CEO Brian Bair told National Mortgage News in a recent interview that agents no longer view Offerpad as a threat, noting that if a customer accepts the company’s cash offer, And when the home is updated and resold, they earn a 4% commission.
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Offerpad CEO Brian Bair expressed confidence in his company’s business model and profitability in a recent interview. National Mortgage News.
The company’s shares fell to an all-time low after sharing the details Second quarter results earlier this month.
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The company reported a second-quarter net loss of $13.8 million on revenue of $251.1 million. That’s slightly better than the first quarter, when Offerpad lost $17.5 million.
Around the same time, Company lays off employees Across sales, marketing and operations, the company is trying to rein in expenses to restore profitability.
CEO Brian Bair said National Mortgage News Offerpad is more focused on reducing transactions and increasing profits.
Offerpad is focused on expanding its product range beyond cash offers and refurbishment systems, and adding in-house lending to its product list.
“It’s going to be really important to integrate mortgages with some of our other technology solutions,” Bell told the outlet. “We’re pausing just to figure out when and how to do that and, frankly, make sure customers get the same mortgage experience as they do with our other products.”
Offerpad executives have been working to shift from a seller’s market to a buyer’s market by narrowing the company’s “buying framework”—narrowing the scope of the homes it evaluates to buy—and adjusting the input variables in its underwriting models to be more conservative.
“What we’ve been doing is staying very disciplined and being more specific about the inventory that we’re buying. Making sure there aren’t a lot of active (listings) in the area,” Bell said.
The company purchased 831 homes in the second quarter, down slightly from the 840 homes it purchased in the second quarter of 2023.
Bell said Offerpad will keep its homes on the market longer rather than lowering prices to satisfy potential buyers. In the meantime, the company is relying on its renovation capabilities to provide homes that are attractive to buyers, Bell said.
“We’re focused on having a really beautiful renovation that we can put on the market that’s a plus over some of the other homes in the area,” Bell told the news outlet. “New carpet, new paint, new appliances, new fixtures.”
Offerpad views its renovation business as a strength and moneymaker, providing construction and remodeling services to investors in the markets in which it operates.
Bair said he believes agents no longer view Offerpad as a threat, noting that clients can earn a 4% commission if they accept the company’s cash offer and the home is updated and resold.
He said he thinks more buyers will start working directly with listing agents due to settlements related to antitrust lawsuits filed by home sellers.
“If someone goes to a certain platform [and] They want to buy a house and I think they’ll be more comfortable with it and the listing agent will be more comfortable with showing the house,” Bell said. “I don’t know if it’s going to take six months or six years. But I do think you’re going to see a very significant shift.
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