[Transcript + Audio] Opendoor CEO Carrie Wheeler at Goldman Sachs Communacopia & Technology Conference, Sept 9th 2023

Transcript 

Michael Ng

Welcome to the Opendoor presentation at the Goldman Sachs Communacopia and Technology Conference. I have the privilege of introducing Carrie Wheeler, CEO of Opendoor Technologies. She served as CFO for Opendoor for 2 years before being appointed as CEO in December of 2022. Before joining Opendoor, she was a Partner and Head of Retail and Consumer Investing at TPG Capital.

My name is Mike Ng, and I cover Opendoor and real estate technology here at Goldman. We have about 35 minutes for today's presentation, inclusive of audience Q&A. So if you have a question at any time during the conference, feel free to raise your hand, and we'll get a mic runner over to you.

First, Carrie, thank you so much for making yourself available today. It's really a privilege to have you here.

Carrie Wheeler

Thank you for having me.

Michael Ng

So Opendoor is the leading iBuyer in the United States. Only about 1% of U.S. residential real estate transactions occur online today. So to start things off, could you talk about Opendoor's strategy to drive the digitization of U.S. residential real estate? How is OPEN helping to reduce the complexity and uncertainty that's in the traditional home sales process?

Carrie Wheeler

Yes. If you think about U.S. residential real estate, it's one of the, by far, the largest asset classes out there, and yet it's probably the last one to be really seeing any meaningful disruption for digital innovation. And our vision is to create a market-leading e-commerce platform for residential real estate so that customers can transact with a whole lot of certainty and simplicity and ease that they can't get through the traditional process.

So you mentioned 1% online. That means 99% of home sellers today start the process the traditional way. They find an agent, they spruce up their home for sale. They do all those repairs on spec. They list it, they endure open houses. Hopefully, they go into contract. Hopefully, they find a buyer. That in itself is bad. That's no fun.

But 1 on 4 of those transactions actually fall through. Most people don't realize that. So you got to start the whole thing all over again. And for about 2/3 of sellers, they're also aspiring home buyers. And so they've got to figure out how do I put those 2 transactions together? Most people can't afford a double mortgage or a double move. So it's a really windy, uncertain, stressful process.

And our vision is to just take all those friction and pain points out of it, put the process online and allow people to transact again with certainty, simplicity and ease. And what we've had to do over the last 10 years is build the pricing system, the transaction system, the operating platform to allow people to do that.

The net result, though, has been a product that people love. I mean, customers love it. When they get our product and they transact that way, our Net Promoter Score is like 80, which is fantastic. Thinking of the guys again, we're fighting against a traditional process that's not so great.

So that's really the vision of what we're building over time. Today, we're the -- by far, the only player that can do this at scale for people, and we think we have incredible market fit. And ideally, over time, 2 years from now, we'll be sitting here and it will be as easy to sell your home as it is to hail your cab or order your groceries online.

Michael Ng

Great. And I think it's clear that the home buying and selling process is probably one of the few industries that have yet to be disrupted by digitization, Internet still. There clearly are some secular tailwinds there. But there are also some cyclical elements just operating in the U.S. housing market.

So can you just talk a little bit about how the current macro environment is affecting Opendoor? How has the rise in home prices in 2021 and then the subsequent normalization impact it opens ability to operate? Where are we in the recovery for OPEN in that respect?

Carrie Wheeler

Yes. I mean, I'm sure everyone in this room knows, it's been a tumultuous time, right, in the housing market, certainly, over the last year, and we've been in the middle of navigating that. And really, our playbook in response to that has just been to really manage our risk. Number one, first order of business was to make sure that we were selling down what we call the old book of inventory as quickly and efficiently as possible. And good news is that's pretty much done. 99% of that is behind us.

Two is just build into a new book of inventory over time with much more attractive margins that were more appropriately priced in this environment. Three was to reduce cost. We have taken a significant amount of our cost structure. We took cost down by 50%. I'm sure we'll talk about that later. And then four was really to reflect, frankly, on the lessons learned in 2022 as we think about how do we want to manage this business going forward and what are the appropriate risk guard rails we want to put in it in light of all the macro volatility.

