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 two years before being appointed as CEO in December 2022. Before joining Opendoor, she was a partner and head of retail and consumer investing at TPG Capital. My name is Michael 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.
Yeah, thank you for having me.
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 Opendoor helping to reduce the complexity and uncertainty that's in the traditional home sales process?
Yeah. 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 from digital innovation. And our vision is to create the 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 one in four of those transactions obviously actually fall through. Most people don't realize that, so you gotta start that whole thing all over again. And for about two-thirds of sellers, they're also aspiring home buyers, and so they've got to figure out, "How do I put those two 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. Because, again, we're fighting against a traditional process that's not so great. So that's, 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, you know, a few years from now, we'll be sitting here, and it'll be as easy to sell your home as it is to hail your cab or, or your groceries online.
Right. And, you know, 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, you know, digitization, the internet still. There clearly are some secular tailwinds there, but there are also some cyclical elements just operating in the, in the U.S. housing market. So could you talk a little bit about how the current macro environment is affecting Opendoor? You know, how has the rise in home prices in 2021 and then the subsequent normalization impacted Open's ability to operate? Where are we in the recovery for Open in that respect?
Yeah. I mean, I'm sure everyone in this room knows it's been a, 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. Really, our playbook and response to that has just been to really manage for 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 the 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 costs. We have taken a significant amount of our cost structure. We took costs 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 wanna manage this business going forward, and what are the appropriate risk guardrails we wanna 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 gonna exit much better for it. We're gonna be a better business. We're gonna 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're kind of past all that by now and looking forward to 2024, and we're in good shape, I think, to start to rescale volumes.
That's great. Against the backdrop of, you know, 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, you know, be different relative to years past?
Yeah. 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, that'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, our 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, key input to that, given that those building blocks I just mentioned. And when home prices are volatile, spreads are gonna widen, right? So we've been operating with elevated spreads. They were at record levels late last year. They've come down significantly. We'll continue to take them down through the balance of the year and starting 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've been seeing that for a while now. The other piece of the equation that you mentioned was what's going with market volumes. And there's a lot of focus, and there's a lot of attention on, like, people aren't moving, the rate lock phenomenon. I can't give up 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, less than 1% share of the market.
Right. That's super interesting. So, you know, what are you looking at to see when it's appropriate to further, you know, narrow those spreads and increase that acquisition pace, you know, over time? And is there a target, you know, home inventory balance that you manage to... You know, how do you think about that over the next couple of years?
Yeah, when we talked about in our last quarter, right now we're pacing at around 1,000 home acquisitions per month, and 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 decompressing spreads.
However, by the time we get into Q4 and we're looking into the first part of next year, again, from a home seasonality 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 the doubling for us is like where we get back to break even. 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 home price accuracy and taking costs out of the system. That'll 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, 'cause a big part of our, our strategy, but just, just driving more volume through our partnership channels, agents, home builders, 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 three reasons.
You know, we peaked at around 5,000-6,000 home acquisitions per month. So for us, the notion of going from 1,000 to 200 is fine. We feel very comfortable with that target, and that takes us back to the break-even level.
Great. And you know, you talked about how narrowing spreads could help improve conversion. But I was wondering also if you could just comment on, you know, the value of the Opendoor brand, right? And, you know, how that brand has helped to drive, you know, traffic into the top of funnel, and some of the efforts that you're making there. Because, you know, that seems like a more, you know, durable benefit over time, particularly as, you know, you spend a lot of time operating in a specific market.
Yeah, I mean, it shows up when you look at, awareness over time and you look at it by market. It's, it sounds kind of trite to say, "Just give us some more time," but actually, time actually does seed awareness.
Right.
Time and scale. So as we have gotten to be bigger, now we're 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, two years ago, when we were more restricted in what we could spend and we were 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. So.
Right. I'm sure your market share is well above 1% in some of your most mature markets.
It is. You know, we published it, I think, in the last shareholder letter. But if you go look at last year, there are markets we've been in, say, you know, six, seven, eight years, and that was at 4% market share last year.
Right.
We have relatively younger markets that we opened in 2021, and that was at 70 basis points. 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've been coming to us over time. You may not be a true seller today. You do understand the value of your home, but we're gonna keep you in our system, we're gonna engage with you, we're gonna talk to you. In those markets with 4% share, we've had as much as 40% of the home owners 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.
Right. That value just compounds over time.
Yep.
Maybe shifting gears a little bit and talking about financials. So Opendoor has a goal of achieving adjusted net income profitability by 2024. You know, are you on track to achieve that? What are the actions that you're taking to make progress toward that goal? And, you know, what conditions are you assuming in the housing market to hit that target?
... We're entirely focused on getting back to breakeven. We wanna 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, we call it 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 that? One is, let's make one caveat, that the macro can't go way backwards, okay? So a relatively stable environment, which 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.
