iBuyer Opendoor® posts Q1 Loss of $270 Million
Despite what the old saying suggests, perhaps the grass isn't always greener on the other side. In their most recent earnings call and report, iBuying pioneer Opendoor® announce a $270 million dollar loss for Q1 of this tear, which represents an eye-popping 421% increase over the loss recorded in Q1 of 2020. Even after expanding their market share into 27 states and now venturing into the title and mortgage industries, their core revenue stream remains buying homes directly and then re-selling them.
In the first quarter of this year, they purchased 3,594 homes but sold only 2,462. At least they're doing their part toward helping the historically low inventory! Interestingly, another good bit of revenue is the 5% "service charge" they collect when they buy a home (otherwise known as a commission). Because they are re-selling these homes there's a good chance that they will pay less than retail for them, which is still convenient for many as they can do away with making contingent offers, select a closing date, not have to have a parade of Buyers in their house, etc.. At the end of the day at what cost is that worth it considering you're STILL paying a commission. Look, they can call it whatever they like, but if it looks like a duck...you know the rest.
In one of the most historically high demand periods this industry has seen, it still appears that the traditional model of Realtors®, Agents, and Brokers reign supreme when it comes to helping to buy or sell your property. Real Estate is changing every day and iBuyers are not going away, but they'll need to wait their turn before the traditional Brokerage model is no longer the fastest track to success for success in this crazy market. At PropertyGuerilla.com, not only are we NOT trying to compete with this model, we are encouraging the use of Realtors®, Brokers, and Agents by both Consumers and industry professionals alike. The only competition we consider is simply the manner in which property is found on the internet, so don't change the "what" as part of your search, we only suggest you change the "how" in which you search! Give us a try and if you have any questions, you can contact us direct at email@example.com with any questions!
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