Offerpad disrupts the residential real estate sector
Who is going to bet against a residential real estate company whose leadership team has purchased, renovated, rented or sold more than 100,000 homes?
Certainly not investors. Since it was founded in 2015, Gilbert-based Offerpad has raised more than $410 million in equity and debt, is projected to buy and sell more than $1.5 billion of single-family homes over the next year, has an eye-popping 94 percent customer satisfaction rating and is redefining an industry.
So how does it work?
“Our approach fundamentally changes the way people buy and sell homes,” says Jerry Coleman, co-founder Offerpad. “Instead of paying for the renovations needed to sell a home and waiting four or five months for closing, we buy homes from those who want to sell quickly and for a guaranteed price.”
With Offerpad, homeowners complete an online form and receive an offer on their home within a day or so. Homeowners pick their closing date. Offerpad then makes necessary renovations and lists the home for re-sale on its online platform. The formula is working. After just three years in business, OfferPad is on pace to generate close to $1 billion in revenue this year.
Az Business talked with Coleman to find out how Offerpad is disrupting an industry.
Az Business: Who are Offerpad’s customers?
Jerry Coleman: We are dealing with an on-demand customer. Our typical customer shops at Amazon instead of brick-and-mortar retail. They stream Netflix instead of renting a movie. But we’ve found Offerpad also appeals to anyone who sold a house before and has experienced how hard it is going through that process. They like what we are doing.
AB: What benefits does Offerpad give the consumer?
JC: In a traditional home sale, you don’t know when the home is going to close, you don’t know how much it’s going to close for, you might need to do renovations while you’re still living in there, you’ll have to deal with strangers coming through your home for showings and you’re limited in how fast you can move. Offerpad is all about providing the customer a seamless experience and a much faster close.
AB: What has been the reaction from those in the traditional real estate industry?
JC: We started Offerpad because we saw this as a massive value-add for the homeowner. We are very aware of what disruption can mean in this industry, but that’s not our focus. Our focus is on providing the best experience for the homeowner. We pay millions and millions of dollars in commissions to agents who sell our re-listed homes. We are very agent-friendly. This was more about us saying, “Hey, there’s another option needed.”
AB: Where do you hope to take Offerpad?
JC: Our long-term goal is to bring this model to as many homeowners as we can, grow the volume we are doing in the eight markets we are in now and open up new markets. We want to be able to offer the same economic homeowners would get from a traditional sale as they would get from us. The end goal is to provide a one-stop solution for our customers.