That's great. And, you know, you have seen the improved profitability in some of your newer 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%-7% in the past quarter. You know, what's been driving that growth? Is it the benefits from, you know, home price appreciation and some of these newly acquired cohorts, perhaps because of the widened spreads? Is it, you know, some of the adjacent services? You know, what's the trajectory for contribution margins-
Yeah.
For the rest of the year? Yeah.
Q3 can't come fast... Well, we're, we're in it now, but it can't come fast enough when we get to talk about it, 'cause 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%-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've noted, we took our target margins up this year from the 4%-6% annual target we've always talked about, to 5%-7%. And the reason for that was twofold, 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 wanna 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 really allowed us to raise our target margin.
Great. Maybe working our way down, past contribution margin, could you talk a little bit about, you know, Opendoor's current funding structure, the capacity, the cost of that? You know, how has the funding environment and, you know, the risk of extended holding periods affected how you think about the optimal funding channel and mix and business model?
Yeah, 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, you know, 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 home, that hopefully over time will turn into cash. So, we're well-capitalized in 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 three 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 rescale the business, as we grow, we can tap into those too, should we need to. So we feel very, very good about our funding capacity. We also feel very good about just the state we're in with our lenders. Our team's done a great job since really inception, about building these lender relationships, being very purposeful about creating staggered and ruling maturities. We're diversified across 30 lenders. We rode 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.
That's great. I was wondering if you could just talk about what your holding period looks like today, and, you know, 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, you know, in 2021. So you know, how do you think about the holding periods?
Yeah.
Yeah.
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 a backdrop, maybe last year, like six, right?
Right.
So they've come down a lot. But what people don't talk maybe as much, is 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. We do not have a home selling problem. The industry doesn't have a home selling problem.
That's what the home builders are doing so well.
Right. Well, even on the existing homes, like, if you think about, we track market clearance.
Yeah.
It's like, how many homes that are listed go under contract every single day? Right now, in Q2, that was 3%. So 3% of every homes that were listed were going to contract every single day. If you look back over, say, 2016 to 2020, kind of normal times, right? I'll strip out 2021, 2022, that number would have been 1%-2%. So actually, the velocity of transactions is very healthy. So we feel, we feel good about that. So, again, the industry doesn't have, like, a, necessarily a home selling problem. They kind of have an inventory problem, but against that, backed up a little inventory. Homes are selling. There's still 4 million people moving.
Great. You know, 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 2022 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 the last year were realized? You know, do you ever worry that, you know, you could cut too much, cut to the bone, or, or, you know, was that, you know, kind of very effective, like, cost savings that you guys were able to wring out?
Yeah, I think we did a lot, right? We went from 800 to 400, as you said. That was a significant amount of, of, you know, retrenchment of cost. We talk about OpEx, for us, it means, it includes marketing, it includes variable SG&A. That tends to be more tethered to volumes, and includes our fixed cost structure. And we went after all three. I'd say, today, we're, you know, as 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%-5% of revenue range. That would be $400 million-$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 sides of our business. And then I would say, just a lot of good old-fashioned cost cutting. You know, here's an example: We didn't have a significant procurement effort, you know, say, 18 months ago. We do now, and we just scrutinize everything. And when you go through a moment like 2022, you look at every line item, and we've done that, and I feel like a lot of that will stick.
Great. I do want to talk about some of Opendoor's initiatives beyond traditional iBuying. You know, one is Opendoor Exclusives. You talked a little bit about some of the opportunities in variable SG&A, and I know that exclusives in some instances can really help with that as well, just because of the absence of buyer's commissions that need to be paid if you're helping to connect-
Sure
... with an institutional investor. So, maybe you could just, you know, describe Opendoor Exclusives in more detail. How important is it? You know, what are the long-term plans there?
Yes. If you think about our business today, we're an on-balance sheet business, right? You come to us-
Right
... 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, but 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, you know, 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 don't want to turn anyone away because our spreads are unattractive. We want to be able to offer a solution to all sellers. So 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 one market because we want to perfect it before we scale it. We're focused on Plano and surrounding areas. Today, 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. Great, you know, we'll give you a buyer that we know is in the market looking for your three-bedroom, two-bath home.
Or maybe 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 gonna 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 of the woodwork quite yet. And so, and we want to be deliberate about how we scale it. So it'll 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 1 P business, and we should have it over time.
Right. You know, 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, you know, prospective home buyer side, from, you know, institutional buyers like REITs or single-family rentals, or perhaps investors that want to do, like, a fix and flip or, you know, a short-term rental. Like, what is that side of the equation?
In terms of us working with those, that universe of buyers-
Mm-hmm
... or us?
Yeah, that universe of buyers to allow you to, you know-
Yeah
... drive a transaction in a more capital-efficient way, where it's not a 1 P transaction.
Well, it's interesting, as you think about building a marketplace, right? I just talked about, you need a lot of buyer density.
Yeah.
The good news is there's, like, 60 REITs to go talk to.
Right.
And we know all of them because we do business with the vast, vast majority of them today. We've, we've been doing that for many, many years, and we have great long-standing relationships, that piece of the marketplace 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.
