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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?

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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

Do you give out your phone number? You may want to rethink…

(TECHNOLOGY) As a real estate agent, its tempting to give out your number to whoever asks for it. But be cautious of what exactly you’re giving out.

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Man giving out phone number using his phone representing addiction.

Friendly reminder: You do not need to share your cell phone number with everyone.

This sounds like a simple statement, but with the abundance of accounts and reliance on technology for pure convenience, most people freely give away their personal numbers without considering the consequences.

An extension of yourself

As the dependency on smartphones has increased, privacy standards have decreased.

Using a phone number to unlock an account or shop online is so common that many people don’t think twice before typing it in.

Even if this nonchalant attitude has never led to anything detrimental, there is always the possibility of your account being hacked. Having your phone number attached to this account will only make everything worse. For example, if a hacker finds their way into a Macy’s database, they can use the phone numbers tied to member accounts to access other information.

By simply knowing your cell phone number, all the accounts associated with it are jeopardized.

Think of how many times you have been asked for your cell phone number. Of course, disregard the interested strangers, family and friends and you’ll find that this sharing still occurs multiple times throughout the week. Email and social media pages may ask for it to verify your account. Retailers may ask for it for marketing purposes.

Bank accounts, rewards programs, and even ordering a pizza requires you to share your number.

Keep it secret, keep it safe

Luckily, there are a few things you can do to prevent hackers from stealing your information.

The first thing is simple, don’t share your phone number with everyone. Just because a customer service representative or online form asks for your number does not mean that it is required. You can deny their request if it is not mandatory. Second, don’t open links sent via text from numbers you do not recognize. Sending these links is a common way hackers use phone numbers to access other information.

You can also have a separate phone number for personal use to limit contact from spammers and unknown callers.

Never be afraid to ask questions when it comes to your privacy. Though freely sharing personal information is the norm these days, it does not mean that you have to participate.

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Real Estate Technology

Rating the quality of your meetings could create more efficient work teams

(TECHNOLOGY) SurveySparrow has a plugin that allows you to rate meetings. It could help you and your team evaluate and improve future meetings.

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We love data. We are in a data-driven world. We like giving our feedback via customer reviews, social media comments, surveys, and Twitter (yes, Bob, everyone knows your flight was delayed). Tell us what the data says. Well, it might be a great time to finally get some data on all those meetings you’ve been having.

Many people are sick of meetings; we sit in a lot of them that then need follow-ups because either we didn’t have an agenda, or we didn’t get through the agenda. There also may be additional meetings because no one really knows what is going on, or people are unable to have a solid plan in place (thanks to the global pandemic) and require more frequent check-ins/status updates.

Perhaps we’d all dread meetings less if they could be improved and justified as a much better use of time. G suite just made available a free plugin, by SurveySparrow, that could possibly help your company improve your meetings:

RateTheMeeting helps you improve meetings by collecting feedback to understand what works and what doesn’t for your teams, divisions, or company. With this data (feedback), it might be possible to stick to agendas and the purpose of the meeting, prevent topics that require a separate discussion and make sure that everyone’s time is well spent. It syncs to your calendar and automatically follows up with attendees to collect feedback after each meeting. You can see how it works on YouTube here.

While this seems like a helpful tool, the biggest hurdle may come from management first. They may not want feedback on meetings if they feel that meetings are necessary and the most valuable way to communicate for their teams. It also might be one more data set that they have to sort and mine.

Next, employees may not want to rate each meeting on top of their already busy schedules. They likely would only want to do this if it would make real change within the meeting culture of the organization. Either way, it might be nice to just offer a thumbs up or thumbs down for each meeting (for funsies?).

It’s always hard to please everyone, so you’ll just have to decide if adding this function is more trouble than it’s worth.

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Real Estate Technology

20 free professional marketing tools to kickstart growth for your business

(TECHNOLOGY) Running a small business is a ton of work and you need all the help you can get. Here are 20 free tools that help make it a little easier.

