ATLANTA, GEORGIA — Opendoor operates as an iBuyer in nearly a dozen markets around the country, but there’s one market it’s avoided so far: its home city, San Francisco.
The city, besieged by a housing crisis, isn’t an ideal place to test a new way to buy and sell homes. The heart of the tech industry is where Opendoor’s engineers have been based. And the problem with that is that those engineers don’t always understand what it’s like to buy a home.
“You’d be surprised at the people in San Francisco who don’t know what ‘closing’ means,” Atlee Breeland, Opendoor’s new head of engineering in Atlanta, said from Opendoor’s coworking space in the southern city. The company has been based out of the shared office space there with plans to move into a dedicated space later this year.
It’s a bold move given that Opendoor just began buying and selling homes in Atlanta only about a year ago.
Breeland joined Opendoor a little over three months ago, and she’s now building out a team of engineers based out of the same market where Opendoor runs its East Coast operations.
The Atlanta engineering team still has fewer than 10 employees compared to San Francisco’s 150, but Opendoor aims to hire 30 by the end of the year and reach more than 100 over the next 18 months. The goal is for Atlanta to become a full-service engineering hub for Opendoor, not a satellite office to Opendoor’s engineering team in San Francisco.
“It’s really helpful if people come in with a basic level of real estate knowledge just because they know how buying a house works,” Breeland said. “Our engineers here have a bit better insight into the process.”
Opendoor is one of a handful of new startups that buys and sells homes online, sometimes making homesellers a lower offer than they might get listing their home on the open market, in exchange for the certainty and speed of Opendoor’s all-cash offers. The 4-year-old startup has raised more than $ 600 million from investors, most recently in a $ 325 million Series E funding round, and is now valued at over $ 2 billion.
To do that, Opendoor depends on technology: algorithms that tell Opendoor how much to offer for a home and internal tools the company uses throughout its capital-intensive home-flipping process.
While Silicon Valley is where Opendoor’s financial backing and software engineering has largely come from, it’s not where the product itself is growing. Opendoor’s current markets are Atlanta, Charlotte, Dallas-Fort Worth, Las Vegas, Minneapolis-St. Paul, Nashville, Orlando, Phoenix, Raleigh-Durham, San Antonio and Tampa. The company plans to be in 50 markets by 2020.
The median sale price of a home in San Francisco is over $ 1.3 million — prices that can lead young people to tune out how real estate works entirely when owning a home feels like an unattainable, far-off prospect. Even well-paid Silicon Valley software engineers increasingly can’t keep up with San Francisco’s housing market.
The median cost of a home in Atlanta, by comparison, is just over $ 300,000 — much more manageable for young professionals.
“Some of them are homeowners already, some of them are looking to become homeowners,” Breeland said of her growing team in Atlanta. “We like that they understand that.”
With that knowledge base, engineers in Atlanta will be able to better understand the products they are building. The engineering team in San Francisco will continue to oversee Opendoor’s pricing infrastructure, or the code that allows Opendoor to instantly tell you how much it would pay for your house.
In Atlanta, engineers will build products used by Opendoor during the home renovation process before the startup puts houses back on the market, Breeland said. Besides efficiently buying homes, part of Opendoor’s business is figuring out how to scale and repeat its buying and selling process around the country.
These products — many of which Opendoor renovation product managers use on an iPad as they communicate with vendors and keep houses up to standards while they’re on the market — are part of that long-term replication strategy.
Beyond general familiarity with real estate, engineering candidates in and around Atlanta are more familiar with Opendoor itself before joining the company.
Opendoor has run aggressive marketing campaigns in its markets, including Atlanta, making potential hires much more likely to have heard of the company as consumers.
As part of the hiring process, candidates are encouraged to go tour an Opendoor house on their own — an option new hires based in San Francisco don’t have.
“You get great products by having engineers who understand your product,” Breeland said. As long as San Francisco continues to be one of the hardest places in the country to buy a home, Opendoor might need to look outside Silicon Valley to find those engineers.