So listen, 2022 coming into this year has not been easy. I think, though, when we look back at this time period and we say this internally, we're going to exit much better for it. We're going to be a better business. We're going to be leaner. We've really focused on refining our execution, focusing on what we can control, taking costs out, improving price accuracy. And we're set up, really, I think having come through this period. We're kind of through the worst of it, and we kind of ahead of all that by now. And looking forward to 2024, we're in good shape, I think, to start to rescale volumes.

Michael Ng

That's great. Against the backdrop of more limited housing inventory and some continued uncertainty in pricing, I was just wondering if you could talk a little bit about Opendoor's home purchase philosophy and how that may be different relative to years past?

Carrie Wheeler

Yes. I would say, our home purchasing philosophy hasn't changed. What has changed is our risk posture and how we reflect that. And it really manifests itself in how we think about our spreads. And for us, when we say spreads, it's another way of saying, like, what is the discount by which we are buying that home. And we use that to moderate for risk and adjust for risk.

If you think about our spreads, the components are, what is the margin target we want to achieve, what are the costs or holding costs and selling costs and how accurately can we price that home. We're in control of all those components. What we are not in control of is once we own that home, is that home going to appreciate on our watch? Or is it going to depreciate? And those are really the factors we've been most focused on as of late, given macro volatility.

So you mentioned home prices. By far and away, like the biggest volume driver for our business is where spreads sit. And home prices are a key input to that, given that -- those building blocks I just mentioned. And when home prices are volatile, spreads are going to widen, right? So we've been operating with elevated spreads. They were record levels late last year. They've come down significantly. We'll continue to take them down through the balance of the year and sort of in Q4.

But that home price volatility is tough, right? And we have to reflect that from a risk standpoint and how we're pricing these assets. And you've seen that show up when our spreads widen. That means our offers are less competitive. That means fewer people say yes to us. We convert lower. We have lower volumes. So we want home pricing stability. Good news is, I think, we're starting -- we've been seeing that for a while now.

The other piece of the equation that you mentioned was what's going with the market volumes. And there's a lot of focus and there's a lot of attention on like people are moving, the rate loss phenomena, I can't give out my 3.5% mortgage, don't blame them. But for us, that's not really the constraint.

We are a very small piece of what is this enormous market still. And so long as we can offer to people something for their home with a lower spread, that is really the driver for volumes for us. The market volume factor is really not the headwind, not when we're like buying some 1% share of the market.

Michael Ng

Great. That's super interesting. So what are you looking at to see when it's appropriate to further narrow those spreads and increase that acquisition pace over time? And is there a target home inventory balance that you manage to? And how do you think about that over the next couple of years?

Carrie Wheeler

Yes. When we talked about in our last quarter, right now, we're pacing at around 1,000 home acquisitions per month. And that we didn't foresee that to change meaningfully and go higher through the balance of the year. And the reason for that is we don't see spreads moving much. And the reason for that is because we are still forecasting for the back half of the year that home prices are going to be modestly negative month-to-month.

And that's pretty consistent with, frankly, with home seasonality. That's what home prices typically do in the back half of the year. But we're pricing that in today. So that's going to be a headwind to compressing spreads. However, by the time we get into Q4, and we're looking into the first part of next year, again, from a home seasonalities perspective, that turns into a tailwind, and we should be able to compress spreads on the back of that.

So as we think about going from 1,000 home acquisitions per month, how do we double those? And then the doubling for us is like where we get back to breakeven. One is compressing spreads, and we'll be able to do that starting in Q4 on the back of home seasonality. We've also made really good progress on improving our home price accuracy and taking costs out of the system. That will also help us reduce spreads. So that's one.

When our spreads are elevated, our paid marketing is less efficient. And so we have been taking down our paid marketing meaningfully this year, down 80%. But again, as we start to compress spreads, that means paid marketing becomes more efficient, we start to turn that back on. So you'll see that come back in the system in the first part of next year.

And then the third part, it would just be around partnerships, which, hopefully, we'll talk about a little bit today. That's a big part of our strategy. But just driving more volume through our partnership channels, agents, homebuilders and online real estate portals, and so again, if we're more efficient on the spread side, those channels, frankly, are also more efficient for us. So all those 3 reasons.

We peaked at around 5,000, 6,000 home acquisitions per month. So for us, the notion of going from 1,000 to 2,200 is fine. We feel very comfortable with that target, and that takes us back to the breakeven level.

