Zillow and Opendoor once fought each other to provide sellers with instant cash offers. Now they are partnering to exchange customer leads in Colorado.
“The reality is that once Zillow had left our space, there was a really nice symbiosis between us. We share the vision that consumers deserve to have an e-commerce-like buying and selling experience,” said Brian Tolkin, vice president of product at San Francisco-based Opendoor.
Opendoor is the nation’s largest iBuyer, a model that provides sellers with instant cash offers, handles repairs for them and allows more control over the timing of a sale than waiting around for a buyer to show up. The company has purchased and resold about 4,000 homes locally since its arrival in Denver in October 2018, Tolkin said.
Its chief competitor in Denver and elsewhere had been a Zillow subsidiary called Zillow Offers, which entered the Denver market in 2018 but closed shop in November 2021 after its property valuation models caused it to overpay for homes and take a loss on their resale.
Under an agreement struck last summer and launched in February in Atlanta and Raleigh, N.C., the two firms began to partner together. On Thursday, Opendoor said the cooperative approach would be expanded to include Denver, Colorado Springs and Fort Collins, as well as Charlotte, N.C.; Columbia and Greenville, S.C.; and the Texas cities of San Antonio, Austin and Killeen.
Although its website remains hugely popular with consumers looking to purchase a home, Zillow had a harder time attracting sellers once it shed Zillow Offers, which had about a 10% success rate in converting consumers who requested an offer, according to an analysis last August by Mike DelPrete, a global real estate tech strategist and scholar-in-residence at the University of Colorado Boulder.
Zillow-affiliated agents will present instant offers from Opendoor alongside their estimates of what a home is worth. Although cash offers won’t appeal to everyone, tapping into Zillow’s massive reach should lower customer acquisition costs for Opendoor, which was paying around $5,500 per customer last summer, according to DelPrete.
“It puts Zillow back in the potentially-lucrative seller leads business, and gives Opendoor access to millions of potential customers. Win-win,” DelPrete said in his analysis, which he reaffirmed on news that the partnership would be extended to Colorado.
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