This is the first in a four-part series on how agents can get started if they choose to partner with an iBuyer. Check back throughout February as Inman digs into iBuyers to determine what the new year has in store, where opportunities lie for real estate agents and what brokerages should expect. It’s iBuyer Month at Inman.
Since launching in 2015 in Arizona, Offerpad has grown into the second leading iBuyer in the country. The company operates in 21 markets, largely across the south and southwest, and has worked with over 25,000 agents to date.
During the third quarter of 2021, Offerpad acquired 2,753 homes— a 258 percent increase from the 769 homes it acquired the previous year. It sold a record of 1,673 homes during Q3, up 123 percent from 749 homes sold the year before.
As of the release of its Q3 earnings in early November, the company anticipated selling 5,800 to 6,000 homes over the entire course of 2021. Final fourth-quarter results won’t be available until the end of February.
Offerpad still trails in terms of its physical footprint in the iBuyer space compared to rival Opendoor, which operates in nearly twice as many markets and generates about four times as much transaction volume. But it can’t be denied that Offerpad is still growing rapidly — it opened in seven new markets in 2021 and is committed to a goal of launching in a total of 15 markets over the course of 2021 and 2022. The iBuyer is also planning to launch soon in three different California markets: Riverside, San Bernardino and Sacramento.
And in terms of some of the other main players still remaining in the iBuyer space following the bowing out of Zillow Offers (like Redfin Now and Keller Offers) Offerpad has a differentiating factor that may work slightly to its advantage, since it’s the only other major company solely dedicated to iBuying aside from Opendoor. Plus, its leadership team is made up of individuals with real estate backgrounds, a fact that some agents may find reassuring, if nothing else.
“Opendoor was kind of founded out of Silicon Valley,” real estate tech expert and advisor Mike DelPrete told Inman. “If you look at its executive team and its founders, they’re all kind of tech folks. Offerpad was founded out of real estate — at least half of the founding team is coming from traditional real estate, whether it’s agents or institutional investing or single-family rentals, so they’ve come at it from a different approach.”
For real estate agents looking to enter the iBuyer market or merely up their iBuyer game, Offerpad could be a smart choice in a partner. Here’s what agents who want to work with the iBuyer should know.
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Where to start with Offerpad
Agents interested in exploring what Offerpad has to offer should start by visiting the agent-facing page on their website at Offerpad.com/agents. The page includes all the details about their Agent Partnership Program, reviews from other agents who have worked with the iBuyer, contact information for the company’s Agent Partnership Program staff and a link to Offerpad’s Express purchase offer request form.
“That [page] is designed to help [agents] understand all the different ways Offerpad can support them and help them grow their business and be a solution for their clients,” Brigham Weight, Offerpad’s national director of agent partnerships, told Inman.
Agents who want to submit a client’s home for an Express offer will need to provide some basic details about the home, including number of bedrooms and bathrooms, square footage, types of flooring, information about the backyard, any upgrades that have been done to the home, etc. Agents will also need to upload a number of photos of the home, which can be taken with a cell phone camera — no need for professional-grade photos. The more clear photos agents can provide, the better, since those will help Offerpad more accurately determine the home’s value and what kind of repairs (and their costs) will be needed.
Once the Express purchase offer request form has been completed and all photos submitted, Offerpad begins the underwriting process, reviewing all relevant market data, and sends an offer to agents to present to their clients within 24 hours. Agents and their clients then technically have four days to consider the offer before it expires. But, that’s not exactly a hard and fast deadline — if clients want more time to consider it, Offerpad can grant them an extension on the offer. And even if the offer does expire, the company can renew it later.
A common misconception agents have, Weight said, is that in order to get started working with Offerpad, agents have to sign up or opt in to something. But, that’s not the case — the way to get started is by submitting an offer for a client, and from there, the Offerpad team will begin reaching out and building a relationship with the agent.
The room for negotiation
Like any other buyer, Offerpad is willing to negotiate, so agents can reassure their clients that once they receive an initial offer from the company, it’s not like it’s a “take it or leave it” situation.
“Flexibility truly is the calling card that we want to be able to extend, not only to clients, but [also to] agents,” Weight said. “So we will absolutely discuss the offer with them, we’ll answer their questions, we’ll help them understand the valuation of where we came from, what the market is showing, what the analysis of what homes are going for in that area are showing. And if needed, we absolutely will review the offer, discuss counter offers, see if we can come up to that number or meet in the middle.”
In addition to the ability to negotiate on price, one of the big appeals of working with iBuyers like Offerpad, of course, is the ability for clients to set their own timeline for when they close. With Offerpad, clients can choose a closing date that coordinates with when they close on the purchase of their new home (avoiding double mortgage payments), and can even stay in their old home for up to three days after closing through the company’s Extended Stay program.
Another perk that will appeal to clients who move locally (within 50 miles of their old home) is that Offerpad will cover the cost of a local moving company to move a homeowner’s belongings. The moving company will coordinate directly with the homeowner and homeowners can negotiate with movers to pack up their belongings for an additional fee. Criteria for eligibility vary slightly by state, so agents with clients interested in this service should make sure they understand their eligibility.
