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Business Models Business Operations

How Does Offerpad Make Money (Business and Revenue Model)

The Offerpad business model

Offerpad logo
Here’s what you should know:
  • What is Offerpad, and how does Offerpad work?
  • How does Offerpad make money?
  • From Buying and Selling Homes
  • Service Fees (from Cash Offers)
  • Offerpad profit and revenue
  • What is the Offerpad business and revenue model?
  • Offerpad funding, net worth, and market cap
  • Offerpad subsidiaries, acquisitions, and exits

How does Offerpad make money? Well, here is a full, in depth, breakdown of their two (2) revenue streams and the different products and services they offer, as well as the Offerpad business and revenue model, how much Offerpad makes per year, and how Offerpad works.

What is Offerpad, and how does Offerpad work?

Offerpad is an online real estate marketplace that provides a platform for homeowners to buy and sell homes.

Founded in 2015 by Brian Bair and Jerry Coleman, Offerpad began trading on the New York Stock Exchange (NYSE) on September 2, 2021, under the ticker symbol “OPAD”.

Today, Offerpad operates in nearly 1,500 cities across 21 metropolitan markets in the U.S. and has now bought and sold more than 47,000 homes since being founded back in 2015.

So, how does Offerpad work? To use Offerpad, you can simply visit their website; or download their mobile app from the Apple App Store or Google Play store.

Once on their website, you can then simply choose from the “Sell”, “Shop Homes”, or “Home Loans” tabs at the top of the page – and go from there.

Some of Offerpad’s competitors include Zillow, RedfinCompassOpendoor, Trulia, and other online real estate marketplaces.

Offerpad App in Apple App Store | Offerpad Business Model | How Does Offerpad Make Money? | How Does Offerpad Work?
Source: Apple App Store | Offerpad

How does Offerpad make money?

According to pages 6 and 8 of Offerpad’s 2021 Annual Report, Offerpad has bought and sold more than 47,000 homes totaling approximately $5.4 billion in revenue since being founded back in 2015.

So how is Offerpad making money off of all these bought and sold homes on their marketplace?

Below is a breakdown of how much money Offerpad makes and its revenue model. Including all revenue streams and how much they charge for their services.

Here are the 2 ways of how Offerpad makes money in 2022

Offerpad has a revenue model that makes money in two (2) ways; from the revenue it makes from selling homes and the service fees they collect from homeowners who sell their home to them.

#1. From Buying and Selling Homes

To no surprise, Offerpad makes most of its money from buying and selling homes on its marketplace.

As noted above, Offerpad says to have bought and sold more than 47,000 homes totaling approximately $5.4 billion in revenue since they were founded back in 2015.

Which, if you run the numbers, comes out to roughly $114,893 per home sold. Although it’s unclear whether this number would represent the average sales price of each home Offerpad sold or their profit per sold home.

#2. Service Fees (from Cash Offers)

Offerpad also makes money by charging sellers a service fee every time they sell their home to Offerpad.

Homeowners have two (2) options to choose from when selling their home on Offerpad; list it on their marketplace or sell it to Offerpad.

If they choose to sell it to Offerpad, this happens through their “Express Cash Offer” service. Which allows homeowners to sell quickly without listings, showings, renovations, real estate agent fees, etc.

And because of this convenience, Offerpad charges a 6% service fee. The 6% is taken from the cash offer price. For example, if the seller accepts a $200,000 cash offer, Offerpad would earn a $12,000 service fee.

How much does Offerpad charge? (Offerpad service fee)

  • 6% service fee of the offer price
Offerpad cash offer | Offerpad Business Model | How Does Offerpad Make Money? | How Does Offerpad Work?
Source: Offerpad

Offerpad profit and revenue

In 2021, Offerpad reported $2.07 billion in revenue.

Note: Because Offerpad Solutions Inc. is a publicly traded company, under the Securities Exchange Act of 1934, they must file continuous financial filings with the U.S. Securities and Exchange Commission (SEC). You can find all of Offerpad’s publicly released financial reports, including annual reports, through Offerpad’s investor section on their website.

What is the Offerpad business and revenue model?

Offerpad makes money through a few revenue models that they combine within their company, they are:

  • Transaction based business model
  • Fee for service (FFS) business model

Offerpad funding, net worth, and market cap

Offerpad’s Crunchbase profile shows Offerpad has raised $355 million over 4 rounds and has a market cap of $512.5 million as of August 2022.

Offerpad subsidiaries, acquisitions, and exits

To date, Offerpad has not made any acquisitions, investments, or exits.