Zillow and Opendoor were once competitors in the iBuying space. Now they’re teaming up.
The companies said Thursday they’ve formed a multi-year partnership to essentially feed Zillow users to Opendoor’s iBuying platform by allowing sellers on Zillow to request an offer from Opendoor to purchase their home.
Sellers can take the Opendoor offer as a standalone deal or combine it with other Zillow offerings including financing, closing and agent selection.
Opendoor president Andrew Loh Ah Kee touted the partnership as a way to help sellers “save themselves the stress and uncertainty of a traditional sale process.” Financial terms of the partnership were not disclosed.
Until recently, the two companies were fierce adversaires in iBuying, in which companies buy, renovate then quickly flip homes for a markup. That changed in November, when Zillow abruptly abandoned its iBuying business and laid off a quarter of its staff, with CEO Rich Barton blaming “unpredictability in forecasting home prices.”
Eric Wu’s Opendoor is one of a handful of firms that sought to benefit from Zillow’s withdrawal, but its pursuit of market share has not been without controversy. Earlier this week, the FTC fined Opendoor $62 million, claiming it misled customers by saying they could make more money by selling homes to its iBuying arm than through a traditional sale process.
Opendoor released a statement saying its executives “strongly disagree” with the FTC’s allegations, but settled the claim.
On Thursday, Opendoor reported a $54 million net loss for the second quarter, according to Inman. The company said it plans to cut prices on homes in its portfolio to reduce its surplus inventory.