What changed in this filing

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Item 1A. Risk Factors

2024-02-15 compared with 2023-02-23 · 159 added, 153 removed, 605 unchanged (34% of the section changed)

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See “Forward-Looking Statements.”

OPENDOOR TECHNOLOGIES INC.

Risks Related to Our Business and Industry

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• changes in national, regional, or local economic, demographic or real estate market conditions;

• increased mortgage interest rates, such as the recent significant increases in interest rates in 2022, or down payment requirements and/or restrictions on mortgage financing availability;

• increased mortgage interest rates, such as the recent significant increases in interest rates in 2022 and 2023, or down payment requirements and/or restrictions on mortgage financing availability;

• low home inventory levels or lack of affordably priced homes;

• high rental occupancy rates;

• labor or materials supply shortages;

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• illiquidity in residential real estate;

• overall conditions in the housing market, including macroeconomic shifts in demand, and increases in costs for homeowners such as property taxes, homeowners’ association fees and insurance costs;

• overall conditions in the housing market, including macroeconomic shifts in supply or demand, and increases in costs for homeowners such as property taxes, homeowners’ association fees and availability and/or affordability of insurance;

• low levels of consumer confidence in the economy and/or the U.S.

residential real estate industry;

• the continuing and future impacts of the pandemic caused by COVID-19 and its variants, or a future pandemic, on buying and selling trends in the residential real estate market;

• the future impacts of pandemics or epidemics, including any future resurgences of COVID-19 and its variants, on buying and selling trends in the residential real estate market;

• changes in household debt levels;

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• federal, state, or local legislative or regulatory changes that would negatively impact owners or potential purchasers of single family homes or the residential real estate industry in general, such as the Tax Cuts and Jobs Act of 2017, which limited deductions of certain mortgage interest expenses and property taxes;

• natural disasters, such as hurricanes, windstorms, tornadoes, earthquakes, wildfires, floods, hailstorms, and other events that disrupt local, regional, or national real estate markets.

• natural and man-made disasters and other catastrophic events, such as hurricanes, windstorms, tornadoes, earthquakes, wildfires, floods, hailstorms, terrorist attacks and other events that disrupt local, regional, or national real estate markets.

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We have a history of losses, and we may not achieve or maintain profitability in the future.

We have incurred net losses on an annual basis since we were founded.

We incurred net losses of $1.4 billion, $662 million, and $253 million for the years ended December 31, 2022, 2021, and 2020, respectively.

We incurred net losses of $275 million, $1.4 billion, and $662 million for the years ended December 31, 2023, 2022, and 2021, respectively.

We had an accumulated deficit of $3.3 billion and $3.1 billion as of December 31, 2023 and 2022, respectively.

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residential real estate industry;

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• our failure to realize anticipated efficiencies through our technology and business model;

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Accordingly, we may not be able to achieve or maintain profitability and we may continue to incur significant losses in the future.

Moreover, as we continue to invest in our business, we expect expenses to continue to increase in the near term.

These investments may not result in increased revenue or growth in our business.

Moreover, as we continue to invest in our business, we will incur expenses related to those investments, which may not result in increased revenue or growth in our business.

If we fail to manage our losses or to grow our revenue sufficiently to keep pace with our investments and other expenses, our business will be harmed.

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We may encounter unanticipated problems as we continue to refine our business model and may be forced to make significant changes to our anticipated sales and revenue models to compete with our competitors’ offerings, which may adversely affect our results of operations and profitability.

We operate in a competitive and fragmented industry, which could impair our ability to attract users of our products, which could harm our business, results of operations and financial condition.

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We operate in a competitive and fragmented industry that could impair our ability to attract users of our products, which could harm our business, results of operations and financial condition.

We operate in a competitive and fragmented industry, and we expect competition to continue to increase.

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• our brand strength relative to our competitors.

Our business model depends on our ability to continue to attract customers to our e-commerce platform and the products we offer and to enhance customers’ engagement with our products in a cost-effective manner.

New entrants continue to join our

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market categories at a rapid pace.

Our business model depends on our ability to continue to attract customers to our digital platform and the products we offer and to enhance customers’ engagement with our products in a cost-effective manner.

New entrants may continue to join our market categories.

Our existing and potential competitors include companies that operate, or could develop, national and/or local real estate businesses offering services to home buyers or sellers, including real estate brokerage services, title insurance, and escrow services.

Some of our competitors have well-established national reputations and may market similar products and services.

Some of our competitors may have well-established national reputations and may market similar products and services.

These companies may be larger than us and have significant competitive advantages, including better name recognition, greater resources, lower cost of funds and additional access to capital, and a broader set of offerings than we currently do.

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If we are not able to continue to attract customers to our platform and products, our business, results of operations and financial condition could be harmed.

Failures by our perceived competitors or companies with an iBusiness model in other markets may adversely impact Opendoor.

Failures by our perceived competitors or companies with an iBuying model in other markets may adversely impact Opendoor.

Because of the novelty of our business model and our limited track record as a public company, high profile failures of companies operating in similar or adjacent spaces, including companies in our market or companies operating in different markets but utilizing an “iBuyer” business model, may impact investor perceptions of the digital home buying industry as a whole.

Such events may negatively impact our stock price and ability to raise capital regardless of whether those events have any actual relationship with our business and financial or operational performance.

While we have experienced rapid growth historically, our business experienced significant contraction in the second half of 2022.

If we are unable to correct this contraction, we may be unable to grow in the future.

