Market Proof Marketing · Sorting Through the Perceptions & Realities of Today’s Mismatched Market with Nick Boniakowski
In this episode, Kevin Oakley is joined by Nicholas Boniakowski, Head of Agent Partnerships at Opendoor. Together, they discuss an article from Opendoor that sheds light on the current real estate market. Nick unpacks what a “mismatched market” means and the inconsistencies with what consumers are saying and what they are doing. They talk about the future of the economy and Opendoor’s dedication to making sure sellers know they have options in an uncertain market.
Questions? Comments? Email show@doyouconvert.com or call 404-369-2595 and we’ll address them on the next episode. More insights, discussions, and opportunities in the Market Proof Marketing Facebook group.
Kevin
And today we have Nick Boniakwoski, head of agent partnerships at Opendoor here to sit down and talk about some of the research that they've found in terms of a mismatched market perceptions versus reality. Some some really great insights and takeaways. And Nick, thanks for joining the program.
Nick
Thanks, Kevin. Thanks for having me.
Kevin
Now, your title, head of agent Partnerships at Opendoor. Give us a quick background of what it is that you do Opendoor, how you found yourself there, and kind of the background that that makes you the right person to be talking to today.
Nick
Sure. And up to. So I'm coming up on about almost two years at Opendoor now, but I've been in real estate in and around real estate for most of my professional career, which sadly not to date myself, goes back. Coming up on two decades, I've had about 15, 16 years in the real estate industry starting.
Kevin
Do you still have so much hair as if you've been around in real estate that long?
Nick
I've I. You can't see the back of my head. I'll just. I'll just say that. And I'm going to look forward on this camera for the rest of the time. But no, it's, you know, I so I can't say that I've seen a few cycles now and I'm sure we'll talk about later in this conversation kind of how this one is unprecedented.
Nick
But I did grow up in a third generation real estate office right about my grandparents. First job was organizing the filing cabinets that our deal folders went into. And I remember in that job when I was 14 or 15, you know, moving these folders up to the attic because it was a New Jersey law where I'm from. Yeah.
Nick
To maintain these files for seven years. I remember in those early days thinking, Man, I'm using my computer for everything. When is this part going to change? When is that going to change? So I've been fascinated with the industry and that intersection with technology, which has led me down a series of different jobs in in the industry, some some years at some other big real estate companies, including Redfin.
Nick
I actually worked at Realogy. Now anywhere brands for a little bit, but always kind of at that forefront that intersection of of marrying the old with the new, you know the brilliance of all the new technology in the world alongside the new local expertise that an agent can bring. So talking about, you know, how I'm in this, where I am at this role now as head of agent partnerships, it's really about meeting the consumer where they are.
Nick
And that's generally the theme of our our whole partnerships team at Opendoor, where, you know, we're trying to do a lot of interesting things to digitize the home buying and selling process, working with consumers, giving them other options to to move with the click of a button. On the partnership side, we also recognize that, you know, in 2023, while technology continues to improve the process, you know, customers are comfortable working in different ways.
Nick
And on agent partnerships, it's our recognition that, you know, many, many, many consumers have that trusted advisor in their local network. They want to work with that person. So my job is to basically reach out to the agent community, help agents and brokerages understand ways that they can partner with Opendoor to make Opendoor a solution for their customers that want the best of both worlds.
Nick
You know, the guidance from their their trusted advisor and access to open doors digital home selling or buying solution.
Kevin
So I think that's awesome. One, it's great to see always see people who have kind of that front line experience and so that background in the agent world of seeing transactions and being involved in transactions, definitely that's always one of the missing pieces when we start abstracting to other layers of technology and finance and operations. And it's like, have you done this?
Kevin
You know, you kind of if you sit in enough brainstorming sessions with people who haven't been involved to that degree in the real estate world, it's just almost it's just really hard to come out with what the consumer really does want. I think that's interesting. And then second, I think it's really interesting that part of the approach, it appears that Opendoor is, hey, we need to have great data and great insights to share with agents as well as consumers, as well as builders.
