In the wake of Zillow’s iBuying demise, its former rival Offerpad appears to be headed in the opposite direction with more than half a billion in credit to expand its home buying business.
The company landed $500 million in a revolving credit facility, according to a Dec. 20 SEC filing reported by HousingWire. The lender was not disclosed by the company and reportedly absent from the filing.
Offerpad has committed to borrowing at least $300 million from that credit facility, HousingWire reported. The company has also taken out a $112.5 million mezzanine secured credit facility, of which it has committed to spend $67.5 million. Ultimately, the facilities total more than $600 million.
A spokesperson told Inman the company intends to “borrow only what we use to add inventory, where we continue to apply our disciplined approach to underwriting homes.”
“In fact, these credit facilities expand our borrowing capacity, lower our overall borrowing costs, and further expand and diversify our lender relationships,” the spokesperson said.
Offerpad is one of the last iBuying brands standing after Zillow’s spectacular fall from the field.
The company went public in September by merging with a SPAC and narrowed its loss in the third quarter to $15.3 million as it nearly tripled revenue to $540 million, the company reported.
During the third quarter, the company acquired 2,753 homes, an increase of 258 percent from the previous quarter. It sold 1,673 homes during that period, a 123 percent increase.
Overall, iBuyers continued to play an increasingly noticeable role in the housing market during the third quarter.
A Zillow report on the third quarter for the four largest iBuyers — Opendoor, Zillow Offers, Offerpad and RedfinNow — said homeowners sold more than 27,000 homes totaling $10.6 billion through iBuying services.
In the third quarter, iBuyers accounted for 1.9 percent of home sales in the country, representing a near doubling of the peak reached in the second quarter. The median price of a home sold to an iBuyer in the third quarter was $376,000, 13.9 percent higher than the overall market.
[HousingWire] — Holden Walter-Warner