Opendoor announced Friday that it has acquired digital mortgage company RedDoor, which the iBuyer plans to use to beef up its consumer financing offerings.
Tom Willerer
Tom Willerer, Opendoor’s chief product officer, announced the acquisition in a blog post Friday, describing RedDoor as a “digital-first mortgage brokerage that will accelerate our roadmap and ability to provide a best-in-class consumer experience.” Willerer also noted that RedDoor has built a unique pre-qualification system for potential homebuyers, and that it can “provide pre-approval to applicants in as little as 60 seconds.”
Over time, Opendoor plans to integrate RedDoor’s offerings into its own system, including with Opendoor Home Loans, the iBuyer’s lending arm that launched in 2019.
In a statement on its website, RedDoor said that “our entire team and our products will continue to innovate the way you can finance home ownership.”
“We’ve had an incredible experience so far executing on our vision to take the pain out of the pre-approval process, and we are excited to expand our impact faster, farther, and for everyone, through joining Opendoor,” the statement added.
Neither company disclosed financial details of the deal.
Heather Harmon
Heather Harmon and Ali Mackani founded RedDoor in 2018. In his blog post, Willerer explained that the company, which is based in the San Francisco area, landed on Opendoor’s radar thanks to “someone at Opendoor who had a fantastic experience working with them.”
“In fact, she called RedDoor ‘magical,'” Willerer added.
Opendoor soon reached out and was “struck by how aligned Opendoor and RedDoor are in the way we operate.”
News of the deal comes at a time when iBuying is under extra scrutiny thanks to Zillow’s announcement earlier this week that it is exiting the sector. The announcement prompted a debate about the viability of using technology to make quick cash offers on homes — though Opendoor co-founder Keith Rabois blamed Zillow’s stumble on the company’s technology, not the iBuying model itself.
Aside from Rabois’ comments, which he made on Twitter, Opendoor has avoided explicitly criticizing Zillow. The company did release a statement earlier this week noting that “we are in the midst of a generational shift towards a fully digital experience, with a large, unmet need for a seamless experience in real estate.”
“Opendoor is open for business,” the statement also noted. “We have demonstrated strong growth and unit economics, and we are energized to help homeowners nationwide move with simplicity, certainty and speed.”
Over the course of the week Opendoor has also revealed several product and staffing moves. News of the RedDoor acquisition is the latest of those announcements.
In his blog post Friday, Willerer ultimately concluded that the RedDoor team has “built an experience that delivers convenience, accuracy and speed by working backwards from the customer’s needs, rather than simply digitizing the paper mortgage application as many others in the space have done.”
Update: This post was updated after publication with a statement from Opendoor.