Kevin
And that's again, kind of brings us back to this article of of, you know, anything that can be used to inform, better inform kind of all of our mutual customers. It's it's it's good for everybody.
Nick
Yeah. Yeah. I totally agree. I mean, and that's one of the enjoyable and exciting parts of my role actually. In addition to data, you know, we have access to hundreds of thousands of consumers. So, you know, with that access, I agree with you. And there's a sense of responsibility around, well, how can we pull conclusions not just keep them from ourselves, but really inform, you know, the broader population of the vendors, partners and the various folks that are going to be interacting with customers.
Nick
And that's truly been one of my favorite parts about working in the real estate industry in that like at its heart, it's very collaborative. You know, the nature of of buyers and sellers and representation on all sides and that people are generally trying to work together. And that's what we're doing with a lot of these surveys that we publish, you know, with that access to consumers, you know, we can collect some insights and hopefully share them with the industry so they can better position their products or for our for our agents, they can look to Opendoor and realize that, you know, we're here to inform and educate and make the process better for for everyone
Nick
out there along those lines and into the data, which, you know, I will walk through today, I have the privilege of talking to agents across the country in my in my role, whether they're partners or just new agents that are interested in hearing about us. And that may be at conferences or individual office visits. But we have a team at Opendoor.
Nick
Literally in the past 24 hours, I've talked to an independent broker in Charlotte, in North Carolina, and I had a meeting with, you know, one of the larger teams in in the Houston market of Texas. So we get an interesting perspective, which is a theme We'll talk about a bit today, I think, in what's going on with mismatched buyer and seller expectations.
Nick
But just this idea that, you know, real estate, we all know it's hyper local, but that's also true. And what the data shows us, that it can feel like a hot market in one area and it can feel extremely cold in another.
Kevin
So yeah, and we'll have a link to the article in the show notes and I'll show it here. For those of you watching on on video right now as well. But I mean, Mismatch market, I love how it opens of you know, everyone wants to try to summarize it down to a point of is it a buyer's market or a seller's market?
Kevin
And I think the the first thing of the article really points out is that buyers and sellers are both in agreement that it's a tough market, but maybe for different reasons depending on the side of it. You're on. But but no one thinks that the current market is a panacea for either side. It's a fair way to say it.
Nick
I think so. I mean, I think when you pay attention to headlines, people have realized that it's been what I would call a seller's market for for quite a few years, although that's that's shifted mostly because of the volatility. And I think whereas if you had to get someone to choose buyer or sellers, you're going to have more folks that are going to say, well, it's likely easier to be a seller, just given the fact that inventory is extremely low and interest rates are triple what they were a year ago.
Nick
That said, it is clearly a different seller's market or less so than it has been in some of these crazy years of the last few. So yeah, you're generally just getting a lot of confusion where I think people hesitate to answer that question specifically. And it's part of the reason why we went into this this research just to kind of to settle this.
Nick
And I think as we see in the data and reading this report, it still is a little bit inconclusive, although there is some alignment on buyers and sellers. And I think the reality is that however people feel about how easy it might be to sell your home right now, there's just general agreement that it's tough. I mean, it is a tough a tough place to be transacting.
Nick
And most of the people that we're seeing moving are doing so because of, you know, life events, reasons that they have to be dealing with. A lot of speculative buyers right now are looking to take advantage of some opportunity in the market. So.
Kevin
Yeah, and typically when you hear the terms buyer's market or seller's market, it's like everything on either side of the ledger is in favor of that audience. And that's that's what we're saying here, is that, yes, it's still more a seller's market than not, but it's not in past seller's markets. It's been like the seller can just state their terms and get what they want.
Kevin
There's there are going to need to be concessions. If you're going to talk a little bit more about at the end or expected concessions on either side and that's a little bit more nuanced. And of course, it all depends on the specific markets. But next in the article that I thought was really interesting, it says the top five housing market concerns all generations actually can agree on in the top three.
