From Caution to Velocity: Opendoor's Dramatic Shift in iBuying Model

Opendoor Technologies Inc. (OPEN) is fundamentally rethinking its iBuying approach, abandoning years of excessive defensive posturing to embrace a high-volume, market-making strategy. This strategic recalibration became evident during the Q3 2025 earnings discussion, where leadership openly conceded that over-reliance on risk aversion had crippled business momentum rather than protected it.

The Cost of Playing It Too Safe

The numbers tell the story. Opendoor acquired merely 1,169 homes in the third quarter of 2025—a historically low figure that left the company holding an aging, less desirable property portfolio. While total revenues reached $915 million (beating guidance), profitability deteriorated because older inventory selected under the prior conservative framework continued to drag on margins.

Management’s candid admission cut to the core issue: when transaction volumes evaporate, no amount of pricing discipline can salvage returns. The legacy inventory problem underscored how misguided caution had backfired. Rather than protecting the business, excessive risk aversion had starved it of scale and operational efficiency.

The New Playbook: Speed Over Spreads

Under revised leadership, Opendoor has pivoted toward what it calls a “market-maker” operating model—buying and selling homes faster, operating tighter margins, and prioritizing flow velocity over defensive positioning.

The mechanics are straightforward:

• Tighter Spreads on Quality Homes: The company is aggressively narrowing purchase-sale gaps for higher-quality properties to accelerate turnover
• AI-Driven Operations: Enhanced artificial intelligence powers pricing decisions, property inspections and operational workflows
• Faster Inventory Cycles: The goal is to slash days-in-possession, thereby reducing holding costs and improving cash dynamics
• Selective Acquisition Standards: Despite higher volume ambitions, buying criteria remain disciplined, filtering for homes that fit the faster-turnover thesis

Recent actions underscore commitment. Opendoor has already doubled its weekly acquisition pace by leveraging these levers, signaling that the shift is more than rhetorical.

Structural Cost Advantage Enables Scaling

A critical enabler is Opendoor’s structural cost position. Operating expenses are materially lower than they were a year ago, providing the company with meaningful room to expand transaction volumes without seeing fixed costs balloon proportionally. This cost discipline is the ballast that makes the velocity-focused model viable.

Additionally, the company is layering in ancillary revenue streams—mortgage and warranty products—that can incrementally improve unit economics and diversify earnings.

How OPEN’s Repositioning Compares

Opendoor’s renewed commitment to iBuying stands in sharp relief to its competitors’ divergent paths.

Zillow Group (ZG) famously exited iBuying entirely through Zillow Offers, concluding that home price forecasting at scale introduced unmanageable risk. Instead, Zillow repositioned as a capital-light marketplace and advertising platform. In essence, Zillow chose to avoid the balance-sheet exposure that comes with inventory management. OPEN is deliberately walking the path Zillow abandoned—but with heavier reliance on AI-driven pricing and rapid inventory turnover to mitigate the downside risks that spooked Zillow.

Offerpad Solutions (OPAD) remains an iBuyer but operates at a fraction of Opendoor’s intended scale and with tighter liquidity. Offerpad has emphasized cost discipline and selective purchasing. Opendoor’s volume ambitions aim to establish a market-making feedback loop that smaller, capital-constrained rivals will find hard to match.

Stock Performance & Valuation Snapshot

OPEN shares have surged 289% over the past year, dramatically outpacing the broader industry’s 5.1% gain. This rally reflects investor optimism about the strategic reboot.

On valuation metrics, OPEN trades at a forward price-to-sales (P/S) multiple of 1.06—substantially below the industry average of 4.75—suggesting the market either discounts execution risk or views the stock as undervalued relative to potential upside.

Earnings expectations reinforce the bullish narrative. Zacks consensus estimates imply 41.3% year-over-year earnings growth for 2026, with near-term EPS revisions trending upward over the past 60 days.

That said, OPEN carries a Zacks Rank #4 (Sell), reflecting analyst caution about near-term headwinds.

Weighing the Risk-Reward

The transition from risk aversion to velocity-driven operations is not without hazard. Higher transaction volumes expose OPEN to market volatility, inventory obsolescence risk, and operational scaling challenges. The iBuying model itself remains contested; not all market participants believe it can generate sustainable returns.

Yet framing iBuying as a liquidity business rather than a directional, proprietary-pricing bet may prove more durable. If Opendoor can execute the volume playbook while maintaining cost discipline and AI-powered operational rigor, the shift away from aversion and toward market-making mechanics could ultimately vindicate this strategic reset.