- [Narrator] I'm Lea Woodford,
founder and CEO of SmartFem Magazine.
I'm on a quest to meet some
of the most influential people in today's world.
I'll be talking to women and companies
that understand the fierce brand loyalty
of the female consumer.
We'll get a behind the scenes look
at some of the risks, challenges, and successes
of today's most influential people.
(upbeat techno music)
Technology is revolutionizing the way we do business.
Old problems are being solved
and are becoming more efficient and cost effective.
Uber has forever changed the taxi industry
and changed the way we look at personal transportation.
Airbnb has disrupted the hotel industry
giving more cost effective options for consumers
as well as for people looking to rent their extra space.
Now, Opendoor is changing the real estate industry
and has leveraged technology to create a solution
to the daunting process of buying and selling your home.
Buying a new home should be
an exciting new chapter in your life.
It usually, however, is an emotional roller coaster.
Can you imagine being able to sell your home
without having to list it, stage it, or wait for a buyer?
The old process can take months with no clear time frames.
Contingency offers can ruin a great deal
and force you to start the process all over.
What if you could sell your home
and have the cash in your hand in as little as three days?
Sound too good to be true?
Hi, I'm Lea Woodford of SmartFemTV,
and today I'm with JD Ross of Opendoor.
Opendoor is a new consumer tech firm
that is revolutionizing the real estate industry.
Hi, JD, welcome to the show.
- Hi, Lea. Thanks for having me, it's a huge honor.
- Oh, it's really my honor.
(JD laughs)
So, JD, can you tell me about Opendoor
and what was your inspiration?
- Yeah, so we started the business almost three years ago.
But the story starts years before that.
So my co-founder Keith has been thinking
about this for ten years, and my other co-founder, Eric,
had been in real estate in Arizona in his own startups.
Most recently sold Trulia decades before that.
So, really, they'd been thinking about ways to change
the real estate industry for 10, 20 years now.
When Keith first looked at the real estate space
he came up with this idea
that you just have two boxes on the website,
your home address, the amount you wanna sell for,
and then hit go, it was just a yes or no.
And 10 years ago, the technology wasn't really there,
the data wasn't there to fairly assess a home's worth
and make that fair offer, and so we had to shelf it.
Three years ago, Eric, Keith and I came together
along with Ian to say what can we do
to make real estate 10 times better?
How can we get rid of all of the headache,
all of the hassle, what are the things that make people
stop and pause before they want to sell a home?
Or get at each other's throats when they're trying to find
that dream home to buy. - It makes you crazy.
- It goes crazy, right?
And so we thought, okay, the simplest version
of selling a home would be go to the website,
enter your address, hit sell, you get a fair offer,
you choose the day you close, and that's it.
Everything's done.
And so, walking backwards from that
was how close can we get that experience?
So we built that website.
And today the way it works is you go to Opendoor,
you enter your home address, and within one business day
we'll make you an offer for your home,
in cash, for the full value.
And we let you move out on your timeline.
When you think about moving, people buying a home today
generally need to sell their home first.
They either can't afford
or don't want to have two mortgages.
It's just too expensive, right?
- Right. - And so, what we
allow you to do is find your dream home,
pick the date you're ready to close, and then know
that you have an offer in your back pocket,
ready to close on that day.
So you can trade in your house
like you might trade in a car.
- So can you walk us through the process of Opendoor,
the app and everything?
- Yeah, so Opendoor is for both buying and selling a home.
We try to make the process much easier on both sides.
If you're buying a home, if you download
the Opendoor app on your iPhone or Android device,
you'll see hundreds of homes,
hopefully in your neighborhood.
Right now we're in Arizona and Texas.
And you can go up to any of those homes,
any time of day, and it will just say "unlock this house".
There's no scheduling, there's no need to plan ahead.
You can go with your wife or husband and say,
"You know what, let's go tour houses,
it's our New Year's resolution,
let's go out and buy a home".
And there are hundreds of them for you to visit.