Michael Ng

Great. And you talked about how narrowing spreads could help improve conversion. But I was wondering also if you could just comment on the value of the Opendoor brand, right, and how that brand has helped to drive traffic into the top of funnel and some of the efforts that you're making there. Because that seems like a more durable benefit over time, particularly as you spend a lot of time operating in a specific market.

Carrie Wheeler

Yes. I mean it shows up when you look at awareness over time and you look at it by market. It sounds kind of tried to say just give us some more time, but actually time actually does seed awareness, time and scale. So as we have gotten to be bigger, now in 53 markets, our ability to market nationwide is much more efficient. And to build a brand and do creative and all that stuff is way more efficient than it would have been, say, 2 years ago when we were more restricted in what we could spend, and we're doing it on a local level.

So listen, we aspire to be a verb. We want everyone to start their home process with Opendoor to be very top of mind. But as we've been in markets for longer, we've seen awareness increase and that does actually frankly drive some conversion for us, too, and we want to be more top of mind.

Michael Ng

Right. I'm sure your market share is well above 1% in some of your most mature markets.

Carrie Wheeler

It is. You know if you -- we published, I think, in the last shareholder letter. But if you go look at last year, there are markets we've been in, say, 6, 7, 8 years, and that was a 4% market share last year. We have relatively younger markets that we opened in 2021, and that was at 70 basis points. And so just, again, with time and maturity and awareness, we're able to kind of build into share. Part of that is brand awareness. People just understanding that this is an option. And part of it also is building this retention of customers who will be coming to us over time.

You may not be a true seller today. You do want to understand the value of your home. We're going to keep you in our system. We're going to engage with you. We're going to talk to you. In those markets with 4% share, we've had as much as 40% of the homeowners in that market come to us, give us their address, tell us about their home. But those younger markets, say, 20% of those customers. So again, having that retained base of customers continue to drive future contract volumes is also another driver of growth.

Michael Ng

Right. The value just compounds over time.

Carrie Wheeler

Yes.

Michael Ng

Maybe shifting gears a little bit and talking about financials. So Opendoor has a goal of achieving adjusted net income profitability by 2024. Are you on track to achieve that? What are the actions that you're taking to make progress toward that goal? And what conditions are you assuming in the housing market to hit that target?

Carrie Wheeler

We're entirely focused on getting back to breakeven. We want to be back to a position where we're self-sustaining, right? And then we can decide from there how fast you grow, what else you invest in. But getting back to, for us, what we call adjusted net income positive is the goal for next year. And the entire org is geared to that goal.

What do we have to do to do that? One is let's just make 1 caveat that the macro can't go way backwards, okay? So a relatively stable environment we're kind of in right now from a home pricing standpoint. I made my comment about market volumes already. They can still be depressed, and that's not going to impact our ability to get back to that level.

We need to be at a $10 billion kind of steady-state revenue run rate to be at that level. And again, we need to double our volumes from where we are today, 1,000 home acquisitions per month, getting back to, say, 2,200. And we'll stay tight on cost and just continue to execute. And it's really not any more complicated than that. And as I said, the whole organization is pretty resolute, but that's what we're getting back to next year.

Michael Ng

That's great. And you have seen the improved profitability in some of your New York cohorts already, right? Unit economics improved last quarter with contribution margins on newly acquired homes reaching 10.6%. You also revised your contribution margin target to 5% to 7% in the past quarter.

What's been driving that growth? Is it the benefits from home price appreciation in some of these newly acquired cohorts, perhaps because of the widened spreads? Is it some of the adjacent services? What's the trajectory for contribution margins for the rest of the year? Yes.

Carrie Wheeler

Yes. Q3, can it come fast? Well, we're in it now, but it can't come fast enough when we get to talk about it because we know that that's the inflection point for us to get back to positive contribution margins. And that has everything to do with the transition away from the old book and back to basically the new book, a healthy new book of inventory, and that's showing up in the margins.

You mentioned the new book performing really well in Q2, 10.6% contribution. Two parts of that is we've continued to focus on better price accuracy and operating efficiencies. That showed up in the cohort. And the other piece of it was home price appreciation definitely outperformed our underwriting.

When we underwrote those homes, it was a moment of really peak uncertainty. We were careful in how we underwrote those homes. And HPA outperformed, and that shows up in the 10.6%. We do expect that, over the course of the year, we will get to our 5% to 7% target by Q4. And that's just a function of those cohorts selling through over time and back to our targets.