Agent commissions and benefits
Since Offerpad launched its Agent Partnership Program in July 2020, the company has paid out over $100 million in referral fees to its partner agents across the country.
The company has built into its partnership program a significant incentive for agents who bring their clients to Offerpad from the get-go — agents who meet all eligibility criteria can earn a 3 percent referral fee for sending Offerpad clients who haven’t listed their home on the MLS yet.
In addition to presenting a property that hasn’t been listed on the MLS within the last 30 days, agents are eligible to earn the 3 percent commission if they have not submitted an offer on Offerpad within the last 30 days (and if their client hasn’t either), if they’ve presented current interior and exterior photos of the property at the time of submitting a request, if the agent continues to represent the seller and be available throughout, and providing the sale closes successfully.
Agents who submit a request for an offer to Offerpad whose client has already listed on the MLS, will not receive any referral commission from the iBuyer, however.
Another benefit of working with Offerpad is access to the company’s online Real Estate Solutions Center. The center allows for Agent Partnership Program team training and support and provides a series of webinars for agents. The iBuyer also sponsors networking opportunities and has local teams of business development directors who can provide different trainings, sales meeting presentations, lunch and learns, etc., to groups of agents.
“Our team of partnership directors across the country are there to support agents in their markets and really help them see how they can grow their business by incorporating some of these tools that Offerpad supplies,” Weight said.
What agents and their clients need to know
Erik Geisler, an agent with West USA Realty in Gilbert, Arizona, has done upwards of 15 or so deals with Offerpad. He said that something he wished he knew in advance of starting to work with the company is how they want to develop a genuine relationship with the agents they work with. Since he found an Offerpad rep that he works well with, he’s worked exclusively with her on his transactions.
“She gets me,” he said. “Business is about relationships, and Lauren and I are able to do that.”
Geisler praised the company’s service across the board, noting that it feels like Offerpad is working on the same team as him and his client. “Their service is impeccable — you can’t go to a restaurant or anywhere else to get that kind of service.”
But Geisler also pointed out that he wished he knew in advance how to best explain Offerpad’s fees to his clients, which took a bit of time for him to understand himself. The iBuyer charges consumers a 5 percent service fee for its cash offers, in addition to charges for any necessary repairs on the home. Geisler said he first points out to his clients that the 5 percent fee isn’t a commission that Offerpad just takes for themselves.
“It’s a fee that they charge internally — it’s not like they’re writing themselves a check that’s all going to them,” Geiser said he tells clients. “But part of the process is, they’re house flippers. This is what they do, they flip a house. And if they have a purchase price of $400,000 and they’re going to put paint and a new carpet in it and put it back on the market a month later for $430,000, it looks a lot better that they paid $400,000 for it than $370,000 because people can see that [in the sales history].”
Because Offerpad will also charge clients for any necessary repairs — they have specific criteria for what things need to be replaced, and when — Geiser said he also requests that the company provide the numbers on those repairs upfront, as accurately as possible, and provide them at the same time as the home offer price. That way, his clients don’t get over-excited seeing an initial offer and then discouraged when Offerpad comes back to them with $12,000, for example, of needed repairs after an inspection.
Geiser has also learned a lot about what things the company will deem as a necessary repair over time (i.e. air conditioning units of a certain age need to be replaced, no matter how well they run), so he’s always sure to be diligent when documenting damage in the home, and takes good photos so that Offerpad can catch those repairs early in the process. Then, Geiser can go ahead and start negotiating on his client’s behalf right away.
“They’re willing to negotiate,” Geiser said. “I’m like, ‘Hey, you’ve got $12,000 worth of repairs in here. Let’s negotiate. If, instead of $370,000, can we get to $375,000?’ And they’re great at negotiating and a lot of times they’ll do that.”
As when using any iBuyer, the primary drawback is that agents’ clients will ultimately pay for the convenience of a cash offer, not having to deal with home showings and being able to close on their own timeline. Although there is a little room for negotiation with Offerpad, agents who put their clients’ homes on the open market will still likely get their clients more money in the long-run.
But for people in different situations, like some of Geiser’s clients who are healthcare workers that work night shifts and sleep during the day, the slightly lower profit on the sale is worth the ways in which it makes selling their homes easier.
Geiser also added that if agents aren’t presenting some form of a cash offer to listing appointments in today’s market, they risk losing out on the listing.
“As agents, we not only need to have more tools in our tool bag, we have to be educated on products that are available. We’ve got to be willing to do what’s best for our clients — or they’re going to find somebody that will,” he said.
Geiser’s only real criticism of Offerpad — despite the company’s own pride in its agent training and business development opportunities — was that he wished someone from Offerpad had trained him on all the ins and outs of how doing a sale with them works in advance of him diving right in. He also wished that he knew the company offered in-person training for brokerages, so that agents better understood the benefits of working with them.
“If they were able to train us — maybe they do, and I just missed it — but I haven’t seen any training of that sort,” Geiser said. “To answer your question, there’s a lot of things they offer that agents don’t know about, and I wish there was a way that that was out there more.”