Kevin
So the question was, you know, what what are the things about the housing market that's concerning to you? 77% said interest rates, 72% said home affordability, which I think is interesting. And a weak economy was 60%. The next two were not over 50%, but still a good portion. Lack of homes for sale, 34% and high unemployment at 20%.
Kevin
Interest rates are an unavoidable reality. So that one, we could we could talk more about that, Nick, but I want to maybe just have a little more conversation on your perspective of the next two, which is affordability. This doesn't really seem to be slowing people down. In the article, it talks about the fact that kind of the velocity of of sales as a percentage of what's available, 3% I think is a weak roughly is higher than it was in 2019.
Kevin
So even though it's a concern, it doesn't seem to be something that's actually causing transactions to pause or I think again, in other markets kind of like that, that would be something that would be that would be reducing that speed of transaction. Yeah.
Nick
Yeah. I think it's a great, great call out and I think it's exactly, you know, one of the points here that illustrates the title of this whole whole survey, it kind of is mismatched expectations, mismatched market where it's not not really just mismatched expectations between buyers and sellers. It's mismatched kind of fact or what consumers are telling us and what they're actually doing.
Nick
So people are hoarding. They have concerns about affordability, obviously interest rates, yet they're still transacting. And I think more than anything that speaks to really one thing and it's inventory. The fact that we're dealing with inventory levels from from, you know, not seen since 2004, I think is is the year we mentioned here, just that in most markets you're dealing with lower demand.
Nick
You certainly have decreased buyer demand just because of interest rates. Some folks have simply been priced out of the market. Yeah, the only thing beating that decrease in demand is the decrease in inventory. So no matter how few buyers you have, they're still chasing fewer and fewer homes. So that that unfortunately, it creates a world where homeless portability can be a concern.
Nick
But doesn't change reality if if there's still two buyers chasing one seller. You know I loved when you when you opened you talked about what a what a true seller's market looks like where there was this idea where you could put your home on the market and just say everything you want. And actually used a similar phrase in a conversation last week where it was almost like a demand letter.
Nick
You would go to the market and you you'd publish your demand letter during your highest and best, and you say, These are the things I want. This is the closing date, this is the money down. This is the lender I want you to use. And this is exactly how you're going to close and what you're going to ask for in your inspections.
Nick
I've definitely seen a step back from that type. So I think we're kind of in this transition period where the sellers who used to be able to do that, or the agents who used to be able to guide their customers to say, publish your demand letter when we do your highest and best, you're not encouraging that kind of activity anymore.
Nick
Yet they are still going to market in most cases if they have, you know, well-priced home in relatively good condition, they still are expecting multiple bids. They're just aware that it's not going to be quite what it was. So we're still in this mode where people are expecting because there are so few of their neighbors on the market, that these buyers are going to have to overlook the concerns about the home affordability and the interest rates on their.
Nick
Is that.
Kevin
Good? I think what's interesting is it's like this captured thing because people who are choosing to transact now on either side, buyer or seller are probably doing it because there is a innate need or prompting of circumstance that that, you know, I was just reading on another article today about the fact that, you know, builders in my world, you know, their concession amounts have been higher.
Kevin
Someone just recently, one of the public builders just now said that like 9% on average are giving away 9% of their their prices on incentives. Well, if someone is choosing to sell their existing used home in this market, they're probably doing so because there is a reason. So like the arguments being made that builders find the market faster because they have to sell all the time no matter what and the used market doesn't have to.
Kevin
But the sellers in today's market are probably selling because there is something that makes it. I have to situation. It's not going to be all the time, but it's more so to me. The analogy is I love analogies Nick is if if I invited my wife to go out for a steak dinner knowing that she likes steak and I say the words, we are going to go get a nice steak dinner at a nice restaurant.