We did -- as you noted, we took our target margins up this year from the 4% to 6% annual target we've always talked about to 5% to 7%. And the reason for that was twofold. It was like, I guess, one was we should and two was we could.

We should because it speaks to having a more durable business, and we want to get back to breakeven on a cash flow basis. And two, we believe we could. We were very focused on this 100 basis points of incremental cost in 2023. We've got a big chunk of that. We'll get the rest of that. And that allowed us to take our margin targets up.

So we're very focused on like what can we do to improve the business in durable ways. And that will really allow us to raise our target margin.

Michael Ng

Great. Maybe working our way down past contribution margin, could you talk a little bit about Opendoor's current funding structure, the capacity, the cost of that? How has the funding environment and the risk of extending holding periods -- extended holding periods affected how you think about the optimal funding channel and mix and business model?

Carrie Wheeler

Yes. And we feel actually really good about our current funding structure, both today and going forward. If you kind of think about all the components, one, on the balance sheet side, we have about $1.6 billion of parent capital. And within that is $1.2 billion of unrestricted cash and a little under $300 million of equity invested at homes that, hopefully, over time, will turn into cash.

So we're well capitalized and just in terms of parent capital. And then on the debt side, we have about $2.5 billion of term loans that are fixed rate. We like where those are priced right now. And if you think about, again, back to this $10 billion steady-state revenue number, can you finance it, might be in your questions, and we turn our inventory 3 times a year just with those facilities alone, that gets us back to like that breakeven target.

We have another $5 billion of revolver capacity that we're not using right now, given that our inventory levels are low, but they're available to us. So as we really scale the business, as we grow, we can tap into those 2, should we need to. So we feel very, very good about our funding capacity.

We also feel very good about just the state room with our lenders. Our team has done a great job since really inception about building these lender relationships, being very purposeful about creating staggered and rolling maturities. We're diversified across 30 lenders. We wrote through COVID with them. They didn't blink. We've been through 2022 with them. They've been fine. And so we feel really good about how we're positioned.

Michael Ng

That's great. I was wondering if you could just talk about what your holding period looks like today? And how does that compare to your target holding period? Obviously, at the industry level, home sales velocity and volume has been lower than it was in 2021. So how do you think about the holding period? Yes.

Carrie Wheeler

Yes. It's interesting, like home market volumes are certainly down a lot, right? 4 million homes, plus or minus, right now trading, but still 4 million homes. But against the backdrop on your last year like 6 million, right, so they've come down a lot.

Well, what people don't talk maybe as much as that, actually, when I think about velocity, I think about like what is the rate by which homes are selling. And against that constrained supply and not much new listing inventory coming to the market, homes are actually selling really fast. If -- you do not have a home selling problem. The industry doesn't have a home selling problem.

Michael Ng

That's why the homebuilders are just doing so well.

Carrie Wheeler

Right. Well, even on the existing homes, like if you think about we track market clearance, and it's like how many homes that are listed go under contract every single day. And right now, in Q2, that was 3%. So 3% of every home that were listed, we're going to contract every single day.

If you look back over, say, 2016 to 2020, kind of normal times, right, I'll strip out '21, '22, that number would have been 1% to 2%. So actually, the velocity of transactions is very healthy. So we feel good about that. So again, the industry doesn't have like a, let's say, home selling problem. They kind of have an inventory problem. But against that backdrop of low inventory, homes are selling. There's still 4 million people moving.

Michael Ng

Great. You mentioned at the onset that you guys are doing a lot in terms of cost discipline and operating efficiencies. I think the annual run rate OpEx has gone from a peak of $800 million in 2Q '22 to about $400 million today. So just a tremendous amount of savings that you guys have been able to realize.

Could you talk a little bit more about your outlook for OpEx and where most of those cost efficiencies in last year were realized? Do you ever worry that you cut too much, cut the bone or -- or was that kind of very effective, like cost savings that you guys were able to bring out?

Carrie Wheeler

Yes, I think we did a lot, right? We went from $800 million to $400 million, as you said. That was a significant amount of retrenchment of costs. When we talk about OpEx, for us, it means it includes marketing, it includes variable SG&A that tends to be more tethered to volumes, it includes our fixed cost structure. And we went after all 3.