While we have experienced historic rapid growth, our business contracted in the second half of 2022.

While we have experienced rapid growth historically, our business experienced significant contraction in the second half of 2022, which continued throughout 2023.

If we are unable to correct this contraction, or adequately scale our operations, we may be unable to grow in the future.

While we have experienced historic rapid growth, our business contracted in the second half of 2022, which continued throughout 2023 as we focused on selling down our old book inventory, which is comprised of homes purchased before July 1, 2022.

We may not be able to reverse such contraction and grow our business in the future if we do not, among other things:

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• increase our brand awareness;

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• retain adequate availability of financing sources;

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These differences may result in greater pricing uncertainty, as well as higher capital requirements, hold times, repair costs and transaction costs that may result in those markets being less profitable for us than those that we currently operate in.

For instance, during 2023, we stopped acquiring inventory in, and operationally supporting, our markets in Boise, Idaho, Reno, Nevada and Asheville, North Carolina, because these markets were below the scale required for us to operate in a cost-effective manner and not sufficiently close to another market to leverage its operations.

Our business is dependent upon our ability to appropriately price and manage our portfolio of inventory.

An ineffective pricing or portfolio management strategy may have a material adverse effect on our business, sales, and results of operations.

We appraise and price the homes we buy and sell using data science, proprietary algorithms, and analysis from specially trained employees, incorporating a number of factors, including our knowledge of the real estate markets in which we operate.

This assessment includes estimates on time of possession, seasonality, macroeconomic and hyper-local market conditions, renovation costs and holding costs, transaction costs, and anticipated resale proceeds.

Our ability to acquire and resell homes profitably may be negatively impacted if our models lack robust historical data on home sales, material home features, or other market nuances, especially those outside of features and nuances we have previously encountered and modeled in our existing

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We assess and price the homes we buy and sell using data science, proprietary algorithms, and analysis from specially trained employees, incorporating a number of factors, including our knowledge of the real estate markets in which we operate.

This assessment includes estimates on time of possession, seasonality, macroeconomic and local market conditions, renovation costs and holding costs, transaction costs, and anticipated resale proceeds.

This, in turn, could negatively impact our revenue growth if resulting valuations are too low and/or fees are too high, or our profitability, if valuations are too high and/or fees are too low.

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Disruptions in the supply chain for the materials, such as paint and carpet, and constraints in the market for labor necessary to restore and resell home inventory could lengthen the period of time during which we must hold home inventory.

In addition, the value of homes in inventory may decline significantly and we could experience losses, which in the aggregate could be detrimental to our business and results of operations.

For example, due in part to macroeconomic factors such as increased interest rates and lower consumer confidence stemming from a potential recession, home values decreased beginning in the second quarter of 2022.

If we have excess inventory or our average days to sale increases, as was the case in the second half of 2022 alongside home price value decreases, the results of our operations may be adversely affected because we may be unable to liquidate such inventory at prices that allow us to meet margin targets or to recover our costs.

In addition, the value of homes in inventory may decline, and we could experience losses as a result, which in the aggregate could be detrimental to our business and results of operations.

For example, due in part to macroeconomic factors such as increased interest rates and lower consumer confidence stemming from recession risk, in the second half of 2023, market clearance rates slowed, which resulted in reduced pace of our resales.

As a result, we reduced home-level prices to stay inline with our clearance rate targets, which adversely affected our results of operations.

Furthermore, if we have excess inventory or our average days to sale increases, as was the case in the second half of 2022 alongside home price value decreases, the results of our operations may be adversely affected because we may be unable to liquidate such inventory at prices that allow us to meet margin targets or to recover our costs.

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Declining real estate values have resulted in, and could continue to result in, inventory valuation adjustments, which have and may continue to adversely affect our financial condition and operating results.

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Even if we do not determine that it is necessary or appropriate to record an inventory valuation adjustment in the current financial period, a reduction in the estimated net realizable value of a property could subsequently manifest and would therefore affect our earnings and financial condition at that time.

Launches of new product or service offerings, like our 3P product, and expansions of existing product and servicing offerings, may consume significant financial and other resources and may not achieve the desired results.

Launches of new product or service offerings and expansions of existing products, like our listing and marketplace products, may consume significant financial and other resources and may not achieve the desired results.

We regularly evaluate launching new product or service offerings to our customers, as well as expanding existing offerings.

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Despite the expenses and time devoted to launching new or expanded product or service offerings, we may fail to achieve the financial and market share goals anticipated, which may adversely affect our business and results of operations.

One such offering is our 3P product that we launched in a limited number of markets in 2022.

Setting up an offering such as our 3P product comes with substantial upfront costs and we may not achieve profitability in time, if at all, to make up for those costs.

Further, there is no guarantee that buyers and sellers will want to transact in a manner contemplated by this offering, or that we will be able to attract a sufficient number of sellers to attract buyers, or a sufficient number of buyers to

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attract sellers.

In addition, we may encounter difficulties in building and marketing this new offering, such as obtaining the necessary licensing and staffing, building a marketing apparatus for the offering, or standing up other business operations, These difficulties could make expanding to new markets too slow to cover the fixed and upfront costs of setting up the marketplace.

For example, our listing and marketplace products are only available in a limited number of markets.

Expanding offerings such as our listing and marketplace products and setting up new offerings comes with substantial upfront costs and we may not achieve profitability in time, if at all, to make up for those costs.

Further, there is no guarantee that buyers and sellers will want to transact in a manner contemplated by such offerings, or that we will be able to attract a sufficient number of sellers to attract buyers, or a sufficient number of buyers to attract sellers.