Kevin
And then we show up at the restaurant. You know, the date had been made were there. And I look at the menu and I'm like, Oh, dang, steak is twice what it used to be. At that point. I can be frustrated and I can express concern about the affordability of steak, but like, we're getting steak, it's not like we're going to say, Hey, let's let's just leave the restaurant and go get Italian.
Kevin
Like, let's go ahead Olive Garden. So I just think that that whole and it's important for for our audience as builders and developers understand that you are going to get questions and objections and concerns around affordability, and you do need to be ready to speak to those. But also you don't have to have kind of an initial response of, Oh my gosh, I must be overpriced or overcharging.
Kevin
Because again, kind of what you spoke to, a nuance there was demand might be low, but suppliers to lower in most cases. All right. Moving on to a weak economy, 60% of people worry about the weak economy. Is it weak? Is this just this is future projection, obviously, of the fact that it feels like things must get worse.
Kevin
But everyone's been talking about this is, you know, the recession that has been the most anticipated recession of all time. That still hasn't happened yet.
Nick
Yeah, you know, I myself am confused. I don't know if the recession happened is happening today or is happening tomorrow. All I know is that it's in every headline that I read. And I think that is basically what most Americans experience as well. Yeah. You know, Jay Powell a few weeks ago talking about, you know, bypassing a recession.
Nick
We have a bunch of different data points that would indicate that it is a healthy economy. Obviously, we see unemployment towards the bottom of this list. I don't think that's a coincidence given how relatively strong employment numbers have been. And I will say that in this subject in general, I always guide and counsel any real estate professionals or people in and around the industry that if you want to be successful in real estate and don't ever talk about politics, just look at approach on the sales side.
Nick
And I think that as you get into the economy, you know, these things become a bit political in that someone's always to blame for whatever the current economy is. So I think the reality is that we're going to we're in a media cycle where we're always going to be talking about the economy, how it could be better, what are the warning signs those kind of headlines get?
Kevin
I think the benefit is that generally people can be concerned. I think both home affordability and economy fall into the same place of I'm worried. I'm really worried about it in air quotes, but not in my own personal situation. Like, yeah, I feel like the economy must be getting worse or headed in that direction. But I just got a raise.
Kevin
I just got approved to work from home. I just, you know, it's like, but it's for everyone else to worry about. And at the end of the day, the people who are choosing to transact in this market, they have concerns about those things, but they also either feel like they may not apply. And that's just that's like human nature.
Nick
Yeah, I think that that that is right on. And I think the reality is that for people that have been looking for homes, given how difficult it's been to find a home over the last few years with inventory, you have a lot of buyers that have been at the search for quite a while. So they're prepared. They have gone through the process you have to go through with a lender.
Nick
Obviously, the borrowing requirements are a lot different than they were during the, you know, the years leading into the great financial crisis. So, you know, you have informed consumers, despite the increases in rates that feel some sense of security and they're getting educated on on what's required to actually buy a home. So I think what you said is, is mirrors a lot of what I'm hearing from agents and that the overall state of the economy, you know, whatever people may think about individual buyers, you know, they're going into these purchases despite the increase in interest rates with, you know, strong savings and a plan.
Nick
And they looked at 500 houses. So they generally have a sense of of where they think the value is. And there's a bit of confidence on that side.
Kevin
Yeah. And so like you said, even it's still a on the balance of seller's market. But even in this market, it seems like they still want the same three things that sellers have always wanted. And the research calls us out. 87% of sellers say the certainty of an offer not following through. So certainty, 74% of sellers want to sell as fast as possible.
Kevin
They want speed, and 58% of sellers say that receiving a cash offer is important to them. So certainty, speed in cash sounds like what sellers have always wanted and always will want it does.
Nick
I mean, also a bit of a plug for for opendoor. It's it's it's kind of the basis of what we try to do. But I mean, that's no coincidence, obviously, in that, you know, we're looking to deliver exactly what what consumers consumers want. I do think, you know, along those lines, one of the trends that we've we've mentioned in this article is that we have seen fall through rates increase, I think 18% currently sales are falling through and that's that's up to the second highest percentage since 2014, I believe.