I'd say, today, we're -- we guided to Q3, we'll be at $100 million a quarter. That feels about right for where we're at right now. And then next year, as we get back to the $10 billion number, we've said like OpEx should be in the 4% to 5% of revenue range, so between $400 million to $500 million.

So it suggests that some of that will come back in the system, but certainly not all of it. I mean a lot of -- again, we've been very focused on when we cut costs, we want to do so in a durable way. Where did it come from? It came from a lot of headcount. We did have a significant reduction in force a lot against the more volume-driven side of our business.

And then, I would say, just a lot of good old-fashioned cost cutting. Here's an example. We didn't have a procurement -- a significant procurement effort, say, 18 months ago. We do now. And we just scrutinize everything. And when you go through 2022, you look at every line item. And we've done that, and I feel like a lot of that would stick.

Michael Ng

Great. I do want to talk about some of OPEN's initiatives beyond traditional iBuying. One is Opendoor Exclusives. You talked a little bit about some of the opportunities and variable SG&A. And I know that Exclusives, in some instances, can really help with that as well just because of the absence of buyers' commissions that need to be paid if you're helping to connect with an institutional investor. So maybe you could just describe Opendoor Exclusives in more detail, how important is it? What are the long-term plans there?

Carrie Wheeler

Yes. So if you think about our business today, we're an on-balance sheet business, right? You come to us, we buy the home, we take it on balance sheet. We're a dealer business. And the evolution of the business, if you look at the Series A pitch deck, to keep me honest, the grand mission was always, over time, to build the first-party business over time to basically create a marketplace business.

And what do you need to have a marketplace business? You need density. You need buyer liquidity. So we've done the first part pretty well. We'll continue to grow the first-party business.

But for us, Exclusives is basically fulfilling the broker side of the business. And how do we put buyers and sellers together in a way that is more capital-light, more capital-efficient and allows us to address more sellers, right? We won't turn anyone away because our spreads are unattractive. We want to be able to offer solutions to all sellers.

So if a seller comes to us, well, obviously, we're transacting with lots of buyers in the market, we should be able to match them up. We have gone after this right now in 1 market because we want to perfect it before we scale it. We're focused on Plano and surrounding areas.

Today, if someone comes to us and they get a cash offer and we ask if they would put their home in the marketplace and give us time to basically come up with offers that will beat our cash offer, that's great. We'll give you a buyer that we know is in the market looking for your 3-bedroom and 2-bath home, and we can give you an offer from a REIT. And if it's better, that's great for the seller.

That's what we're trying to build. It's going to take time, though. We're not doing it in a moment where I'd say the macro is necessarily a great tailwind, right? For all the reasons we talked about, sellers aren't really kind of coming out the woodwork quite yet. And so -- and we want to be deliberate about how we scale it.

So it will take some time, but it's something that we're focused on delivering over the long term. It's a perfect complement to our existing 1P business, and we should have it over time.

Michael Ng

Right. That's all super interesting. And you guys have done a great job building out that home seller density. Maybe you can just talk a little bit more about what you're doing on that prospective homebuyer side, from institutional buyers like REITs or single-family rentals or perhaps investors that want to do like a fix and flip or a short-term rental. Like what is that side of the equation?

Carrie Wheeler

In terms of us working with those -- that universe of buyers or us?

Michael Ng

Yes, that universe of buyers to allow you to drive a transaction in a more capital-efficient way where it's not the 1P transaction.

Carrie Wheeler

Well, it's interesting. If you think about building a marketplace, right, and just talk about you need a lot of buyer density, the good news is, there's like 60 REITs to go talk to. And we know all of them because we do business with the vast majority of them today. We've been doing that for many, many years, and we have great long-standing relationships.

So that piece of the marketplace is easier. And then the consumers you want, obviously, thousands and thousands, if not millions and millions of consumers, like individual consumers on the buyer side, harder to get, will come with time. But those relationships, they're really long-standing for us.

We have moments where maybe we can't fulfill a seller's valuation desires, but we can marry them with the REIT. And so we've been doing that for a long time.

Michael Ng

Great. I was wondering if you could talk a little bit about the progress that you're making in title and mortgage and any other adjacencies that you may be pursuing?

Carrie Wheeler

Yes. I love our title and mortgage business, particularly our title and escrow business. It is the little engine that could -- that we don't talk about so much. It is -- it attaches at well north of 80% on both sides of the transaction for us. We own it. It's vertically integrated. It's got amazing CSAT scores. And we'll continue to just invest in it from a technology standpoint.

