Introducing new technology to improve home quality

“I needed a move-in ready home,” Oscar Garza, a new homeowner in Austin, Texas stated. When he began his home search, he was discouraged. He needed space to accommodate his four children while staying within budget, and a good-condition home to qualify for his FHA loan. “I sold my home to Opendoor a few years ago which helped me pay off my student loans, so I turned to the company again when it was time to buy a new one – and I’m so glad I did.” 

Home condition is becoming increasingly important for buyers like Oscar, especially as affordability tightens in this high-interest rate environment. Data shows people are saving less in 2023, with the personal savings rate dropping below the historical average. Americans have less extra cash lying around to make upgrades, impacting their ability to both prepare a home to sell and to improve a recently purchased home. The costs to upgrade a home have more than doubled over the past five years, so it’s not surprising that 67% of buyers and 77% of sellers don’t want to pay for remodeling or repairs.

As one of the largest home buyers and sellers in the U.S., we’re able to bridge the gap between sellers and buyers when it comes to home condition. Today, we’re introducing a suite of programs and technologies we've developed over the past few months to factor home condition into our pricing for sellers and to ensure that our listed homes are ready for potential buyers. 

Using AI to build the best possible seller experience

At Opendoor, we aim to provide customers with offers for their homes based on hundreds of thousands of data points powered by both human expertise and artificial intelligence (AI). Our pricing model takes into account the latest information available about a market from home prices and time-to-sell to macroeconomic trends, and also captures home-level data sellers provide directly during the process. 

Since our founding, we’ve sent millions of home offers using this model – a model that has evolved over the past nine years to improve with each home we acquire and make an offer on. We’re constantly expanding our dataset to make the most competitive offers possible and understanding a home’s condition is a core element in how we price homes. 

Over the past few months, we've incorporated computer vision and AI-based modeling in our pricing models to account for home condition. When a customer comes to us for a preliminary offer, we’re testing a new step within the seller questionnaire: a series of home photos with varied conditions, and they select the one that looks most like theirs. This helps us give a more targeted preliminary offer. To finalize it, our pricing analyst team examines the home’s interior through photos and videos uploaded by the customer, gathering structured data that feeds into our acquisition pricing system. We’re able to use traditionally subjective data like the level of datedness of the finishings and turn it into structured data, allowing us to have a quantitative basis for determining how much a home is worth. Our model also helps us determine whether additional cosmetic renovation would create value for the seller and buyer. 

Scaling renovations to give buyers turnkey homes

70% of buyers say they want turnkey homes right now. This year, we’ve been expanding our repair and renovation capabilities, as well as our interior design efforts, to provide buyers with more turnkey options. For the majority of our homes, Opendoor invests in necessary upgrades to ensure the home is marketable and ready for new owners. This includes fixing items that aren’t functional, replacing old flooring, and/or re-painting the interior. With these upgrades, we’re able to ensure that seller financing (like Oscar who needed a move-in ready home to qualify for an FHA loan) or access to vendors and materials (especially as the costs to upgrade a home have more than doubled over the past five years) are not barriers to entry. We execute the cosmetic and functional investments a homebuyer has come to expect in a market-ready home today. 

On top of this baseline established for every home we list, we developed a new upgrade program for a select segment of eligible Opendoor homes. With this program, we are conducting a thorough remodel with fully modern finishes, all completed by our team of experts before the home is listed on the market – this includes projects ranging from renovating kitchens and bathrooms to reimagining floor plans. 

With nearly 80 years of combined experience, our interior designers have a pulse on local market trends, what sells, and what doesn’t. This team has built a massive library and automated template system for home renovations based on location for each of our markets. Templates are turned into bespoke designs to enable renovations at scale and to create professionally designed spaces everywhere we operate. As a result, homes in our upgrade program meet high-quality standards but are completed at a more competitive price on a faster timeline than if the buyer were to independently hire designers and contractors.

For a typical two-story home, a full set of interior design plans would take around 150 hours. With our team and technology, it takes an average of 6.5 hours per home – that’s 95% faster.

In addition to investing in targeted design work that’s ROI-positive, we’ve more than doubled our renovation efficiency (measured as spend per renovation day) so that we can deliver quality turnkey homes in less time. Our team of in-house designers and experts has greatly improved the datedness and finish level in many homes. By focusing on large upgrades, we have renovated nearly 600 homes to date — and homes in this upgrade program tend to sell nearly 30% faster than more dated homes.

Incorporating new remote tools to care for listed homes 

Once homes to sell are in our hands, we maintain them in move-in-ready condition. Since listed homes require ongoing care, we developed new technology to give real-time feedback to our maintenance partners, such as landscapers, pool cleaners, and housekeepers and enables them to upload before and after photos to an internal app that applies a date time stamp and geolocation to validate the work. This remote quality control has improved the compliance of our maintenance standards and independent agent feedback told us our homes looked better for their buyers. 

As a customer-obsessed company, collecting and reacting to feedback is critical to delivering a product and experience customers love.

Agents and buyers who visit Opendoor homes are a great source of feedback. After a home tour, our app asks them to indicate whether they liked a home or not. We now also prompt them to report any issues they noticed during their visit. This feedback response helps us to quickly triage and respond to issues such as a leaky faucet or yard debris that can arise with listed homes. 

With these updates to our technology platform, we are able to account for a seller’s upgrades in the preliminary offer, analyze the most effective upgrades based on buyer demands, and have the ability to execute high-quality renovations quickly with our scalable design system. 

“From a tiny apartment to a turnkey home with a backyard, I couldn’t be happier,” Oscar beamed. “As a comic book artist and pro-wrestler, the home fits my unique needs and hobbies – and most importantly, all my kids don’t have to brush their teeth in one bathroom.” 

At Opendoor, we’re constantly developing new technologies to improve our inventory and home offers, making the real estate journey even easier for our customers. Download the Opendoor app today to learn more. 

Brad Bonney is the Head of Market Operations at Opendoor.