Nick
So it's becoming an increasingly real, you know, problem in the industry. My wife's in the residential lending space and, you know, someone qualifying, you know, at a five and a half or 6% rate. And then when that rate goes 2 to 7% can be the difference between someone, you know, losing qualification. Different things can happen during deals. And, you know, we are seeing some of the hesitancy show up in the way people are acting during transactions.
Nick
So at the end of the day, you know, despite it feeling like it's it's a good seller's market for many sellers but in uncertainty in the world that we're seeing show up in the data here around concerns around interest rates and the economy and all that, it is showing up in people backing out of transactions and it is obviously in sellers mind.
Nick
So being able to deliver, you know, the certainty and the speed and cash that that open door can just to have it as an option on the table. I spend 99% of my my time with my team talking to agents about having this option. You know, sellers are going to consider a lot of different things. But knowing that in this kind of uncertain market, having having that cash offer, which is what we try to be for agents, you know, you have this cash buyer, at the end of the day who will execute the same as obviously, you know, I know you've had some of my colleagues on to talk about the homebuilding side, how and
Nick
how important that can be. You know, even in this market where inventory is low, having continued contingency, you know, to buy one of those homes obviously can be nearly impossible. So Right. Continues to be true, continues to be something that we really try to try to push. And, you know, I think this will become increasingly important as we continue to move towards, you know, this uncertain period of time.
Nick
I don't know what's going to happen in the future. Obviously, I think a lot of people have been has been wrong about where the real estate market is headed over the last few years. But you have to imagine, as this business tends to be cyclical, there will be some more movement, you know, to to reach some kind of equilibrium.
Nick
And during that time, I imagine these demand from seller is going to become more important.
Kevin
And then equilibrium is found by buyers and sellers making concessions, in fact, finding the market one one transaction at a time. Ultimately in the data here says that both prospective sellers, 76% and buyers 80% indicate a willingness to make concessions to expedite the process. So again, it's this idea of buyer sellers, market. We're going to have to make some concessions in order to make things move forward.
Kevin
So this is, again, where you're you're both your background and your current position really lets you talk in depth on this particular topic. So before we get to kind of the current data points, how have concessions evolved over the years? Would you say?
Nick
Yeah, and that's the real the real meat of this survey. You know, concessions don't always show up in the numbers, right? You know, the popular headline is always purchase price. People think about their real estate deal. The thing that stands out is what you pay for or concessions are are one of those things that kind of exists in the background where they're not always quantified on the settlement statement.
Nick
They don't always show up that the seller was willing to to leave a an old Volvo in the driveway to get a deal done has actually happened to the neighbor of mine. So they're kind of that unspoken in some ways. Part of the deal and a reason why we really wanted to survey our audience on this was because you don't always see it show up.
Nick
And I think that concessions when you start to see people do different things on concessions and get more active on the seller side, that is a tipping point that shows you moving from from one market to another. So as we discussed, we are by no means, you know, moving towards this this robust buyer's market. But as we move a bit from extreme seller to like moderate seller market, we're starting to see at least a willingness on the seller side and buyers and of course, to align on concessions.
Nick
So, you know, we mentioned, you know, what they are these are the components that basically get deals done. It is where, in my opinion, from working with real estate agents for four years, it is an area where I see the best experienced agents really outshine their competition in terms of creativity and really just general awareness on telling their customers, you know, what can actually happen here.
Nick
Because again, if you come into a transaction, you're thinking, well, I got to pay this amount and it's going to cost me this much money per month, and these are my taxes. But, you know, if you're in the industry and an expert in the industry, like many of the real estate agents I work with, you know, you are advising your client on all the different moving parts, whether it's a closing date or getting help with, you know, rate rain by downs and the different components, different ways that you can make concessions as a seller or as a buyer to really bring a deal together.
