Web Fledgling Pays Cash to Flip Homes Fast

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Rolfe Winkler, Web Fledgling Pays Cash to Flip Homes Fast. Wall Street Journal, Jan 22, 2016.
http://www.wsj.com/articles/star ... lip-them-1453423774

Quote:

(a) "OpenDoor [Labs, Inc, based in San Francisco] is among a small group of startups armed with data scientists and software that believe they can identify the right prices on homes and cars and simplify the sales process online. Shift Technologies Inc., for example, guarantees it can sell people’s cars for a certain price within 60 days, and pays the difference if they sell for less.

"But OpenDoor is unique in that it owns all the homes it lists for sale, countering the prevailing trend in Silicon Valley of solely running a marketplace that matches buyers and sellers. As a result, OpenDoor’s strategy is steeped with risk, potentially backfiring if the economy tailspins.

(b) "OpenDoor appeals to people who need to move quickly. After a seller fills out an online form, it performs a quick market analysis and makes an offer. If accepted, the company sends an inspector to verify the home’s condition. The company may request repairs at the expense of the seller, who can still back out of the deal. The seller selects the closing date and receives cash for the house. OpenDoor says it charges 7% to 12% in fees.

"OpenDoor’s unique approach includes 24-hour self-guided open houses, made possible by special door locks that people can open by texting the company, and cameras inside the home to monitor visitors.

(c) Regarding the fee of 7-12% charged by OpenDoor, a seller (to OpenDoor) "estimates he would have paid 6% of the sales price to brokers anyway had he sold the house himself.