Connect with us

Real Estate Technology

How OpenDoor became a unicorn (a company valued at over $1B)

(BUSINESS NEWS) Good news for direct home sales and fans of adorable mythical quadrupeds – OpenDoor is a unicorn. What does its billion dollar valuation mean for the modern real estate market?

Published

on

opendoor

Online direct home sales is officially a thing. That was probably inevitable, given increasing automation of sales (robots are coming for your jobs – not that they can do them yet!), an ongoing Disrupt All The Things mentality amongst entrepreneurs, and sellers’ frankly understandable desire for a smoother, easier way to get rid of their people boxes.

Seriously, the Holmes-Rahe Life Stress Index puts selling a home above quitting freaking smoking in terms of medically significant stress. People are understandably interested in making that suck less.

Enter OpenDoor.

The OpenDoor offer is direct online sales. TL;DR – OpenDoor gets information from the customer, then sets a price for the property being sold, sight unseen. On top of that price, OpenDoor charges a risk fee, a flat 6.7 percent on top of the stated value, to guard against depreciation. In exchange, OpenDoor takes over the selling process, spiffs up the house and sells at a profit. As CB Insights says in its excellent analysis of OpenDoor, it’s basically high tech house flipping.

The OpenDoor pitch is that their system benefits both seller and buyer. They’re impressively honest about the math: They say their flat 6.7 percent is pretty much comparable with the costs and fees associated with traditional real estate sales, which is true. The advantage comes in, says OpenDoor, because the property is then out of the seller’s hands, no muss, no fuss.

That spares them from the hassle of home sales, but it’s also easier on the prospective buyer than the usual peer-to-peer approach. No need to balance two mortgages, no deals contingent on the house selling at a certain price. The house has already been sold at a certain price. Pony up and it’s yours.

We could argue pros and cons all day, but that’s not the point. The point is that, on a small but growing scale, the OpenDoor offer is working. OpenDoor currently operates in and around Atlanta, Las Vegas, Orlando, Phoenix, Raleigh-Durham, and my own fair hometown of DFW. OpenDoor focuses on second-tier real estate markets, avoiding the fluctuations and complex variables of Realty Madness as it is to be found in NYC, the Bay Area and so on.

In those cities, since its start as a spindly little startup in 2014, OpenDoor has served better than 10,757 total customers.

Per the CEO, it currently accounts for 3 percent of home sales in Phoenix and Dallas. Chump change that ain’t.

They’re already thinking expansion. San Antonio and Charlotte are the next towns slated for Missy Elliot treatment. For those of you who missed the 90s, Missy Elliot treatment is of course “put the thing down, flip it, and reverse it.” Surprisingly apt! Seriously, OpenDoor’s missing a trick if they don’t license that one.

Catchy but unpronounceable hooks aside, OpenDoor is taking a fair amount of risk along with their more than fair amount of money. In particular, focused as they are on moving up in the world, OpenDoor is carrying a lot of debt. As of fall 2017 they had borrowed on the order of $600 million to fund home purchases.

At their current 7.4 percent average gross margin on home sales, that’s sustainable, but it’s a whole lot of money to gamble on a new thing continuing to work. A housing downturn or even a comparatively minor shift in value could easily throw that balance out of whack, and while OpenDoor executives state that the debt would still be supportable in a downturn with an increase in risk fee, there’s always the possibility of chilling an already shaky market with too big a jump.

To state the obvious, avoiding that kind of risk is literally why there are Realtors, and why the real estate market in general works the way it does.

Distributing the risk between bank and homeowners, rather than having one organization take it all, minimizes the possibility of failure. OpenDoor has decided to take that risk, and is confident its model will be enough to ameliorate it. Whether that’s the case or not is an open question.

Most unicorns are just shiny horses standing under the right branch. But if OpenDoor can sustainably deliver on its core offer, then score one for the mythical horsebeast.

This editorial was originally published January 9, 2018.

Matt Salter is a writer and former fundraising and communications officer for nonprofit organizations, including Volunteers of America and PICO National Network. He’s excited to put his knowledge of fundraising, marketing, and all things digital to work for your reading enjoyment. When not writing about himself in the third person, Matt enjoys horror movies and tabletop gaming, and can usually be found somewhere in the DFW Metroplex with WiFi and a good all-day breakfast.

Real Estate Technology

Should HUD allow facial recognition use in public housing?

(TECH) The Department of Housing and Development allows public housing authorities to use facial recognition technology on tenants totally unchecked.

Published

on

facial recognition

Would you feel comfortable if someone was monitoring you, your family, and your neighbors in your neighborhood through facial recognition? What if there was no way to know what information they were collecting, or how it would be used?

If your answers to those questions were “no” and “hell no” respectively, then listen to this:

The Department of Housing and Urban Development does not keep track of how facial recognition tech is used in public housing. Like, at all. Nor have they researched how facial recognition is used, or instituted policies to control its usage.

HUD leaves that responsibility to the individual authorities that oversee housing programs.

Complexes that put up facial recognition cameras have been met with protests, but tenants don’t have widespread federal protections to back them up – yet.

Facial recognition is an exploding and lucrative industry that is completely fraught with controversies and concerns. Here’s the biggest ethical elephant in the room – the current industry offerings still consistently struggle to correctly identify the faces of folks who are not white men. Black women are often the hardest for facial recognition software to identify, and while accuracy among transgender individuals has not been widely studied, one can speculate that it would be pretty poor too.

