Zillow and OpenDoor have expanded a seller-lead agreement launched in February so that it’s now live in 16 U.S. markets.
Under the agreement, OpenDoor’s instant cash offer to home sellers is presented on Zillow as an alternative to a conventional sale with an agent. It’s a way for OpenDoor to expand the reach of its IBuying service, and a way for Zillow to continue presenting cash offers, even if it no longer buys homes directly.
OpenDoor offers on Zillow were introduced in February in two markets: Atlanta and Raleigh, North Carolina. The arrangement expanded in March to Houston, Phoenix and Dallas.
As of this month, according to an OpenDoor blog post, it’s also available in 11 additional markets: Tucson, Arizona; Charlotte, North Carolina; the Colorado cities of Denver, Colorado Springs, Boulder and Fort Collins; the South Carolina cities of Columbia and Greenville; and the Texas cities of San Antonio, Austin and Killeen.
For several years, Zillow participated directly in IBuying, and quickly became the leading rival to OpenDoor in mass-market home flipping. But after running up crippling losses in the whipsawing pandemic real estate market, Zillow announced its withdrawal from IBuying in November 2021.
It found its way back into the niche with the lead-trading arrangement with OpenDoor. While OpenDoor gets leads for its cash-offer business, Zillow’s Premier Agent lead-gen service benefits by capturing potential IBuying customers who opt for a conventional sales process.
The companies have not disclosed how the arrangement performs in terms of lead generation or revenue.
But IBuying activity is down sharply from 2021. OpenDoor purchased just 1,747 homes in Q1 2023, down 81% year on year. The company’s revenue of $3.1 billion was down 39% y-o-y.
With IBuying on the wane, OpenDoor is trying to buttress its business with OpenDoor Exclusives, a marketplace of home listings unavailable on other platforms. First announced in August 2022, the program operated in just one market, Plano, Texas, at the end of Q1. The company reported “promising traction” for the product, while admitting the number of closed transactions had been small.