Brian Tolkin is the Head of Product at Opendoor, an online company that buys and sells residential real estate. Headquartered in San Francisco, it makes instant cash offers on homes through an online process, makes repairs on the properties it purchases and relists them for sale.
Brian has been an industry leader for over 10 years, previously working as a Group Product Manager at Uber where he led the Shared Rides product group, managing and shipping new products like uberPOOL, uberHOP, and uberEXPRESS.
You’re currently the Head of Product at Opendoor, could you describe what this role entails and what an average day looks like?
I’ve been at Opendoor for over five years, and I lead Opendoor’s product teams, consisting of designers, product managers and researchers. Together, we have created and launched some of Opendoor’s most impactful products that simplify two of life’s most important transactions: selling and buying a home. My team’s work spans Opendoor’s field operations, sales and support tooling, enterprise and growth platforms, and the consumer product and growth teams. I spend a lot of time understanding consumer sentiment to help inform product decisions. Ultimately, my goal is to enable Opendoor to move faster, build better products, and produce more modern experiences for our customers that support their lifestyle and needs.
In your recent LinkedIn job post you stated, “We’re on a mission to change the game in residential real estate.” What are some of the current problems with the current state of residential real estate?
Real estate is the last sector of the U.S. economy that has yet to really benefit from innovation. It’s a $2 trillion sector of our economy and millions of Americans buy and sell homes yearly – yet, the traditional process has gone untouched for decades and is largely offline, complex, and burdensome. In fact, less than 1% of residential real estate transactions happen online. Opendoor’s goal is to change that. We’re focused on digitizing the real estate transaction, from providing home offers in minutes via our website or app, to conducting virtual home assessments and facilitating digital closings.
The current macro environment has caused challenges, as well. High interest rates have resulted in affordability concerns for buyers and left many sellers on the sidelines. We’re focused on finding ways to “unstick” customers, whether that’s by providing certain cash offers, delivering more streamlined selling options, or offering move-in-ready homes.
How does Opendoor solve these problems?
Opendoor removes the layers, barriers, and confusion that often come with the traditional process. We give our customers greater confidence and control over the entire move. It used to be that all you could see online was an estimate for your home’s value; today you can get a real cash offer from Opendoor and conduct the entire transaction online from the comfort of your home. Getting a cash offer from Opendoor is a great first step for home sellers. It provides price transparency and the certainty of an offer in your back pocket while you explore all options to sell your home.
I’ll share an example of a customer that really moved me, and spoke to the purpose of what we do at Opendoor. One of our customers is a single mom of two, and needed to move closer to her family so they could help with her kids. She kept putting off her move because the last time she sold a home it was such a hassle — enduring over 60 showings, having to leave the house with her young children, and eventually taking an offer she wasn’t happy with. Thankfully, she found Opendoor – realizing she could sell her home, her way. She bypassed open houses, months of uncertainty, and potential buyer fall-throughs. Instead, she was easily able to close in 14 days with a fully digital experience, moving on to the next chapter for her family.
In slow markets or fast markets, people need to move. The commonality is that they are looking for an easier way to do it, and that’s where we come in. Selling directly to Opendoor has incredibly high customer satisfaction. Sellers have given us an average Net Promoter Score of nearly 80 over the last three years, and we’ve facilitated more than 250,000 customer transactions across 50 markets.
What are some of the different AI and machine learning algorithms that are used at Opendoor?
We’re focused on using technology to streamline the entire real estate transaction to make it as simple and certain as possible, which, in turn, will allow more people to move because the process is easier. Our pricing models are the backbone of the company and are what enable us to provide home offers in minutes. We’ve been incorporating AI and ML applications into our business from the beginning. We launched a neural network pricing model years ago, and we have also been leveraging computer vision and image-based learning models, especially to drive home condition models that have led to pricing accuracy improvements.
