OpenDoor Lays Off More Than 20% of Workforce
Opendoor, the disruptive real estate company out of California, is one firm that joins many others in laying off employees. Yes, 2020 is not kind to workers of all stripes across industries. TechCrunch notes that the company aims to help buy and sell homes in a streamlined fashion.
Let’s find out more about the company and the current situation.
The Home Transaction Process Simplified
Buying and selling a home by yourself or with a real estate agent is a tedious process. You might have to seek out a real estate agent, then establish rapport, and finally begin your home transaction process.
That takes even more time. Then you must deal with all the aspects of closing the transactions.
There’s much involved in the entire ordeal. That is where Opendoor saw an opportunity to step into the industry and make it more simple.
The OpenDoor Process
Are you interested in selling your home? Go to Opendoor and tell them about your house.
Wait one day.
OpenDoor responds with a cash offer. OpenDoor sends a representative and inspects if your house needs repairs, it fixes it for you.
Schedule your time to move out, and you’re done. That’s it. See how that is simple and clean compared to the current process? Go to a website, and everything is done for you.
Enter some information, push a few buttons, and voila, you’ve taken care of your current house.
The firm earns through a 7.5% service charge.
TechCrunch notes that at least 600 employees were let go. You can have booms and busts in real estate, and offering liquidity in a booming market might be more comfortable than in a bust market. OpenDoor must account for the present downturn in the economy and potential effects the coronavirus will have on buyer and seller psychology.
There’s other firms like Zillow that are similar to OpenDoor in that it will purchase homes directly from you, the seller. But it is also waiting out the storm. It notes on its website “while we are temporarily pausing home purchasing due to the impact of COVID-19 and public health orders, our team is here to help you sell. Submit a request to join the waitlist for a Zillow Offer, connect with a local agent, or speak to an advisor to discuss options.” Zillow is a larger entity in the space as it has ramped up its buying program.
The Future for OpenDoor
But all is not lost for OpenDoor. It is still a relevant company that should have a bright future. The current climate with the coronavirus may linger for some time and depress home values.
Homes on the market should decline in aggregate, and this affects the rate of transactions OpenDoor can process profitably. Lower transactions equal less work. The company is moving in a cautious manner and halting direct buys of houses. Instead, it will work with other services to meet the void and connect buyers and sellers.
It will have to bide its time and and continue to tighten operations while moving forward.