In addition, we may encounter difficulties in building and marketing new offerings, such as obtaining the necessary licensing and staffing, building a marketing apparatus for the offering, or standing up other business operations.

These difficulties could make expanding to new markets too slow to cover the fixed and upfront costs of setting up the marketplace.

Incumbents in the industry may also organize efforts to oppose our innovations and find ways to use existing regulations, or convince authorities to make new regulations that would make our business model unviable.

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Those competitors may have strategic advantages that make them better able to provide marketplace services or expand those services to new markets faster than we can, and we may be unable to compete in a sustainable way.

As we expand our marketplace to new markets, we may find that local preferences, conditions, or regulations differ from our other markets such that the benefits of scale do not materialize.

In addition, developing and marketing our 3P product could have higher costs than anticipated and could adversely impact our results or dilute our brand.

As we expand to new markets, we may find that local preferences, conditions, or regulations differ from our other markets such that the benefits of scale do not materialize.

In addition, developing and marketing our listing and marketplace products could have higher costs than anticipated and could adversely impact our results or dilute our brand.

Our business model and growth strategy depend on our marketing efforts and ability to attract buyers and sellers to our website and mobile application in a cost-effective manner.

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If we are unable to recover our marketing costs through increases in customer traffic and in the number of transactions by users of our platform, or if our broad marketing campaigns are not successful or are terminated, it could have a material adverse effect on our growth, results of operations, and financial condition.

The extent to which the pandemic caused by COVID-19 and its variants will impact our future operations is highly uncertain and cannot be predicted at this time.

The COVID-19 pandemic significantly and adversely affected our business in 2020 when governmental authorities put in place limitations on in-person activities related to the sale of residential real estate.

As a result of these restrictions and safety concerns for our customers and employees, we temporarily suspended home acquisitions and sold down most home inventory before resuming home acquisitions later in the year.

We believe we have successfully adapted our operations to effectively execute on our business model during the COVID-19 pandemic.

However, given the impact of COVID-19 variants, there remains uncertainty as to COVID-19’s overall impact on the U.S.

economy and our business.

Future limitations may be imposed by governmental authorities on processes and procedures attendant to residential real estate transactions as a result of COVID-19 or another pandemic, and trends in consumer spending on real estate transactions may be impacted.

Transaction volumes are important to our business.

They affect all of the ways that we generate revenue, including our ability to acquire new homes and generate associated service fees, our ability to sell homes that we own, the generation of commissions from our brokerage business, and the number of transactions our title and settlement business closes.

We cannot predict the extent to which our transaction volumes and financial results may be adversely affected by the COVID-19 pandemic and its variants or by any other future pandemic.

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A significant portion of our costs and expenses are fixed, and we may not be able to adapt our cost structure to offset declines in our revenue.

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Due to our fixed cost base, our operating results can vary significantly based on transaction volumes in any given period.

For example, in 2022 our fixed costs increased as compared to 2021.

This contributed to increased losses in 2022 when transaction volumes declined.

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For example, our fixed costs have not decreased proportionately to our decreasing revenue, beginning in the second quarter of 2022.

This contributed to increased losses in 2022 and 2023 when transaction volumes declined.

Our growth depends in part on the success of our strategic relationships with third parties.

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As of December 31, 2023, we were in 50 markets across the United States.

For the year ended December 31, 2022, a majority of our revenue was generated from our top-seven markets by revenue.

As a result, local and regional conditions in these markets, including those arising from COVID-19’s impacts, may differ significantly from prevailing conditions in the United States or other parts of the country.

For the year ended December 31, 2023, a majority of our revenue was generated from our top-eight markets by revenue.

As a result, local and regional conditions in these markets may differ significantly from prevailing conditions in the United States or other parts of the country.

Any unforeseen events or circumstances that negatively affect these areas could materially adversely affect our revenues and profitability.

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casualty or condemnation losses;

and uninsured damages from floods, hurricanes, earthquakes or other natural disasters.

changes in meteorological or climatic conditions;

and uninsured damages from floods, hurricanes, wildfires, earthquakes or other natural disasters, which may become more frequent or severe as a result of climate change.

In addition, our top markets are primarily larger metropolitan areas, where home prices and transaction volumes are generally higher than other markets in the United States.

To the extent people migrate outside of these markets due to lower home prices or other factors, and this migration continues to take place over the long-term, then the relative percentage of residential housing transactions may shift away from our historical top markets where we have generated most of our revenue.

To the extent people migrate outside of these markets due to lower

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home prices or other factors, and this migration continues to take place over the long-term, then the relative percentage of residential housing transactions may shift away from our historical top markets where we have generated most of our revenue.

If we are unable to effectively adapt to any shift, including failing to increase revenue from other markets, then our financial performance may be harmed.

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We primarily acquire homes directly from consumers and there can be no assurance of an adequate supply of such homes on terms that are attractive to us.

A reduction in the availability of or access to inventory, including due to macroeconomic

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conditions, could have a material adverse effect on our business, sales, and results of operations.

A reduction in the availability of or access to inventory, including due to macroeconomic conditions, could have a material adverse effect on our business, sales, and results of operations.

Additionally, we evaluate thousands of potential homes daily using our proprietary pricing model.

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A lack of available homes that meet our purchase criteria may have adverse effects on our ability to reach our desired inventory levels, our desired portfolio diversification, and our results of operations.

