Home trade-in platforms like Knock, Opendoor and Offerpad are seeking to create a simpler home buying and selling process for homeowners.
But now that Zillow is entering the iBuying business, they’re facing a giant competitor.
So, what does this mean for these companies? The issue came up during a panel on iBuying at this year’s Lendit Fintech Conference in San Francisco.
Despite each company on the panel having similar missions, they didn’t break out in a fight and had a cool and collected conversation about proptech innovation and what it means now that Zillow is in their rearview mirrors and stepping on the gas.
The panelists were execs from emerging companies in the iBuying real estate industry, including Jamie Glenn, Knock co-founder and COO; Dod Fraser, Opendoor’s VP of capital markets; and Rahim Lakhani, Offerpad COO.
All three agreed that they have a very similar goal in mind: to fix the pain points of buying and selling a home.
The panelists discussed what is needed to help innovate and improve the process of buying and selling a home with moderator Geoff Green, Salesforce’s global head of mortgage and lending.
“The process today of buying and selling a home really hasn’t structurally changed in a very long time, and by using balance sheet we are able to alleviate all those pain points across the entire spectrum of buying and selling a home,” said Fraser, adding: “We’re trying to keep it as simple as possible for the end customer and we are trying to reduce our cost structure every day so that we can pay more for every home we’re purchasing.”
“It’s very important to have a very low-cost structure,” Lakhani added. “The reason is, the lower your cost structure is, the more you can offer the homeowner.”
Glenn explained that Knock operates a little differently than Offerpad and Opendoor because it moves a customer into their new home before selling their old home.
“One of the things we’ve been really focused on is really empowering the consumer and providing transparency,” Glenn said. “We use our balance sheet to buy the new home for our own customers. That was a realization that they were having a hard time using their own equity or capital out of their old homes to purchase their new home.”
So how do iBuyers like this compete in a market now that Zillow has entered the ring?
Fraser said that he views Zillow’s competition positively.
“We’ve proven that we can get top-of-funnel customers, that the product-value proposition is there and customers love the product and that’s why they come to us,” he explained. “I think Zillow entering the space is a positive for all of us, because it gives better visibility to the product and it makes it a mainstream product.”
“In the end, I think the differentiator comes down to who can offer the highest price,” he added.