Let Valuation Tech Help Improve Your Collateral Valuation

Join this webinar to learn how technological advancements in valuation provide solutions to help lenders and servicers deliver more comprehensive offerings to their clients.

Talking proptech with FinLedger Director Holden Page

In this episode, Page discusses the hottest topics coming across FinLedger’s news desk. Topics include: the online banking market, what’s happening in the proptech space and recent private market deals.

engage.marketing 2021

We brought together the smartest minds in purchase marketing to share the insights, tactics and strategies that set the leaders apart. Watch the sessions on-demand now!

How Rocket Pro TPO continues to give its broker partners the upper hand

To remain competitive and create a better experience in this purchase environment, brokers need one thing above all: Speed. And there’s one lending partner that has the solutions and resources to give LOs just that.

Real EstateBrokerage

Amid expansion, Opendoor lost $270M in Q1

Instant homebuyer's revenue also dropped 40% year over year

Opendoor wants to give residential real estate brokerages a run for their money, but its first quarter earnings suggest the company is not quite there yet.   

The San Francisco-based instant homebuyer announced a net income loss of $270 million on Tuesday, a 421 percent jump compared to the first quarter of 2020’s $62 million deficit. The Q1 2021 loss approached Opendoor’s $280 million net income loss for all of 2020.

A leap in losses can be a hazard of a growing company, even those with bountiful capital backing. And by some secondary measurements, Opendoor is growing.

Customers can now sell and buy homes with Opendoor in 27 different markets compared to 21 one year ago. Also, Opendoor bought 3,594 homes in the first quarter, a significant increase from prior three-month periods, and a sign the company has ramped up operations after a pandemic pause.

But Opendoor’s first-quarter revenue was $747 million, a 40% drop from the first quarter in 2020. Opendoor generates the majority of its revenue from reselling the homes it buys, and the company sold 2,462 homes in the first quarter, a decline from prior periods.


How real estate agents can alleviate consumer pain points in a tight market

The severe lack of inventory in today’s housing market has been a source of stress for home buyers and real estate agents alike. HousingWire sat down with Realtor.com CEO David Doctorow to learn how agents and brokers can alleviate some of the frustrations their clients are facing.

Presented by: Move Sales (Realtor.com)

How Opendoor could sell comparably fewer homes in Q1 amid historically high demand and low inventory was not addressed on a Tuesday earnings call.

Instead, CEO Eric Wu and Chief Financial Officer Carrie Wheeler painted a picture seemingly at odds with the figures listed on the balance sheet.   

“We are getting better and more efficient at this,” Wu said, providing as evidence that Opendoor sold more homes during the first weekend on market and for higher prices per sale – phenomena that touched every corner of the housing market at the start of 2021.

Wheeler described Opendoor as, “Having an exceptional first quarter.”

Market analysts on the call did not question Wu and Wheeler, and instead discussed matters such as Opendoor’s entry into title and mortgage, and whether the company is disproportionately affected by the well-documented lumber shortage (answer: not really).

Founded in 2014, Opendoor is a pioneer in cash home-buys moving online, and an alternative to home sellers having to work with real estate agents. The company grew partly thanks to venture capital money, including from Tokyo-based SoftBank Group.

But Opendoor’s revenue – which is mainly selling the homes it buys and collecting a 5% fee on home purchases – have not kept up with expenses.  

In Q1 2021, for example, Opendoor’s $747 million in revenue was countered by $650 million in “costs of revenue,” a figure tied to cash Opendoor offered for homes.

That generated a $97 million gross profit for the company. But the firm additionally had $342 million in operating expenses. This included $224 million on general administrative expenses, $51 million on technology and development, and $69 million on sales and marketing.

Leave a comment

Most Popular Articles

Will we ever see a “normal” housing market again?

The question on everyone’s minds: When will this hot housing market cool down? Arch MI investigates this and more in its Spring Housing and Mortgage Market Review.

Jun 22, 2021 By

Latest Articles

TitleWave launches Colorado branch

TitleWave Real Estate Solutions of Florida has announced a new location in Colorado, as well as the launch of its title and search report technology.

Jun 24, 2021 By
3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please