And when you find that home that you say, "this is it",
you can hit the button and make an offer, all online.
And then if you need to sell your home,
we'll also make you an offer on that home.
So we take that entire 90 day, 120 day process
with all these different parties and compress it down
make it as easy as calling an Uber.
- You've really streamlined the process.
- That's what technology is for, right?
It's taking all of these incredibly complex industries
and saying, "what is the core
of what someone's trying to accomplish"?
So for us, that's always been about moving.
It's not about selling, it's not about buying,
it's about moving forward,
what's that next chapter of your life about?
And everyone finds this dream home,
they get really excited about it.
And what we let you do is say,
we bring that dream to you faster.
One button and you can move into that new home,
sell your home, everything's handled.
- Talk about instant gratification, that never happens
in real estate, instant gratification.
So how long is the closing process then?
- If you're selling a home through Opendoor,
you can choose your closing date.
We put the flexibility in your hands,
so you can choose a date from three to sixty days out.
And we'll make sure that we get that closed.
Obviously sometimes an HOA says, "you can't wait until
it takes seven days".
Fine, but basically, we put that flexibility in your hands.
- Now, how's the real estate community
responded to Opendoor?
- Our job is to build the best brokerage in the world.
We partner with more agents than any brokerage,
we wanna make you look like a rock star.
If you're an agent showing an Opendoor home,
what matters to you is that your buyer is blown away.
Because then they're gonna refer new clients to you,
and obviously then you get paid.
But we work to make sure that our response times
are the lowest in the industry, we work really hard
to make sure that everything in the home is ready to go,
so that you look amazing, and that's what we do.
That's our brokerage.
- So it's a positive experience
for the real estate industry, then,
cause you work with real estate agents.
- Yeah, absolutely.
- But for those who don't want to work
with a real estate agent, it's okay too.
- Absolutely, we don't think in terms of the industry,
how it is today versus how it should be.
We think in terms what the experience
should be for customers,
what is the best possible experience
for someone who is trying to move?
And we enable that.
For many people that's working with an agent,
for some people that's self service.
We work with both, and we have great partnerships
with many of the top agents in every market we're in.
We've given out tens of millions of dollars
in commissions in the past two years.
- I know you guys are in Texas and, of course, in Arizona,
where else will you be launching?
- Our goal is to be in eight markets by the end of 2017.
- Can you tell me where those are?
(Lea giggles)
- So, Las Vegas is the only one we've announced.
But we will be, yeah.
- What were some of the challenges,
initially, you had launching Opendoor?
- This business is really hard.
I wish it wasn't so hard.
We're not working in a space of only bits, right?
If you're building an app like Instagram
you have to worry about, well, do our servers crash?
And do our users retain, coming back and taking more photos?
For us, we have all those problems, and then on top of that,
we have to actually buy the home,
we have to get it ready to sell, we have to paint,
we have to replace carpeting, we have to make sure
everything is in tip top shape for these buyers.
We make sure they're secure, we have to make sure
we price accurately, so the business is just very complex.
And I think getting started, understanding that complexity,
and doing it at scale, there's a big difference
between buying one home and selling one home,
and buying 15 homes a day, and selling 15 homes a day.
Right now we have over a thousand homes in inventory.
- Wow. - So being able
to do this with hundreds of vendors,
and making sure the process works perfectly
for every single customer has been really hard.
- [Lea] JD, this house was staged beautifully,
do you do that for all of the homes?
- [JD] Yes, I personally go out to every single home
and I built the furniture as well.
No, we are always running tests, and one of the tests
that we're running right now is whether staging
improves the value of a home or it doesn't.
So, about 20% of our homes right now
have staging, and 80% don't.
One of the benefits of Opendoor is that you don't have to
own the home while it's being sold.
You sell the home to Opendoor
and then we do all the annoying parts of listing,
and having people come in and visit,
but that means the homes are usually vacant.
It's hard, we think, for some people to imagine
what a home could look like lived in, so we stage them.
- [Lea] What other percentages, have you been doing it
long enough where you can see the difference between a home
that isn't staged versus one that's staged?
