A new service that will make it possible to sell your home almost instantly online has received $9.85 million in funding and is now getting set to launch.
OpenDoor, previously titled Homerun, is the brainchild of former Square and PayPal executive Keith Rabois. How it works is the company analyzes loads of data to determine the value of a home and then buys it from the owner/seller. OpenDoor then turns around and sells it to a new buyer and keeps any profit from the transaction.
Of course, the question that must be asked is can you value a house solely on data? BuzzBuzzHome user Adam Naamani says:
While there is no replacement for human judgement and determining the current condition of the property, there are set adjustments for comparables in different areas, and factors that could be taken into account if the data were made available: traffic noise, power lines, conformity, over/under improvement, highest and best use, stigmas, or special assessments like water damage, for example.
Graham Rowland wonders whether it will work for all markets:
I can see this working in areas where houses are under $200,000 and tend to sit on the market for a long time, but don’t see it really working in the Toronto market where the average price is now up to $550,000+. Would you really feel comfortable spending $500,000 on a property without knowing that it is actually worth that price?
Indeed, OpenDoor’s availability will be limited to certain types of markets. Speaking to TechCrunch, OpenDoor co-founder Eric Wu said the plan is to launch in three markets to start with. Without specifying which ones, Wu said the company is looking at areas where there isn’t a lot of liquidity or demand:
[Wu] argues that a lack of liquidity ties people to debt and jobs or locations that may not benefit them anymore. Real estate transactions often take more than 90 days and homeowners often don’t have enough capital for a down payment or a mortgage, which makes home buying stressful.
“Were trying to take the 90-day process, convert into a few clicks online and make it simple easy and fast.” [Wu said]
Will it work and will people use it? We’ll find out soon enough.