For example, during 2023, historically low listing volumes, due in part to macro uncertainty in the housing market and elevated mortgage rates, constrained the supply of homes on the market and limited our access to desirable inventory.

Increases in transaction costs to acquire properties, including costs of evaluating homes and making offers, title insurance and escrow service costs, changes in transfer taxes, and any other new or increased acquisition costs, would have an adverse impact on our home acquisitions and our business.

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Additionally, any undetected issues with a third-party provider’s work may adversely affect our reputation as a home seller.

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We may acquire other businesses, which could require significant management attention, disrupt our business, dilute stockholder value, and adversely affect our operating results.

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The incurrence of indebtedness in connection with an acquisition would result in increased fixed obligations and could also include covenants or other restrictions that may impede our ability to manage our operations.

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A health and safety incident relating to our operations, misconduct by our employees or third parties operating on our behalf or regulatory sanctions could be costly in terms of potential liability and reputational damage.

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Additionally, all of these circumstances may involve significant costs to resolve that may not be fully covered by insurance, including legal costs associated with making repairs to the homes or removing unauthorized visitors and occupants.

If these increased costs are significant across our homes inventory, both in terms of costs per home and numbers of homes impacted, this could have an adverse impact on our results of operations that is material.

If these increased costs are significant across our homes inventory, both in terms of costs per home and numbers of homes impacted, this could have an adverse material impact on our results of operations.

Environmentally hazardous conditions may adversely affect us.

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A property owner who violates environmental laws may be subject to sanctions which may be enforced by governmental agencies or, in certain circumstances, private parties.

In connection with the acquisition and ownership of our properties, we may be exposed to such costs.

The cost of defending against environmental claims, of compliance with environmental regulatory requirements or of remediating any contaminated property could materially and adversely affect us.

Compliance with new or more stringent environmental laws or regulations or stricter interpretation of existing laws may require material expenditures by us.

In connection with the acquisition and ownership of our properties, as well as any repairs to or arrangement for the transport of materials from such properties, we may be exposed to such costs.

The cost of defending against environmental claims, of

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compliance with environmental regulatory requirements or of remediating any contaminated property could materially and adversely affect us.

Compliance with new or more stringent environmental and climate-related laws or regulations or stricter interpretation of existing laws may require material expenditures by us.

We may be subject to environmental laws or regulations relating to our properties, such as those concerning lead-based paint, mold, asbestos, radon, pesticides, proximity to power lines or other issues.

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Market opportunity estimates are subject to significant uncertainty and are based on assumptions and estimates that may not prove to be accurate.

The variables that go into the calculation of our market opportunity are subject to change over time, and there is no guarantee that our market opportunity estimates will reflect actual revenue that we will generate from our

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platform in the future.

Any expansion in our markets depends on a number of factors, including the cost, performance, and perceived value associated with our platform and the products and services of our competitors.

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The proper operation of these third-party networks and mobile infrastructure is beyond our control, and service interruptions or website unavailability could impact our ability to service our customers in a timely manner, and may have an adverse effect on existing and potential customer relationships.

Our information systems and technology may not be able to continue to accommodate our growth and may be subject to security risks.

Our information systems and technology may not be able to continue to accommodate our growth and are subject to security risks.

The cost of maintaining such systems may increase.

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There are numerous federal and state laws, as well as regulations and industry guidelines, regarding privacy and the storing, use, processing, and disclosure and protection of personal information, the scope of which are changing, subject to differing interpretations, and may be inconsistent among countries or conflict with other rules.

Additionally, laws, regulations, and standards covering marketing and advertising activities conducted by telephone, email, mobile devices, and the internet, may be applicable to our business, such as the Telephone Consumer Protection Act, or the TCPA, (as implemented by the Telemarketing Sales Rule), the CAN-SPAM Act, and similar state consumer protection laws.

We generally seek to comply with industry standards and are subject to the terms of our own privacy policies and privacy-related obligations to third parties.

Additionally, laws, regulations, and standards covering marketing and advertising activities conducted by telephone, email, mobile devices, and the internet, may be applicable to our business, such as the TCPA (as implemented by the Telemarketing Sales Rule), the CAN-SPAM Act, and

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similar state consumer protection laws.

In addition, there has been a notable increase in class actions in the U.S.

where plaintiffs have utilized a variety of laws, including state wiretapping laws, in relation to the use of chatbots, cookies and other tracking technologies.

We generally seek to align our practice with industry standards and are subject to the terms of our own privacy policies and privacy-related obligations to third parties.

We strive to comply with all applicable laws, policies, legal obligations and industry codes of conduct relating to privacy and data protection to the extent possible.

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Further, these proceedings and any subsequent adverse outcomes may cause our customers to lose trust in us, which could have an adverse effect on our reputation and business.

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Any significant change to applicable laws, regulations or industry practices regarding the use or disclosure of personal information, or regarding the manner in which the express or implied consent of customers for the use and disclosure of personal information is obtained, could require us to modify our products and features, possibly in a material manner and subject to increased compliance costs, which may limit our ability to develop new products and features that make use of the personal information that our customers voluntarily share.

Any significant change to applicable laws, regulations or industry practices regarding the use or disclosure of personal information, or regarding the manner in which the express or implied consent of customers for the use and disclosure of personal information is obtained (including for advertising purposes), could require us to modify our products and features, possibly in a material manner and subject to increased compliance costs, which may limit our ability to develop new products and features that make use of the personal information that our customers voluntarily share.