- We did a small test a long time ago
that said that staging didn't help,
but it was too small to know for sure.
So right now, we started over, and we do know
that on average homes that are vacant
sell for slightly less than homes that are not vacant.
But it's not clear if that's because the homes
are usually tenant-occupied when they're sold,
in which case it might be the lower quality,
or if it's because of the vacancy itself.
So what we're trying to do is learn
whether vacancy, is it the homes themselves,
or whether it's the vacant versus staged?
- Well, what other percentages of homes
that usually stay on the market,
I know Opendoor comes in and it can be pretty fast,
but a lot of homes stay on the market
for a number of months.
- [JD] The average home takes over three months to sell.
And average doesn't really capture the pain of that, right?
Cause if it was just three months you could say,
"Well we're going to list it on this day
and sell on this day and that'll be great".
But it's really anywhere from two days
to 240 days to sell, and you really see
the full spectrum of that.
So what Opendoor lets you do is not just speed
but it's really certainty and around that timeline.
- [Lea] Peace of mind. - [JD] And definitely,
peace of mind. - [Lea] Peace of mind.
I mean, I had done, I had bought a house before
on a contingency to sell another,
and it's a nail-biting experience.
It's excruciating, especially if,
after going into that second month,
if it hasn't sold it's really scary.
- It gets even worse.
20% of homes that are in contract fall through.
- Oh my goodness.
- Yeah, so even after you've had 10 visitors
come through your home and you've had to keep it
beautiful and staged for months, one in five
of those offers is going to fall through.
- One in five? - One in five.
And that creates a huge pain
for anyone who's ready to move on.
You're ready for that next chapter,
you have something in mind, no one is just selling
they have something else they're going to.
And so what Opendoor allows you to do
is to have that peace of mind, and to have that certainty
that when you know you're going to sell,
you're going to sell.
- Now you guys also offer a warranty program,
can you explain that, your program?
- Yeah, I think one of the fears people have
when they're buying a home is "What do I not know?
What does the seller know about the home
that they're not telling me"?
So Opendoor gives people a one year warranty
on all the major systems of the home,
including things that aren't normally covered.
And then on top of that, we give you
a 30 day full money back guarantee.
So you can spend 30 days in your home,
in your new home, making sure it's the exact home for you,
and if it's not, no questions asked, we'll take it back.
- Wow. I don't think anybody else does that.
- No, nobody else does that.
And nobody else can, right?
Because a normal homeowner can't just buy back
their old home from you if it doesn't work.
- I love that. - Yeah.
And again it's all about peace of mind.
- Now, JD, you were recently featured
in Forbes as 30 under 30, so tell me about that.
That's pretty exciting.
- Yeah, I think as always, founders get too much credit.
And it's really, the credit belongs, obviously,
to the team who does all the hard work every day.
The people who are going to every house,
the people who are talking to customers,
everyone on our team who's doing all the hard work,
so I can get the free credit.
But, it is a huge honor, and I am really honored
to be a part of that community, and excited
to meet more people on that list.
- So what exciting things are we going to be seeing
from you in the future?
- Everything Opendoor.
I think we're just getting started.
If you look at every pinpoint in real estate,
buying and selling, that closing process
is only a small piece of it, there's all the hidden fees,
there's all the other processes around financing,
around everything. - [Lea] Everything, yes.
It's a major, yes. - [JD] Moving,
the new services getting set up.
Who wants to call Comcast, right?
So what we do is look at this and say "what are the most
painful points at every stage of the process,
and what can we do to make that better"?
And I think, over the next years, you're going to see
Opendoor solving more and more of those problems
for people looking to move.
- That is absolutely phenomenal.
JD, thanks for coming and being on the show.
I'm so excited to meet you, and love what you're doing.
- Yeah, it's a pleasure, thank you!
- [Lea] To find out more about Opendoor,
you can go to their website at Opendoor.com,
or simply download their app on your mobile phone.
(upbeat electronic music)