The number of purchases by these two pioneering real estate disrupters has grown exponentially each year, up 112 percent in 2016 and up 133 percent in 2017, and is on pace to nearly triple in 2018, according to the ATTOM analysis. The average purchase price for homes acquired by Opendoor and Offerpad over the past five years was $230,307, a significantly lower price point than the charter Zillow home purchase, and translating into roughly $2.3 billion in transaction volume. It’s important to note that the $2.3 billion represents less than one- half of the transaction dollar volume that the two companies are participating in given that the iBuyer model involves reselling homes purchased within a relatively short period of time — and at a higher price point. Offerpad’s Read estimated that her company alone is involved in $130 million in real estate transactions per month, a run rate of more than $1.5 billion for the year.
uses data to fuel its business model,” he said. “If an organization is only in one market, they only have one market to consider when making decisions. We’re currently in eight markets — eight markets that each have their own trends. The market trends can be identified with the help of data and it’s how we stay ahead of market.”
In addition to informing market trends, data also helps inform decisions Offerpad makes at the property level, according to Mayes.
“Offerpad receives data from many sources, and most importantly knows how to use when buying and selling homes,” he said. “From deep neighborhood data that helps set a benchmark for offers, to providing property characteristics to better help us determine the needs of our buyers.”
“We are doing it at a large scale,” Read said, noting that after launching in Phoenix the company has expanded to eight markets.
ATTOM analyzed homes resold by Offerpad within 12 months of the original purchase date in Phoenix in 2017 and found the median price of those sales was $26,400 above the median price at purchase. That price differential was significantly higher than the potential $15,000 expected with the Zillow resale and leaves more room for a net profit, but Read said that price differential is not the company’s primary source of revenue. “The way that we make money is that we have a fee … that varies on the home (depending on) how soon they are looking to move out of the home,” she said. “We manage all the renovations. We have our team that does that and they are very efficient to get it done and get it buyer-ready to put it back on the market.”
Data-Fueled Real Estate Disrupters The large scale Offerpad has achieved in just a few years has been fueled largely by data, according to Chief Real Estate Technology Officer Dan Mayes.
Read said Offerpad’s business model is disrupting the marketplace by giving control back to sellers.
“While real estate is at the core of our history and brand, Offerpad
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