Nick
And I think that's what we're we're starting to see in the survey shows and you mentioned the 76% and 80% of buyers and sellers willing to incorporate some concessions shows a general alignment. And I think the thing that I hear the most, and this is more qualitative and quantitative, but it backs up that point is that 72% of sellers are buyers right now as well.
Nick
So you can have the best time ever selling, put your house in the market and get a ton of offers. But if you're going to buy the next home, you're going to deal with the same set of problems that every buyer is facing right now, including the 7% point mortgage rate. So I'm not going to sit here and say that sellers are deeply sympathetic or are ever going to feel bad about getting 50% more than they paid for their home five years ago or ten years ago.
Nick
When you're selling, you're probably going to get the best deal you can. But I will say that there's a general awareness around, wow, this young family is now dealing with a rate that was triple what they could before. I'm going to have to deal with that as well. When I want to move, I'm going to have to deal with all of the things that they're dealing with.
Nick
So it's kind of recognition of how tough it is. And that showed up at the top in our kind of alignment piece where where this is one thing that buyers and sellers agree on that even the sellers are saying, yeah, it's it's overpriced. Like I see it, it is a very overpriced mark.
Kevin
I think even the top the top one here on your list on flexibility and closing date makes complete sense. And my, my hunch would be that this has been at that top really ever since the COVID epidemic began, because everyone, you know, when it was a completely a seller's market for sure, this most likely would have gone away of like just figure it out.
Kevin
I don't care. But now that we're back in this more balanced market, that everyone understands that just making dates align is really, really tough. I also just anecdotally, my own experience and people I know, it seems like when you close and when you take possession are also often two different dates in today's world, a lot more flexibility of hey, you can you can remain in the home for a period of time after the closing occurs or rent back or, you know, a lot more flexibility on timing.
Nick
Yeah. The only difficult part about doing a chat with you, Kevin, is that you take a lot of take a lot of my my headlines that's exactly the point I was going to make that I think which which I appreciate you know you're you're an expert so it's nice to us to realize that, you know. Yes, that's exactly right.
Nick
Exactly where I was going to go. But again, for for agents that we talk to and for our consumers, there is a general awareness at that point. You know, it's usually like, well, I'm closing this date, the deal's funding. I better move in that day. But there's a ton of flexibility. And this is what we're seeing, you know, with many of the agents that I talk to, it is just detaching those two things.
Nick
The deal may close this day, but I may be getting, you know, three weeks of a lease back so I can stay in my home or, you know, I may be moving in early or there's all these different things I haven't heard of a really extreme example from a very fortunate real estate agent who is doing quite well and has a second home down down the beach and she was actually able to she she was representing buyers, but the seller wanted to stay on the property until they're closing date.
Nick
The buyer wanted to get into do work, so the seller had nowhere to go for another three weeks. But that agent was actually able to use her summer home to give it to the seller for free, to basically allow her buyers to start the work. So they closed up front. Seller had a place to stay, which wasn't their relative's house, but, you know, extreme an extreme example, a fortunate position to be in.
Nick
But I'm hearing people basically make deals like that. And I agree with you and I've covered this this kind of concession has become popular. And I think it's a good thing for just customers to be aware enough. I think overall in the concessions piece, another thing that I hear from agents a lot recently is, you know, you mentioned home builders and different things they're doing and that 9% figure.
Nick
The thing that I hear from agents with new construction being an increasingly large part of invisible available inventory inventory, is that on the resale on a used market, they're competing now with with those concessions. So whereas, you know, in the seller's markets of the past, you didn't have to go to market with a bunch of concessions, you didn't have to list on the MLS, you know, get a $5,000 closing cost credit.
Nick
I don't think we're at that point yet, but I'm hearing from agents that they're being a lot more proactive in advising their sellers to possibly play a role in a rate buy down. Now, obviously, that looks a lot different from from, you know, a new built where you can advertise that on the banner at the front door, the new sales office.
