iBuying companies have started to reclaim their ground in the last few months, and now, one of the biggest of them all is bringing in the big guns -- on-the-ground real estate agents.
It's true: Opendoor just announced a new program designed to incentivize agents to send sales the company's way. The move could mean an even bigger market share for the megalith iBuyer as the company -- and others like it -- recover from the pandemic.
Should you be worried about the impact on your area's housing market? And how does the program actually work? Let's take a look.
Opendoor to start paying agents
To be clear, Opendoor has worked with agents for years. Two years ago, the company launched the "Agent Partner Program," which referred business to agents when a property either 1) failed to meet the iBuyer's standards or 2) was in a market where Opendoor was unavailable. This new program, though, works the other way around, paying agents directly to funnel homeowners Opendoor's way.
Dubbed Opendoor Agent Access, the program offers four levels of incentives: Member, Silver, Gold, and Platinum, each with at least a 1% commission fee and a variety of bonuses available. On the 20th transaction an agent refers to Opendoor, they get a whopping $10,000 bonus and hit Platinum level.
The Agent Access program will also offer training and content for agents to "invest in their professional development," though exact details on this facet haven't been divulged.
According to the company, the program will allow agents to offer their listing clients more options -- particularly those who don't want a sale contingency hurting their chances at buying a new home.
"Contingent deals can be a headache for everyone involved," Opendoor's Will Holmes wrote. "They add time and costs that both sides of a transaction may not be able to afford. That's why many agents turn to Opendoor. Our cash offer helps agents remove contingencies and provide certainty to sellers, who can then shop for their next home with confidence."
Ultimately, the move is likely to help the iBuyer snap up more market share, at least as long as the market remains hot. Keep in mind, though, Opendoor -- and other iBuyers out there -- only operate in certain markets. Opendoor, for example, is only in 41 U.S. cities (though it's aggressively expanding).
iBuyers also gravitate toward homes on the more affordable end of the price spectrum and properties that are in decent condition (i.e., easy to flip and resell quickly). So, even in the cities they operate in, the move shouldn't cause too much of a shakeup.
The bottom line
Opendoor is clearly gunning for market share, and incentivizing agents in today's challenging market is a smart way to do it. Will agents bite, though? That remains to be seen. If they do, we'll update you on the impact.