For example, the California Consumer Privacy Act (the “CCPA”), which took effect on January 1, 2020, imposes obligations and restrictions on companies regarding their collection, use, and sharing of personal information and provides new and enhanced data privacy rights to California residents.

The CCPA imposes a severe statutory damages framework.

Additionally, we are subject to the California Privacy Rights Act, or the CPRA, which expands upon the CCPA.

The CCPA requires (and the CPRA will require) covered companies to, among other things, provide new disclosures to California consumers, and affords such consumers new privacy rights such as the ability to opt-out of certain sales of personal information and expanded rights to access and require deletion of their personal information, opt out of certain personal information sharing, and receive detailed information about how their personal information is collected, used and shared.

The CCPA, like other comprehensive state privacy laws, imposes a severe statutory damages framework.

Additionally, we are subject to the California Privacy Rights Act (the “CPRA”), which expands upon the CCPA.

The CCPA and CPRA require covered companies to, among other things, provide new disclosures to California consumers, and affords such consumers new privacy rights such as the ability to opt-out of certain sales of personal information and expanded rights to access and require deletion of their personal information, opt out of certain personal information sharing, and receive detailed information about how their personal information is collected, used and shared.

The CCPA provides for civil penalties for violations, as well as a private right of action for certain security breaches that may increase security breach litigation.

Further, Virginia enacted the Virginia Consumer Data Protection Act, or the CDPA, another comprehensive state privacy law, that became effective January 1, 2023.

Also in 2021, Colorado enacted the Colorado Privacy Act, or the CPA, which goes into effect July 1, 2023.

The CCPA, CPRA, CDPA and CPA may increase our compliance costs and potential liability, particularly in the event of a data breach, and could have a material adverse effect on our business, including how we use personal information, our financial condition, the results of our operations or prospects.

Further, Virginia enacted the Virginia Consumer Data Protection Act (the “VCDPA”), Colorado enacted the Colorado Privacy Act (the “CPA”), Connecticut enacted the Connecticut Data Privacy Act (the “CTDPA”) and Utah enacted the Utah Consumer Privacy Act (the “UCPA”), other comprehensive state privacy laws, that became effective in 2023.

The CCPA, CPRA, VCDPA, CPA, CTDPA and UCPA may increase our compliance costs and potential liability, particularly in the event of a data breach, and could have a material adverse effect on our business, including how we use personal information, our financial condition, the results of our operations or prospects.

A number of other proposals exist for new federal and state privacy legislation that, if passed, could increase our potential liability, increase our compliance costs and adversely affect our business.

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Any of these events would have a material adverse effect on our business, results of operations, and financial condition.

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In the future we may be party to intellectual property rights claims and other litigation which are expensive to support, and if resolved adversely, could have a significant impact on us.

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While these prior claims have not been material and have all been resolved, there may be additional claims in the future where, if we are not successful in defending ourselves against these claims, we may be required to pay damages and may be subject to injunctions, each of which could harm our business, results of operations, financial condition and reputation.

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Issues in, and increasing regulation with respect to, the development and use of artificial intelligence (“AI”) may result in reputational harm or liability.

We currently incorporate AI capabilities into our pricing algorithms, and our research into and continued development of such capabilities to build additional proprietary real estate specific models remain ongoing.

As with many innovations, AI presents risks, challenges, and unintended consequences that could affect its adoption, and therefore our business.

AI algorithms and training methodologies may be flawed.

Ineffective or inadequate AI development or deployment practices by us or others could result in incidents that impair the acceptance of AI solutions or cause harm to individuals or society, including unintended biases and discriminatory outcomes.

These deficiencies and other failures of AI systems could subject us to competitive harm, regulatory action, legal liability, and brand or reputational harm.

If we employ AI capabilities that are controversial because of their impact on human rights, privacy, employment, or social, economic, political or other issues, we may experience competitive, brand, or reputational harm or legal and/or regulatory action.

Further, incorporating AI gives rise to litigation risk and risk of non-compliance and unknown cost of compliance, as AI is an emerging technology for which the legal and regulatory landscape is not fully developed, (including potential liability for breaching intellectual property or privacy rights or other laws).

regulators are applying existing authority to adopt laws and regulations and take other actions with respect to AI, including the risks described above.

For example, in October 2023, an executive order was issued addressing the safety and security of AI and which orders various federal agencies to ensure that their use of AI, and use by their respective regulated entities, address unintended bias and discriminatory outcomes.

While new AI initiatives, laws, and regulations are emerging and evolving, what they ultimately will look like remains uncertain, and our obligation to comply with them could entail significant costs, negatively affect our business, or entirely limit our ability to incorporate certain AI capabilities into our offerings.

Additionally, incorporating AI capabilities into our pricing algorithms and other models to potentially improve internal functions and operations presents further risks and challenges.

While we aim to use AI ethically and attempt to identify and mitigate ethical or legal issues presented by its use, we may be unsuccessful in identifying or resolving issues before they arise.

The use of AI to support business operations carries inherent risks related to data privacy and security, such as intended, unintended, or inadvertent transmission of proprietary or sensitive information, as well as challenges related to implementing and maintaining AI tools, such as developing and maintaining appropriate datasets for such support.

Further, dependence on AI without adequate safeguards to make certain business decisions may introduce additional operational vulnerabilities by impacting our relationships with customers and business partners;

by producing inaccurate outcomes based on flaws in the underlying data;

or other unintended results.

Our services utilize third-party open source software components, which may pose particular risks to our proprietary software, technologies, products and services in a manner that could negatively affect our business.

