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Offerpad CEO Brian Bair sent a message of confidence in his company’s business model and ability to turn a profit in a recent interview with National Mortgage News.
The company’s shares fell to all-time lows after it shared details from its second-quarter performance earlier this month.
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The company reported a $13.8 million net loss in the second quarter on $251.1 million in revenue. That was slightly better than the first quarter, when Offerpad lost $17.5 million.
Around the same time, the company laid off employees in sales, marketing and operations as it sought to contain its expenses in a bid to regain profitability.
CEO Brian Bair told National Mortgage News that Offerpad was focused more on fewer transactions and wider margins.
Offerpad is focused on expanding its offerings past its cash offer and renovation systems, adding in-house lending to its product list.
“Integrating mortgage with some of our other technology solutions is going to be really important,” Bair told the outlet. “We’re pausing just to figure out when and how to do it, and frankly, making sure that the customer is getting the same experience with mortgage as our other products.”
Offerpad executives have been working to pivot from a sellers to a buyers market by shrinking the company’s “buy box” — narrowing the scope of the homes that it evaluates for purchase, and adjusting the input variables in its underwriting model to be more conservative.
“What we’ve been doing is staying very disciplined and being more specific about the inventory we’re buying. Making sure there’s not a bunch of active (listings) in the area,” Bair said.
The company picked up 831 homes in the second quarter, down slightly from 840 homes purchased in the second quarter of 2023.
Bair said Offerpad was leaving its homes on the market longer, rather than lowering its prices to meet potential buyers. Meanwhile, the company is leaning into its renovation capabilities to offer homes that will appeal to buyers, Bair said.
“We’re focused on having a really nice, renovated product we can put on the market, and that’s an advantage to some of the other homes in the area,” Bair told the news outlet. “New carpet, new paint, new appliances, new fixtures.”
Offerpad views its renovation business as an advantage and a money-maker, offering its construction and remodeling services to investors in the markets it operates in.
Bair said he thought agents no longer viewed Offerpad as a threat, noting they can make 4 percent if a client takes the company’s cash offer and the home is updated and resold.
He said he thought that more buyers would begin working directly with listing agents as a result of the settlements related to the antitrust litigation brought by homesellers.
“If somebody goes to a platform [and] they want to get into a house, I think they’re going to get more comfortable with it, and the listing agent is going to get more comfortable with showing the home,” Bair said. “Whether that takes six months or six years, I don’t know. But I do think you’re going to see a pretty significant transition.”