Certainly, AI has a lot to offer in that business over time. It's still a relatively paper-intensive business that deserves to have some AI attached to it. So we'll continue, I think, to drive more profitability in that business over time. But it -- from an attach rate, it's pretty optimized actually. The team has done a really good job there.

We are further behind on mortgage. We fulfill that today through a partnership. And over time, though, I mean, medium term, I'd say, we really want to make sure that we are fulfilling more on the services side. But it really has not been, in '23, 2022, a core focus of ours.

Michael Ng

Sure. That's totally fair. I do want to leave time for audience questions. But before I open it up for Q&A, maybe I'll just sneak 1 more in. And it's one about market performance. What are some of the most attractive regions for iBuying today? As you think about growing the business, do you see opportunities to get deeper in your current markets or expand into other markets? Just how do you think about market expansion in the near to midterm?

Carrie Wheeler

Yes. I mean against this $2 trillion market we've been talking about today, when we define our buybox -- and by the way, buybox means what are the universal homes that you think you can underwrite with a reasonable level of accuracy. And for us, it's defined by price point. It could be year of the home, it could be a ZIP code. I mean there's all sorts of parameters that define our buybox.

But today, we can underwrite about $2 trillion, about 1/3. $650 billion is our addressable market in our existing footprint, our 53 markets. So we have a lot of headroom. We have a lot to go after. Even if we just focus on our existing footprint alone of the $650 billion, there's a lot to go get.

If you think about our earlier conversation around market share and we just focus on that $650 billion, and we can take every market to that 4% level, that's a $26 billion volume business. But certainly, over time, we want to continue to pursue additional buybox expansion, additional markets. We'd love nationwide coverage. We took a beat in '23 and 2022 for good reason. But I mean, again, as we get back in 2024, we'll start to kind of pursue those things again.

Michael Ng

Great. Any questions from the audience? Got 1 over here, please.

Audience Member

Just elaborate a little more on that slide you talked about. So like where do you win? And like what -- which customers is attractive for? And when you talked about the markets where you had like 4% share, but I think 40%, you said, would come and talk to you. Like why doesn't that convert at a higher rate?

Carrie Wheeler

Yes. I might forget some of those. So what kind of buyer comes to us, the first question. Honestly, they just look like the average American home seller. Like our average consumer is buying an average price point home. Average is varied a little bit by market, but we want to be at that part of the distribution curve that has the most liquidity, the most velocity.

They look a little bit younger. They're a little bit more double income and kids, probably a little more time start to meet our product more. They look pretty average, maybe, and that's it. They really look like they're not -- there's not some tail type of customer types. It's really like the average American home seller.

Audience Member

So why the 4% one?

Carrie Wheeler

Oh, so why the 4% share versus like the 40% have come to us over time? Listen, I think, first of all, a lot of people come to us and we're delighted, right? You come to us, you get a free cash offer, and you can understand the true value of your home. We do not sell that lead. We do not span and send you off to a bunch of realtors, but keeping you in our system, and we continue to just educate you about how your home values change over time.

And they engage very frequently with us. They want to know how to refresh their offer, what's happened to it. And that actually drove 70% of our contracts last quarter, people who had previously asked for an offer and then just reengaged with us over a subsequent period of time.

So I think it's just like that 40% to the 4% is curiosity, and like it's great. I mean the more people we can cover in the market is great for us. We'll convert them over time. We look at everyone as a future home seller, maybe not today but in the future.

Audience Member

Just to follow up on that question. The 40% that do check the prices, do you have a sense based on survey work or competitive survey or analyses what percentage of them actually end up selling their home and measure sort of conversion that way?

Like I imagine, especially in this environment, you're not losing to them selling to somebody else, right, like a competitor. It's probably they just didn't end up selling their home.

Carrie Wheeler

Yes. One of the things we talk about is what is a true seller. And the way we define a true seller is someone who actually is going to sell because we track if they don't take an offer from us that they requested, they actually sell elsewhere, which means they listed their home within 60 days.

So that's what we track to figure out where they went elsewhere and did our -- how did our offer compare and did we do better or worse than their expectations at the time. I can't quite correlate the 40% to the true seller numbers we see, but we do track that. Their alternative is that they don't take an offer from us. They either sit on it, and they don't do anything, right? We retain them in the system. Or they typically just list on the market.

