperson for Opendoor said in a statement. “While much of our customer experience is virtual and self-service, there are still some elements that require real-world interaction, including home assessments and repairs.”
The spokesperson said the company has been closely monitoring the escalation of COVID-19 over the last few weeks and is mindful of the impact the crisis has had on the communities in which the company operates. Ultimately, the spokesperson said, the priority for Opendoor is the safety and well-being of its customers, employees and the general public.
“We are also highly aware of the impact COVID-19 is having on local communities,” the spokesperson added. “With closures and staffing issues facing government offices, home transactions are already being delayed in some regions.”
“We understand the strain that puts on customers. By pausing offers temporarily, we can proactively address the situation.”
The spokesperson didn’t put a specific time frame on the halting of instant offers, and instead said the company is taking the precautionary measure until there’s greater visibility into the containment of COVID-19.
“We will continue to navigate these new realities to help people move on their terms with ease and convenience,” the spokesperson said. “We’ll be following up with any additional updates.”
Opendoor is one of the most well-funded iBuyer real estate startups, raising more than $1 billion in equity, including a significant stake from the embattled SoftBank Vision Fund.
The change was initially discovered Wednesday, the same day Redfin confirmed to Inman it was temporality halting the purchase of homes. Inman attempted to get offers for homes in all 21 markets that Opendoor’s website currently operates and the same message appeared — “Your house is not in a neighborhood we support right now, but sit tight! We’re expanding quickly.”
Redfin’s revenue isn’t solely derived from its iBuyer business. In fact, less than half of Redfin’s revenue comes from that segment of its business and the Seattle-based brokerage still plans on selling the homes in its inventory. Redfin CEO Glenn Kelman partially attributed the temporary halt in homebuying to the difficulty of pricing real estate in a rapidly changing market.
Opendoor is a much higher volume purchaser of homes than Redfin. In markets like Atlanta and Phoenix, Opendoor owns hundreds of homes and, as of Wednesday, had multiple new listings in those markets. The two also operate a partnership in multiple markets, where Redfin customers can receive instant cash offers from Opendoor.
Opendoor’s top competition, Zillow and Offerpad, were still buying homes as of Wednesday.
In a statement, a spokesperson for Zillow confirmed it was still operating its homebuying and selling business.
“We continue to operate Zillow Offers, accommodating for what is a rapidly changing environment,” the spokesperson said. “We control the pace of purchases and other levers, and part of our value proposition is that we are going to be there for people who need to buy or sell a home.”
“These are unprecedented times and we are actively monitoring our communities, public health authority recommendations and local housing markets to adapt to conditions as needed. Our first priority is the health and safety of our employees, customers and partners.”
A spokesperson for Offerpad was not immediately able to provide a statement on a short deadline Wednesday night, but confirmed the company is still buying homes at this time.