Nick
But we're hearing that a lot more that agents are trying to educate the sellers to be a little bit more proactive. And even if it means that they're going to net that same strong purchase price just as a way to get buyers more comfortable with, you know, getting that that rate down a quarter or an eighth of a point.
Nick
Anything they can do to kind of just create more goodwill on that transaction Because again, there's just a general sense of, yeah, it's tough to transact right now. And if you're doing so, it's like you said before, you're doing something because you need to.
Kevin
Yeah, well I think a couple of things there. One is your point is is really insightful that even a lot of shoppers and sellers don't understand how common this concession is in terms of flexibility. And so when you're dealing with an uncertain consumer on either side of the transaction, it's important somehow to to communicate this with. And that's obviously where the experts have to come in.
Kevin
And how do you communicate that without kind of starting out with desperation? Not at the beginning, but you can imagine hundreds of consumers saying no way, honey. We we got to make sure that the data lines up because think about all the stress in the and the domino of other things that have to be lined up and really know that that doesn't have to be.
Kevin
But unless you help them understand that that that possibility exists, that uncertainty is is really high. So like how how you kind of remove the veil on that is important for both buyers and sellers under understanding and and if they have representation that's communicated. But the other thing that I think is real interesting is as a seller, when you add the 18% cancellation rate of transactions and then you start talking about this, a lot of flexibility that you're offering to the buyer on timing, that does seem to be a little bit like you are adding risk to the equation.
Kevin
I'm I don't know if I'm saying this well, Nick, but and I'm trying to find out a way to make it not sound like a blatant advertisement for Opendoor. But my point would just be like knowing that 18% of transactions are falling through and then delaying and delaying and delaying a closing date for a buyer that might not close, It does seem like that's a riskier bet and something that certainly should be factored into.
Kevin
Do I should I take this offer from Opendoor that has, you know, certainty, speed and cash versus saying, hey, I'll take this this offer from from someone else, but I'll delay the closing for three months and then two months in and they say, sorry, we're not we're not doing it.
Nick
I mean, I, I can can disagree with you and I understand why I could feel like a bit of an advertisement. But, you know, that is one of the primary value props. And I think specifically and also for for a big chunk of your audience, obviously on the other side, that unique offering that we have for our homebuilder partners of of nine months of close of escrow and basically must say that.
Kevin
Again because I still I'm amazed by the number of people I interact with who are like they don't they have not heard this or it never registered to them.
Nick
Yeah. Just recognizing, you know, the partnerships and the the use case that we have on the homebuilder side. And this is not my world. This is a nod to my my, my colleagues on the home other side that I work very closely with. Obviously, many, many homebuilders are working with agents. So it's all it's all related. I don't want agents to know this, do that.
Nick
And then when I went off consumer selling to open door and buying from one of our homebuilder partners or any new construction made from a homebuilder, they are eligible for up to nine months for their tools. The best girl with basically unlimited flexibility on when they're going to pick that date and how often they need to move it, which obviously your audience doesn't doesn't need me to explain.
Nick
It is tremendously valuable in that whether it's a close date, getting pushed out for for a construction delay or whatever it may be, having that flexibility for the reasons that you just articulated around falling through, you know, you're under contract with a traditional buyer of your own home and their financing changes. You know, you're out of luck. On the other side there.
Nick
So that is a massive, massive value prop. You know, we recognize how necessary it is when you're in that situation and, you know, versions of that exists. Obviously, the flexibility around the closing date for for all consumers. So when we work as agents, I think it's one of the most difficult things for us to explain to our agent partners when they talk about a closing date.
Nick
We show them a calendar and a product and we say pick the date, you know, and they're dealing with a 60 day window, but they can pick Tuesday. They could change the next day to Wednesday. And having the ability to have this cash buyer of Opendoor who can execute the closing on the day that the seller needs to is tremendously valuable.
Nick
And also, you know, recognition that we're going to close. We don't have to, you know, go go borrow our money the way a traditional buyer what it's going to close. And we say it's going to close. And yeah, I think if I had the ability to convey what you just conveyed around the risk of fall through and how much that can cost, if we could do that succinctly upfront, I think everyone in the world may look at the opportunity in more favorably.