This bears a philosophical resemblance to putting police and metal detectors in underfunded public schools, a practice that a growing number of experts say is actively destructive to students. It invites problems with the law where there would otherwise be none, leaving permanent barriers in the lives of ordinary people.

Criminal allegations, even false or trivial ones, can carry dire consequences for individuals and families in public housing. One could face civil asset forfeiture or eviction, or be cut off from other government benefits and relief programs in the future, to list a few. These are already statistically bigger problems in the lives of non-white non-men, so facial recognition is well-positioned to exacerbate existing inequality.

This story is just one of the latest examples of the recklessness that follows facial recognition, as well as those who supposedly regulate it, at every turn. For instance, Clearview AI is a new facial search engine that scrapes all publicly available image data for faces, including photos others may have taken and posted without your knowledge. One by one, Clearview builds up vast image repositories that can go back for years, and then makes those repositories available to be searched by law enforcement. The company has been accused of ending “privacy as we know it.”

These products, while undoubtedly impressive, have a high potential for misuse. Living in public housing is not a crime, and performing intimate surveillance on innocent people against their will is highly unethical. Everyone deserves a say in what goes on where we live, regardless of what we’ve got in the bank.

HUD has no excuse, and they should have taken decisive action long ago. But hey, late would be better than never.

This story was first published here in July 2020.

Continue Reading

Real Estate Technology

Seeking accessibility options? Google Maps can help you find them

(REAL ESTATE TECHNOLOGY) Google Maps makes it easier to see which locations are wheelchair-accessible. Accessibility Is now marked easily as an icon next to the name of locations.

Published

on

If you are one of the 13.7% of adults in the US who have a disability which makes it difficult to walk or climb stairs, it is now easier to find out accessibility details of businesses or other destinations using the Google Maps app.

Though the feature was previously available, it required users to seek it out separately for each destination in the “About” section of the app. The new “Accessible Places” feature rolled out on Global Accessibility Awareness Day marks destinations that have wheelchair-accessible entrances with a prominently displayed icon, and information about the availability of accessible seating, parking, and restrooms.

Though accessibility features are often initiated through work and advocacy to help people with disabilities, it is something that even those without mobility challenges often seek out, and from which they can benefit. For example, if a person is pushing around a stroller with a 30-pound toddler inside; they might want to know the accessibility details when planning their outings to know where they will or will not encounter an accessible entrance. This is also a helpful tool for those planning for groups with varying levels of mobility.

Right now the Google Maps app has wheelchair accessibility information for more than 15 million places around the world, according to the Google produced blog The Keyword. This number is continuously increasing as volunteers and business owners add updates.

If you run a business with accessible entrances, seating, parking, or restrooms, you might want to give the feature a try, and make sure that all of the efforts you have put into making your location accessible are noted accurately. If you have updates to add, you can do so here. Google reports that 120 million Local Guides have already shared accessibility information from around the world for this feature.

To enable this update on the Google Maps iOS or Android app, go to “Settings”, select “Accessibility,” and turn on “Accessible Places.”

google maps settings

The rollout of this feature started with the United States, Australia, Japan, and the United Kingdom; with Google claiming support for more countries is on the way. According to The Wheelchair Foundation there is a global population of over 130 million people who use wheelchairs. This user-friendly feature has a large potential audience to benefit from having accessibility information at their fingertips.

Continue Reading

Real Estate Technology

Boost your web productivity with Motion, now available on Firefox

(REAL ESTATE TECH NEWS) Motion, the acclaimed time-saving browser app, is now available on Firefox. Keep yourself organized and accountable, right in your browser.

Published

on

Motion the browser app open on a neatly organized white desk.

If your attention span is anything like mine, all of this screen time over the last year has been brutally difficult, especially when it comes to simple things like staying on task and not checking Twitter 100 times in one hour. Luckily, a productivity app called Motion might help you get that time back.

Motion is an in-browser app originally designed for Google Chrome. The team behind it recently launched a Firefox version as well, effectively doubling your browser choices. While it isn’t free for long-term use, you can give the app a try for five days without paying a cent.

The call to action on Motion’s landing page is bold, yet oddly corroborated by those who use it: With the right settings, you can reclaim up to 2 hours of lost time per day. This includes, but is not limited to, time spent browsing social media, looking through complex file management systems (we’re not naming names, but Motion happily will), and negotiating with your planning app of choice.

In fact, given permission, Motion throws away most of your daily annoyances and replaces them with its own reimagined versions thereof. For example, Motion can replace your Google Drive and Gmail interfaces with a lightweight, easy-to-navigate version that—in theory—cuts down on navigation time. Motion also gives you a smart scheduler to automate at least some of your calendar tasks, and it won’t fail to hold you accountable for clicking onto a social media tab.

Actually, the social media behavior exhibited by Motion might be the most endearing (or most frustrating, depending on your level of addiction) aspect it offers. The app has settings that can hide newsfeeds, remind you (politely) to hurry up when you absolutely must check Facebook, and display an announcement that tells you how much time you have spent checking your socials for the day.

There are a ton of nuanced and personalizable features that Motion includes that aren’t covered here, but the end takeaway is this: Motion can save you a ton of time if you’re willing to let it do so. Whether you use Chrome or Firefox for your various nefarious deeds, this app is a must-try if you’ve been struggling to stay on-task.

Continue Reading
Advertisement

Our Partners

Get The Daily Intel
in your inbox

Subscribe and get news and EXCLUSIVE content to your email inbox!

Still Trending

Get The American Genius
in your inbox

subscribe and get news and exclusive content to your email inbox