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To the extent that our services depend upon the successful operation of open source software, any undetected errors or defects in this open source software could prevent the deployment or impair the functionality of our platform, delay new solutions introductions, result in a failure of our platform, and injure our reputation.

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Some open source licenses contain requirements that we make available source code for modifications or derivative works we create based upon the type of open source software we use, or grant other licenses to our intellectual property.

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Furthermore, our development and testing processes may not detect errors and vulnerabilities in our technology offerings prior to their implementation.

Any inefficiencies, errors, technical problems or vulnerabilities arising in our technology

Any inefficiencies, errors, technical problems or vulnerabilities arising in our technology offerings after their release could reduce the quality of our products or interfere with our customers’ access to and use of our technology and offerings.

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offerings after their release could reduce the quality of our products or interfere with our customers’ access to and use of our technology and offerings.

Risks Related to Regulatory Compliance and Legal Matters

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We could be adversely affected if government regulations require us to significantly change our business practices with respect to this type of information, if penetration of network security or misuse of personal information occurs, or if the third parties that we engage with to provide processing and screening services violate applicable laws and regulations, misuse information, or experience network security breaches.

In order to provide the broad range of products and services that we offer customers, certain of our subsidiaries maintain title insurance and escrow, property and casualty insurance, construction, and licenses in certain states in which we operate.

These entities are subject to stringent state and federal laws and regulations and to the scrutiny of state and federal government agencies as licensed businesses.

Mortgage products are regulated at the state level by licensing authorities and administrative agencies, with additional oversight from the Consumer Financial Protection Bureau and other federal agencies.

These laws generally regulate the manner in which lending and lending-related activities, including mortgage brokering, are marketed or made available to consumers, including, but not limited to, advertising, finding and qualifying applicants, the provision of consumer disclosures, payments for services, and record keeping requirements;

these laws include, at the federal level, the Real Estate Settlement Procedures Act, the Fair Credit Reporting Act (as amended by the Fair and Accurate Credit Transactions Act), the Truth in Lending Act (including the Home Ownership and Equity Protection Act of 1994), the Equal Credit Opportunity Act, the Fair Housing Act, the Gramm-Leach-Bliley Act, the Electronic Fund Transfer Act, the Servicemembers Civil Relief Act, the Military Lending Act, the Homeowners Protection Act, the Home Mortgage Disclosure Act, the Secure and Fair Enforcement for Mortgage Licensing Act of 2008, the Federal Trade Commission Act, the Dodd Frank Wall Street Reform and Consumer Protection Act of 2010, the Bank Secrecy Act (including the Office of Foreign Assets Control and the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act), the Telephone Consumer Protection Act, the Mortgage Acts and Practices Advertising Rule (Regulation N), the CARES Act, all implementing regulations, and various other federal laws.

The Consumer Financial Protection Bureau also has broad authority to enforce prohibitions on practices that it deems to be unfair, deceptive or abusive.

Additionally, state and local laws may restrict the amount and nature of interest and fees that may be charged by a lender or mortgage broker, impose more stringent privacy requirements and protections for service members, and/or otherwise regulate the manner in which lenders or mortgage brokers operate or advertise.

As a buyer and seller of residential real estate through our business, we hold real estate brokerage licenses in multiple states and may apply for additional real estate brokerage licenses as our business grows.

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Department of Housing and Urban Development, and the states and municipalities in which we transact.

Further, due to the geographic scope of our operations and

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the nature of the products and services we provide, certain of our other subsidiaries maintain real estate brokerage, property and casualty, and title insurance and escrow, and construction licenses in certain states in which we operate.

Further, due to the geographic scope of our operations and the nature of the products and services we provide, certain of our other subsidiaries maintain real estate brokerage, property and casualty, and title insurance and escrow, and construction licenses in certain states in which we operate.

Each of these licenses subjects our subsidiaries to different federal, state, and local laws and the scrutiny of different licensing authorities, including state insurance departments.

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For certain licenses, we are required to designate individual licensed brokers of record, qualified individuals and control persons.

Certain licensed entities also are subject to routine examination and monitoring by the federal Consumer Financial Protection Bureau (for mortgage) and/or state licensing authorities.

We cannot assure you that we, or our licensed personnel, are and will remain at all times, in full compliance with local, state and federal real estate, title insurance and escrow, property and casualty insurance, construction, and mortgage licensing and consumer protection laws and regulations, and we may be subject to litigation, government investigations and enforcement actions, fines or other penalties in the event of any non-compliance.

Certain licensed entities also are subject to routine examination and monitoring by the CPFB (for title and escrow) and/or state licensing authorities.

We cannot assure you that we, or our licensed personnel, are and will remain at all times, in full compliance with local, state and federal real estate, title insurance and escrow, property and casualty insurance, real estate licensing and consumer protection laws and regulations, and we may be subject to litigation, government investigations and enforcement actions, fines or other penalties in the event of any non-compliance.

As a result of findings from examinations, we also may be required to take a number of corrective actions, including modifying business practices and making refunds of fees or money earned.

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Compliance with, and monitoring of, these laws and regulations is complicated and costly and may inhibit our ability to innovate or grow.

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If we are unable to comply with these laws or regulations in a cost-effective manner, it may require us to modify certain products and services, which could require a substantial investment and result in a loss of revenue, or cease providing the impacted product or service altogether.

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In addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many technology companies.

Companies that have experienced volatility in the market price of their stock have

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been subject to securities class action litigation.

Companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation.

We are currently, and may in the future be, the target of this type of litigation.