Audience Member

So you mentioned before that you pulled back on marketing when the spread is wider as it is now. Is there like -- is there a spread at which you see a really big change in perception of the product and the offer, and you've sort of seen not as a buyer of last resort but as a facilitator of a friction reducer?

Carrie Wheeler

Yes. There's a -- without giving away all the secret sauce, there's a point on the curve where there's -- it's -- the buyer is very elastic, right? And so as we're able to kind of come down on spreads, and we see a lot more demand. And so the difference between -- yes, the answer -- short answer is yes. And we understand that curve really well because we've been doing it now for a decade. So we understand that relationship really well.

Michael Ng

Carrie, we have a follow-up over there.

Audience Member

Just 1 more question. In terms of the spreads, just where are you now in terms of capturing the full spread from the home seller versus alternative players in the industry like mortgage, title? Like back in the day, you guys used to talk about how you could have a deal with like Comcast or like DISH or somebody to monetize additional services so that the consumer would be paying less. Apologies, if you've talked about this, and I was just late, but would love an update there.

Carrie Wheeler

No, no. You got it. Yes. So that's all about like how much are we doing in terms of ancillary services, which we want more of today. It's really title and it's mortgage, and those provide an offset to spreads. So to the extent that, that title -- that transaction is coming with title, I can use that to reduce my spread. I can use it to -- if mortgage is coming, I can also reduce it.

So we're focused on those things over time. The road map over time is to be able to do all the things you talked about. I should be able to sell you home insurance, a warranty. I'd love to move you. I'm in your home and painting it already. I'd like to -- maybe I can personalize it for you. It doesn't have to be in shoji white. Maybe I can help you with the color of your choice.

So there's lots of things we can do on the ancillary side. But again, the watchword for '22, '23 has been focus. We're just going to focus on stabilizing the core business. That has worked out really well so far. So medium term, we want to get back to the services road map. It just hasn't been a core area of focus for us.

Michael Ng

Earlier in our discussion, you mentioned some of the partnerships, right? And you guys have expanded the Agent Access Program. You guys went live with a Zillow partnership in 25 markets. I was just wondering if you could talk about those in a little bit more detail and the strategic role that they play in your business?

Carrie Wheeler

Yes. We have a fantastic ecosystem of partnerships that are really important for 2 reasons. One is they allow us to just basically distribute to more customers. And two, we can do it in a way that's very attractive from a customer acquisition cost standpoint, because their economics are fixed. And as you said, it's across all 3 vectors.

So for homebuilders, we've been in relationships with them, 90 builders now for about 6 years, and that's a perfect trading customer for us, right? You're at the showroom on the weekend, you want to buy a new home, you have a home, you have to sell it, you're a contingent buyer, call Opendoor, we work hand in glove.We can unlock their equity number like in that moment, and we can line up the closing date. So that's a great relationship for us.

The other component is agents, which has been very successful for us. I think we said last quarter, we wouldn't break down the actual contribution from agents, but we're seeing massive repeat visits from agents. And we are creating these programs, like the Agent Access Program, to incentivize and reward agents who are doing repeat business. About half of them, frankly, who we worked with have done business with us prior.

The unlock with agents is that they really think about us as a tool. And I actually was sitting in this meeting with one of the major brokerages in the country, and they said something that was amazing, which is, as fiduciaries, our job is to avail our customer of all of our choices, right? And you're not doing your job, you don't show up with that -- at that meeting with an Opendoor offer, which might be their backstop. And this is what listing would look like and yada, yada, yada. That's music to our ears. So we view us as partners to agents, and we're just the tool that you'll get.

And then we've got the online real estate portals, Zillow, Redfin, Realtor. And again, this is about massively increasing our distribution. You mentioned Zillow. We have a really attractive partnership with them. It's early days. We're super excited about it. 25 markets now, and that's just if you're online and you're looking at real estate, like a lot of us do late at night and you're thinking about maybe you want to list your home and call an agent, pop Opendoor, you want a cash offer. So it's very synergistic. So again, it's about increasing the scope of distribution at a very attractive CAC for us.

Michael Ng

Great. Well, we're just about time. So that's an excellent way to wrap up this session. Carrie, thank you so much. Such a privilege to be able to host you here.

Carrie Wheeler

Yes, I appreciate it. Thank you very much.