iBuying Giant Opendoor to start offering home loans

Buy a juggernaut Open door announced Thursday it has launched its own mortgage service, marking the company’s latest move to completely disrupt the real estate industry.

Opendoor Home Loans is now available in the Texas markets of Dallas-Fort Worth, Austin, Houston and San Antonio, as well as Phoenix and Tucson in Arizona. The new service is the result of 10 months of work in which Opendoor “built a mortgage business from the ground up,” according to a company blog post. And it is said to be simpler and more cost effective than the other loan options.

“In a matter of minutes, buyers can discover their purchasing power and take the first steps towards financing their dream home,” Opendoor explained in his blog post. “Homebuyers in Texas and Arizona, whether they buy a home through our buying service or any home on the market, are already pre-qualified for a mortgage with Opendoor Home Loans in the Opendoor app. “

Screenshots showing the Opendoor Home Loans interface. Credit: Open Door

Opendoor says its interest rates are competitive with what consumers can find elsewhere, and has said that at least initially, it will contribute $ 1,000 towards closing costs in exchange for using the service. The company also guarantees that buyers will close their loans on time; if the process drags past the set closing date, Opendoor will “credit the buyer $ 100 per day for each day of delay,” the company explained in the blog post on Thursday.

Opendoor Home Loans clients will also have access to a ‘dedicated mortgage consultant’ who will provide updates and advice. The company believes that all of these features should ultimately lead to a better and faster experience for buyers.

“It typically takes 45 days for buyers to finance and close a new home,” Opendoor said in its statement. “It’s 45 days of uncertainty, anxiety and stress that we can cut in half with Opendoor Home Loans.”

A company spokesperson further told Inman in an email that “Opendoor mortgage loans currently last an average of 27 days from the date of application to the closing date.” The fastest turnaround time in initial testing of the service, which has been running for several months, was 20 days.

Opendoor’s announcement comes at a time when lending is a particularly hot area of ​​interest for real estate companies. In April, for example, Zillow announced its own loan service, Zillow Home Loans.

Redfin’s version of a loan service, launched in 2017, has regularly enlarged This year.

Startups such as Real, Inferior and Mixed have also all made recent plays in the lending industry.

And in February, Chase Home Lending promised to close borrowers in 21 days – or pay them $ 1,000.

But Opendoor has been particularly outspoken about its ambitions to shake up the real estate industry. For example, at the end of last year, the CEO of Opendoor Eric Wu said that he may wish to render the services of his company – which involve offer quick money offers to sellers – free to consumers. He also has considering a “winner takes the most” world in which his company comes to dominate iBuying in the same way Amazon dominates e-commerce. He also has sees automation develop to the point where agents end up taking on an advisory role in the industry.

The fact that Opendoor has raised over $ 1 billion in funding and is valued at nearly $ 4 billion, also suggests the company may be one of the few companies with the war chest to achieve its ambitions.

Regarding Opendoor Home Loans, the company plans to expand the service in the coming months, although it has not specified which markets might be next. However, in his blog post Thursday, Opendoor suggested that the loan offer was part of a larger strategy that would allow it to dominate its niche.

“It brings us one step closer to providing an end-to-end experience,” the blog said, “where you can buy, sell or trade a home with just a few clicks.”

Email Jim Dalrymple II

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