Right.
But those relationships, I mean, they're really long-standing for us. You know, we have moments where maybe we can't fulfill a seller's valuation desires, but we can marry them with a rate, and so we've been doing that for a long time.
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?
Yeah, 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 attaches at, you know, 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, I think, just invest in it from a technology standpoint. Certainly, AI has a lot to offer 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 from an attach rate, it's pretty optimized actually. The team's 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 wanna make sure that we are fulfilling more on the services side, but it really has not been, in 2023, 2022, a core focus of ours.
Sure, that's totally fair. I do wanna leave time for audience questions, but before I open it up for Q&A, maybe I'll just sneak one more in. And, you know, it's one about market performance. You know, what are some of the most attractive regions for iBuying today? You know, as you think about, you know, growing the business, do you see opportunities to get, you know, deeper in your current markets or expand into other markets? You know, just how do you think about market expansion in the, you know, near to midterm?
Yeah, I mean, against this, you know, $2 trillion market we've been talking about, today, when we define our buy box... And by the way, buy box means, you know, what are the universe of 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 buy box. But today, we can underwrite about $2 trillion, about a third. $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, and we can take every market to that 4% level, that's a $26 billion volume business. But certainly, over time, we wanna continue to pursue additional buy box expansion, additional markets. We'd love nationwide coverage. We took a beat in 2023, in 2022, for good reason. But, I mean, again, as we get back into 2024, we'll start to kind of pursue those things again.
Great. Any questions from the audience? Got one over here, please.
Can you just elaborate more on that buy box you talk about? So like, where do you win, and like, which customers does it attract you 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?
Yeah, 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 wanna 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-starved, may need our product more. They look pretty average, maybe, and that's it. They really look like... They're not. It's not some, you know, tail type of customer type. It's really, like, the average American home seller.
Can I get why more people?
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 spam and send you off to a bunch of realtors. We keep you in our system, and we continue to just educate you about how your home value's changed over time. And they engage very frequently with us. They wanna know how to refresh their offer, what's happened to it, and that's actually drove 70% of our contracts last quarter. People who had previously asked for an offer, and then just re-engaged us over a subsequent period of time.
So I think it's just, like, that 40%-4% is curiosity, and, like, it's great. I mean, the more people we can cover in a 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.
Hi, just to follow up on that question, the 40%, that do, you know, 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, it's probably, they just didn't end up selling their home.
Yeah. 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 and went elsewhere, and 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 to you, but we do track that. Their alternative is that they don't take an offer from us. They either sit on it, they don't do anything, right? We retain in the system, or they typically just list on the market.
... So you mentioned before that you pull back on marketing when the spread's wider as it is now. Is there a spread at which you see a really big change in perception of the product and the offer, and you're sort of seen not as a buyer of last resort, but as a facilitator of a friction reducer?
Yeah, there's a-- Without giving away all the secret sauce, there is a point on the curve where you know 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, 'cause we've been doing it now for decades. We understand that relationship really well.
Carrie, you know, we have a follow-up over there.
Just one 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, you know, 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-
Oh, yeah.
-you know, additional services so that the consumer would be paying less. Apologies if you've talked about this and I was just late.
No, no, you got it.
But, would love an update there.
Yeah, so that's all about, like, how much are we doing in terms of ancillary services, which we want more of today, 'cause it's, it's really title and it's mortgage. And those provide an offset to spread. So to the extent that that title, that transaction's coming with title, I can use that to reduce my spread. I can use it to reduce it if mortgage is coming. So we're focused on those things over time. The roadmap 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 personalize it for you. It doesn't have to be in Shoji White.
Maybe it can be a house color of your choice. So there's lots of things we can do on the ancillary side, but again, the watchword for 2022, 2023, has been focus. We're just gonna focus on stabilizing the core business. That has worked out really well so far. So medium term, we wanna get back to the services roadmap. It just hasn't been a core area of focus for us.
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.
Yeah, we have a fantastic ecosystem of partnerships that are really important for two 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, 'cause their economics are fixed. And as you said, it's across all three vectors. So for home builders, we've been in relationships with them, I think 90 home builders now, for about six years. And that's a perfect trade-in customer for us, right? You're at the showroom on the weekend, you wanna 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 dates.
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 didn't break down the actual contribution from agents, but, you know, we're seeing massive repeat business 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, we work 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 their choices, right?
You're not doing your job if you don't show up 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. We view us as partners to agents, and that we're just a tool in their toolkit. And then we've got the online real estate portals, Zillow, Redfin, Realtor, and again, that's just 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.
That's just so you know, if you're online and you're looking at real estate, like a lot of us do late night, and you're thinking about maybe you wanna list your home and call an agent, up pops 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.
Great. Well, we're just about time, so that's an excellent way to wrap up the session.
Great.
Carrie, thank you so much.
Thanks, Michael.
It's been such a privilege to be able to host you here.
Yeah, appreciate it. Thank you very much.
Great.
Bye.
Thanks. We appreciate it.