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When running your business, big or small, you’re only as good as what’s in your arsenal. This applies to your ability to be creative and think on your feet, as well as to have tangible tools at your disposal.

Below, we’ve outlined 20 of the top free tools that are designed to help grow your business – let us know in the comments what you love or what you’d add!

  1. Google Analytics – this is a definite need. With the world continuing to grow more and more digital, it’s necessary to know how your business is operating in the online realm. Google Analytics provides data about your small business, including traffic to your site and clicks on links. It gives you an idea of who is visiting and when, allows you to track your goals, and generate audience reports. Google also offers virtual classes that teach you how to master the platform.
  2. Hotjar – want to understand exactly how visitors are using your site without getting lost in the shuffle of numbers and data? Hotjar is where it’s at. You can see a user’s behavior and their exact process of perusing the site. There are also tools like feedback polls that allow your audience to interact with you when using your site.
  3. Canva – this is one of the best visual tools to create graphics for your company, both to print for physical display and to use on social media. The platform is easy-to-use and allows for a myriad of sizing options, backgrounds, and stock images.
  4. ProProfs Help Desk – this is a ticketing system that allows your visitors to contact customer service and start a thread of communication; all while keeping everything ticketed and organized. This also allows for shared inboxes, ticket resolution via chat, and ticket reduction up to 80% with knowledge base.
  5. JungleScout – this is your best friend when it comes to learning to sell on Amazon. Regardless of where you are in your seller journey, this tool will help you maximize your skillset.
  6. Kickstarter – crowdsourcing for your business without giving away the equity. This lets you recruit micro-investors and donors for your new business venture.
  7. MailChimp – This is an all-in-one tool that is necessary for all small business users. According to their website, “Bring your audience data, marketing channels, and insights together so you can reach your goals faster. With Mailchimp, you can promote your business across email, social, landing pages, shoppable landing pages, postcards, and more — all from a single platform.”
  8. Shopify – this platform has helped over one million businesses around the world and is continuing to help small businesses thrive. Shopify allows users to create and design an eCommerce website that is backed by helpful tools that help discover new customers, drive sales, and manage your business’s day-to-day operations.
  9. Buffer – provides simple social media tools that receive authentic engagement. Tell the story of your brand while growing your audience. The platform includes publishing, analytics, and engagement.
  10. Qualaroo – this is a customer and user feedback software that states its value as ten times higher than email surveys. It comes with what you need for useful feedback, including AI-powered analytics and reports.
  11. Zapier – a platform to connect your apps and automate workflow. Zapier moves information automatically between your web applications, allowing for more focus on the most important work.
  12. Doodle – a scheduling platform that allows meetings to be booked faster and smarter. No more need for an hour of back-and-forth emailing in order to nail down a meeting time.
  13. Docracy – a home for contracts and other legal documents, created by the community that uses them. The idea is to make these common documents easily available for everyone.
  14. Slack – the ideal way to communicate with your team and keep everyone on the same page at all times. This is a central communication hub where you and your team will stay in the loop, ask questions, and share updates.
  15. GoDaddy Website Builder – this is an extremely user-friendly tool that allows you to build websites that looks as though you paid someone hundreds to build it for you. There are many options for customization, and they have the tools that help your site look great on both desktop and mobile.
  16. ToDoIst – For many, it’s impossible to stay organized without the use of a to-do list. With this tool, you (and your team!) can stay organized with the most important tasks and priorities.
  17. Grammarly – When writing copy for your business’s brand, it is important to have as many eyes read through it as possible for any errors. Grammarly is a tool where you can plug your copy in and it will automatically find and highlight any grammar errors or typos. You can never be too careful!
  18. AdobeSign – Formerly known as EchoSign, this tool allows for paperless signatures that help make signing contracts and agreements as easy as the swipe of a finger.
  19. Sumo – a platform filled with tools to help you grow your website. It’s a free email capturing tool that takes only seconds to sign up.
  20. Pixabay – We don’t always have the time or the money to take photos to go along with our website copy and social media posts. Pixabay helps alleviate that need with free stock images that will help your message pop.

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