For example, securities litigation claims were filed against us and certain of our current and former officers and directors in October 2022 and November 2022 related to our pricing algorithm.

For example, securities litigation claims related to our pricing algorithm were filed against us and certain of our current and former officers and directors in 2022 and 2023.

Litigation is inherently uncertain and adverse rulings could occur, including monetary damages.

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In addition, our measure of certain metrics may differ from estimates published by third parties or from similarly-titled metrics of our competitors due to differences in methodology and as a result our results may not be comparable to our competitors.

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Our results of operations and financial condition are subject to management’s accounting judgments and estimates, as well as changes in accounting policies.

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If there are material weaknesses or failures in our ability to meet any of the requirements related to the maintenance and reporting of our internal control, investors may lose confidence in the accuracy and completeness of our financial reports and that could cause the price of our common stock to decline.

In addition, we could become subject to investigations by the

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applicable stock exchange, the SEC or other regulatory authorities, which could require additional management attention and which could adversely affect our business.

In addition, we could become subject to investigations by the applicable stock exchange, the SEC or other regulatory authorities, which could require additional management attention and which could adversely affect our business.

The obligations associated with being a public company require significant resources and management attention, and we have and will continue to incur increased costs as a result of being a public company.

We incur costs as a result of operating as a public company, and our management devotes substantial time to our compliance initiatives.

As a public company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform, and Consumer Protection Act, as well as rules adopted, and to be adopted, by the SEC and the applicable stock exchange.

As a public company, we are subject to the reporting and other requirements of the Exchange Act, the Sarbanes-Oxley Act, and the Dodd-Frank Wall Street Reform and Consumer Protection Act, as well as rules adopted, and to be adopted, by the SEC and Nasdaq.

These rules and regulations result in legal and financial compliance costs that are costly and our management and other personnel will continue to need to devote a substantial amount of time to these compliance initiatives.

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Tax laws, regulations, and administrative practices in various jurisdictions may be subject to significant change, with or without notice, due to economic, political, and other conditions, and significant judgment is required in evaluating and estimating these taxes.

Our effective tax rates could be affected by numerous factors, such as entry into new businesses and geographies, changes to our existing business and operations, acquisitions and investments and how they are financed, changes in our stock price, changes in our deferred tax assets and liabilities and their valuation, and changes in the relevant tax, accounting, and other laws, regulations, administrative practices, principles and interpretations.

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financed, changes in our stock price, changes in our deferred tax assets and liabilities and their valuation, and changes in the relevant tax, accounting, and other laws, regulations, administrative practices, principles and interpretations.

We are required to take positions regarding the interpretation of complex statutory and regulatory tax rules and on valuation matters that are subject to uncertainty, and the U.S.

Internal Revenue Service (“IRS”) or other tax authorities may challenge the positions that we take.

We have incurred losses during our history and do not expect to become profitable in the near future, and may never achieve profitability.

We have incurred losses during our history, and we may not achieve or maintain profitability in the future.

To the extent that we continue to generate taxable losses, unused losses will carry forward to offset future taxable income, if any, until such unused losses expire, if at all.

As of December 31, 2022, the Company had federal and state net operating loss (“NOL”) carryforwards of $1.7 billion and $1.2 billion, respectively.

As of December 31, 2023, we had federal and state net operating loss (“NOL”) carryforwards of $2.2 billion and $1.7 billion, respectively.

Under the Tax Act, as modified by the CARES Act, U.S.

federal net operating loss carryforwards generated in taxable periods beginning after December 31, 2017, may be carried forward indefinitely, but the deductibility of such net operating loss carryforwards in taxable years beginning after December 31, 2020, is limited to 80% of taxable income.

It is uncertain if and to what extent various states will conform to the Tax Act or the CARES Act.

In addition, our net operating loss carryforwards are subject to review and possible adjustment by the IRS, and state tax authorities.

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The United States government may enact further significant changes to the taxation of business entities including, among others, an increase in the corporate income tax rate, the imposition of minimum taxes or surtaxes on certain types of income or significant changes to the taxation of income derived from international operations.

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We are subject to taxes in the United States under federal, state and local jurisdictions in which we operate.

The governing tax laws and applicable tax rates vary by jurisdiction and are subject to interpretation and macroeconomic, political or other factors.

For example, the results of U.S Presidential and Congressional elections may lead to tax law changes.

For example, the results of U.S.

Presidential and Congressional elections may lead to tax law changes.

We may be subject to examination in the future by federal, state and local authorities on income, employment, sales and other tax matters.

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Further, the ultimate amount of tax payable in a given financial statement period may be impacted by sudden or unforeseen changes in tax laws, changes in the mix and level of earnings by taxing jurisdictions, or changes to existing accounting rules or regulations.

For example, the Inflation Reduction Act of 2022, enacted on August 16, 2022, imposes a one-percent non-deductible excise tax on repurchases of stock that are made by U.S.

For example, the Inflation Reduction Act of 2022, enacted on August 16, 2022, imposed a one-percent non-deductible excise tax on repurchases of stock that are made by U.S.

publicly traded corporations on or after January 1, 2023, which may affect any future share repurchases.

In addition, as of January 1, 2022, the Tax Act requires research and experimental expenditures attributable to research conducted within the United States to be capitalized and amortized ratably over a five-year period.

In addition, as of January 1, 2022, the Tax Act required research and experimental expenditures attributable to research conducted within the United States to be capitalized and amortized ratably over a five-year period.