As part of this focus on home condition, we added a new step within the seller questionnaire, where we ask customers to evaluate a series of home photos with varied conditions, and then select the one that looks most like theirs. Our pricing team then examines the home’s interior photos and videos uploaded by the customer, gathering structured data that feeds into our acquisition pricing system. We’re able to use traditionally subjective data like the level of datedness of the finishings and turn it into structured data, allowing us to have a quantitative basis for determining how much a home is worth. Our model also helps us determine whether additional cosmetic renovation would create value for the seller and buyer. By factoring home condition into our pricing for sellers, we’re able to ensure that our listed homes are ready for potential buyers; which is important, because 67% of buyers and 77% of sellers don’t want to pay for remodeling or repairs.
I’m also excited about the potential for AI in helping our customers have more seamless experiences. Last year, we introduced a SMS-based AI tool that pairs AI with our human expertise to provide buyers and sellers with fast, accessible and unbiased information to help them through their home selling journey. Customers can use the tool to ask questions like, “What price are similar homes in my neighborhood selling for?”, or “What’s the first step to sell my home?” and we’ll provide trusted information in a much more convenient and low-effort way. We look forward to continuing to implement new technologies to solve real customer problems in real estate.
What are the different types of data points that are analyzed and where is this data sourced from?
Our team at Opendoor has spent the last 10 years building a high-quality dataset, and we’re constantly expanding it to make the most competitive offers possible. Our automated valuation model compares home details and features – not just square footage and the number of bedrooms and bathrooms – but also more granular features like floor type, proximity to transit and schools, and the level of street noise. We compare recent listings nearby, or comps, and use computing power to crunch a lot of the data to keep listings current. We also analyze data points around current market conditions and broader economic trends, such as available inventory, current interest rates, migration trends, and even social dynamics like schooling and remote work. And, we capture home-level data that sellers provide directly during the process.
Opendoor’s proprietary algorithm can do these calculations quickly for hundreds of comparable homes. Then we layer on human expertise, so that our model factors in insights from our team of data scientists, engineers, and pricing experts to consider the nuances of local market conditions.
Normally home inspections are done at the request of a buyer making an offer, how does Opendoor shift this paradigm?
Everything we do is based on the customer experience, so we’re always looking for ways to make it better and easier. The home assessments we conduct are a key part of how we finalize an offer for a customer’s home, but we’ve drastically reduced the hassle and time typically associated with in-person inspections. Once a customer receives their preliminary offer from Opendoor, they schedule their home assessment, which can often be done completely online. We offer a live, virtual home walkthrough with an Opendoor representative, which takes about 30 minutes. Or, we offer self-guided home walkthroughs. Sellers simply take videos and photos using their smartphone, computer or regular camera, highlighting what they think is unique about the home. This experience can be done in about 10 minutes, compared to a two hour inspection, and allows customers to complete it entirely on their own time. If we need to, we will send an employee to the home for a roughly 15 minute physical walkthrough of the home as well.
Can you discuss what the process is for someone who wants to list their home for sale?
From the start, we’ve always offered cash offers to home sellers. But, through many hours of talking with and listening to customers, we’ve learned that no two home sales are the same – and more than half of sellers (55%) want to list their home to maximize proceeds. That’s the driving force behind our product offering that gives customers the option to list their home with Opendoor. With this option, sellers can work with a local agent who can help them list their home on the MLS, with the certainty of our cash offer in their back pocket. The product provides confidence to sellers who aren’t getting the market offers they want, by giving them the opportunity to stop showings and accept Opendoor’s cash offer within 60 days.
On the surface it seems like Opendoor has optimized both the buyer and seller experience, how are you planning on further improving the product?
Our north star right now is to ensure Opendoor is a destination where all sellers start their journey, regardless of how they want to transact. That might be providing customers with our cash offer, helping them list on the MLS, or connecting them directly with buyers. Opendoor’s product solutions are tailored and customized to meet customers’ needs, and that’s what we’ll continue to focus on.
Thank you for the great interview, readers who wish to learn more should visit Opendoor.
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