Opendoor Technologies (NASDAQ:OPEN) is a platform that allows the purchase and sale of properties. It also offers financing services to the buyer. The company has become a leader in the “iBuying” market, a fairly new industry that allows homeowners to sell their houses to the company, which will list them on its platform. Year-to-date, Opendoor stock is up 11.2%.
The lighting-fast approach to real estate is a perfect alternative to the tedious process of listing a home, working with an agent, showing the home to buyers, and waiting for the buyers to get financing to finally close the deal. The company is garnering attention and investors’ interest.
Opendoor stock stood at $10.80 in June 2020 and soared to $31 in December 2020. They have a unique approach to real estate which is why I am bullish on the stock.
The iBuying Business Model
Opendoor has a business model that works in its favor by changing the way properties exchange hands, making the process of selling a home more convenient for its customers.
The company will pay a price for a home that is higher than its original purchase price. It uses 145 features per inspection to estimates the price, setting it apart from other players in the industry. Opendoor is present in 21 markets across the U.S. and aims for a 4% market share with a revenue of $50 billion.
In a generation that prefers doing everything online, selling a house is only a few clicks away. Easy digital access fort his kind of process is what will work for Opendoor stock. Those who want instant money will prefer working with a company like this instead of looking for an agent.
Besides offering the right price to the seller, they also provide a lot of convenient services like quick closing on the sale, no risks of the buyer backing out, and the opportunity to schedule the move out date. This allows the seller to avoid the double mortgage when moving to a different house.
Opendoor has a service charge which is around 5% of the cost of purchase. When this is compared with the real estate agent’s commission, it is in line.
The pandemic also works in the company’s favor as sellers increasingly look to make contactless transactions. I believe this method will continue to succeed even post-pandemic.
Bottom Line on Opendoor Stock
According to U.S. News, 2021 will see a rise in average home prices and the demand for properties in the suburbs will continue to dominate.
The pandemic has made it possible for professionals to work from anywhere in the world. There are several organizations that may continue remote work in the future and this has had a direct impact on the real estate industry across the globe.
With professionals relocating, they do not have to worry about selling their home or waiting for months to find the right buyer. Neither do they need to worry about paying for two mortgages.
Telecommuting has opened new doors for Opendoor and those who have the money are already diving into real estate. The company website reads, “sell the home the minute you are ready.” When you can do it in a few days, why waste your time with an agent?
OPEN stock has the possibility to soar in the future as iBuying transform the real estate industry. It is definitely a stock to watch.
On the date of publication, Vandita Jadeja did not have (either directly or indirectly) any positions in the securities mentioned in this article.