Nick
But but that's my mission to spread that word. And, you know, I recognize there's a lot of different ways to buy and sell on the world, but that is obviously a massive, massive benefit of working with Opendoor.
Kevin
All right. My last question is, do you feel like this openness towards concessions is the new normal that we're in for a while or you know, what? What are you hearing and seeing kind of on the front lines right now when it comes to buyer and seller concessions?
Nick
Yeah, You know, my my, my colleagues are starting to make fun of me for saying this because I reference it so often. But I got to get my my father, my my original mentor in real estate a shout just one of the earliest lines I've I've heard him say since probably the nineties when I started paying attention to what he was doing.
Nick
And I was a young kid then, but he'd always say, and this is going back to the nineties, my crystal ball is in the shop now. Now I'm a dad and I'm saying the same cheesy stuff, but it is the truth. You know, my crystal ball has been in the shop for as long as his had. It's very difficult to say, you know, where the world is headed.
Nick
I'm not an economist. Everyone I talk to in the industry now says these times are unprecedented. They haven't seen them before. And, you know, real estate folks, they love to say, oh, I've seen this before, but this one feels especially new when I can say being in the industry. I mentioned this earlier. The thing to me that separates the great agents, the that are always doing a ton of transactions and the same is true for sales associates.
Nick
And in the new construction offices I go to is that they are open to negotiating concessions are always a part of their business in good markets, down markets you know giving people how were the market is just mean if it's buyer or seller giving both counterparties a sense of many victories is just a really smart strategy and hire conducting your business.
Nick
So you know if the market continues to shift, if we get into a world where, you know, inventory starts to come back and we get a little more balance, you know, I see obviously where concessions appear in a transaction either upfront on the seller's MLS listing or on closing day. You know, that kind of shifts around a timeline of when they're used, either keep a deal together or attract new business.
Nick
Sellers are certainly calling the shots today, so that means concessions are happening, but happening further on down the process. And, you know, I just stay with that theme of not sure what's going to happen in the market, but smart folks are continuing to deploy them in every situation and and just making sure their customers are aware of all of these different moving parts that go beyond just the purchase price.
Kevin
I'm going to say something that sounds like it might be an extreme statement, but I really I don't know. I don't think it is. I think tip to me the fact that both sides are open to concessions. I don't know this has ever been plotted on a on a chart, but makes me feel like the market is more balanced than most people would think.
Kevin
It's another way of just saying what we've kind of said a couple of different ways on on today's show, Nick, But like, you know, a savagely unhealthy market and one extreme would be again, where we're one side is like, nope, I don't need to make concessions because it's a buyer's market or it's a seller's market. And so the the volume of transactions, especially in the agent world, feels highly unhealthy.
Kevin
But when I look at outside of the number of transactions as a as a data point, I think both sides are willing to make concessions then then it's maybe a more healthy market than a lot of people would say from the outside.
Nick
I think it's a reasonable conclusion. And I think that's why and I encourage all your listeners to check out this survey and the resulting blog and the research we've done around it. Just just going back to that point of we see a lot of headlines. We know, you know, the popular headline around price growth and going to being generally a seller's market.
Nick
But these concessions and the reason why we were so interested in it and the data here is exactly that point that but maybe it isn't exactly as it looks in the headlines, maybe there's stuff going on below the headline, but behind the scenes that shows that buyers and sellers are are getting together and compromising a little bit more than, you know, the headline would lead you to believe.
Nick
So yeah, I like the conclusion.
Kevin
So awesome. Well, Nick, thanks for coming on and thanks to the whole Opendoor team for, for doing research like this and sharing it openly. Always good to have more insights, especially from people who have both the number of transactions and consumers. The interaction with but but also just the general industry connections to to hear what's what's going on on the ground floor.
Nick
Awesome. Thanks for having us, Kevin.