Any such expenditures attributable to research conducted outside the United States must be capitalized and amortized over a 15-year period.

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As a result, fluctuations in our ultimate tax obligations may differ materially from amounts recorded in our financial statements and could adversely affect our business, financial condition and results of operations in the periods for which such determination is made.

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Risks Related to Our Liquidity and Capital Resources

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We will require additional capital and debt financing to pursue our business objectives and respond to business opportunities, challenges, or unforeseen circumstances, including to increase our marketing expenditures to build and maintain our inventory of homes, develop new products or services or further improve existing products and services, improve our brand awareness, enhance our operating infrastructure and acquire complementary businesses and technologies.

During past economic and housing downturns and more recently at the onset of the COVID-19 pandemic, credit markets constricted and reduced sources of liquidity.

In addition, recent significant increases in interest rates, supply chain issues, and higher inflation have increased concerns that the economy may enter into a recession.

Such a recessionary environment may also result in reduced sources of financing and liquidity, among other adverse impacts for our business, results of operations, and financial condition.

During past economic and housing downturns and at the onset of the COVID-19 pandemic, credit markets constricted and reduced sources of liquidity.

In addition, throughout 2022 and 2023 significant increases in interest rates, supply chain issues, and higher inflation increased concerns that the economy may enter into a recession.

Such a recessionary environment or economic uncertainty may also result in reduced sources of financing and liquidity, among other adverse impacts for our business, results of operations, and financial condition.

If cash on hand and cash generated from operations is not sufficient to meet our cash and liquidity needs, we may need to seek additional capital and engage in equity or debt financings to secure funds.

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If new financing sources are required, but are insufficient or unavailable, our ability to continue to pursue our business objectives and to respond to business opportunities, challenges, or unforeseen circumstances could be significantly limited, and our business, results of operations, financial condition, and prospects could be adversely affected.

We utilize a significant amount of debt and financing arrangements in the operation of our business, and so our cash flows and operating results could be adversely affected by required payments of debt or related interest and other risks of our debt financing.

We utilize a significant amount of debt and financing arrangements in the operation of our business.

Our cash flows and operating results could be adversely affected by required payments of debt or related interest and other risks of our debt financing.

As of December 31, 2023 we had approximately $2.2 billion of non-recourse asset-backed loans.

Our leverage could have meaningful consequences to us, including increasing our vulnerability to economic downturns, limiting our ability to withstand

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competitive pressures, or reducing our flexibility to respond to changing business and economic conditions.

Our leverage could have meaningful consequences to us, including increasing our vulnerability to economic downturns, limiting our ability to withstand competitive pressures, or reducing our flexibility to respond to changing business and economic conditions.

We are also subject to general risks associated with debt financing, including (1) our cash flow may not be sufficient to satisfy required payments of principal and interest;

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Any of these risks could place strains on our cash flows, reduce our ability to grow, and adversely affect our results of operations.

If the holders of the 2026 Notes become entitled to convert the 2026 Notes pursuant to the related indenture and one or more holders elect to convert their 2026 Notes, we would be required to elect to settle either all or a portion of our conversion obligation in cash, which could adversely affect our liquidity.

If the holders of our 0.25% convertible senior notes due in 2026 (the “2026 Notes”) become entitled to convert the 2026 Notes pursuant to the related indenture and one or more holders elect to convert their 2026 Notes, we would be required to elect to settle either all or a portion of our conversion obligation in cash, which could adversely affect our liquidity.

In addition, even if holders do not elect to convert their 2026 Notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the 2026 Notes as a current rather than long-term liability, which would result in a material reduction of our net working capital.

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We may not have the ability to raise the funds necessary for cash settlement upon conversion of the 2026 Notes or to repurchase the 2026 Notes for cash following a fundamental change, and our future debt may contain limitations on our ability to pay cash upon conversion of the 2026 Notes or to repurchase the 2026 Notes.

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We may not have sufficient funds to satisfy all amounts due under such existing or future indebtedness and repurchase the 2026 Notes or make cash payments upon conversions thereof.

The accounting method for reflecting the convertible notes on our balance sheet, accruing interest expense for the convertible notes and reflecting the underlying shares of our common stock in our reported diluted earnings per share may adversely affect our reported earnings and financial condition.

The accounting method for reflecting the 2026 Notes on our balance sheet, accruing interest expense for the 2026 Notes and reflecting the underlying shares of our common stock in our reported diluted earnings per share may adversely affect our reported earnings and financial condition.

In August 2020, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40):

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However, if reflecting the 2026 Notes in diluted earnings per share in this manner is anti-dilutive, or if the conversion value of the 2026 Notes does not exceed their principal amount for a reporting period, then the shares underlying the 2026 Notes will not be reflected in our diluted earnings per share.

The application of

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the if-converted method may reduce our reported diluted earnings per share, and accounting standards may change in the future in a manner that may adversely affect our diluted earnings per share.

The application of the if-converted method may reduce our reported diluted earnings per share, and accounting standards may change in the future in a manner that may adversely affect our diluted earnings per share.

The Capped Calls may affect the value of the 2026 Notes and our common stock.

In connection with the pricing of the 2026 Notes, we entered into privately negotiated Capped Calls with certain financial institutions (the “option counterparties”).

In connection with the pricing of the 2026 Notes, we entered into privately negotiated capped calls (the “Capped Calls”) with certain financial institutions (the “option counterparties”).

The Capped Calls are expected generally to reduce the potential dilution to our common stock (or, in the event of a conversion of the 2026 Notes settled in cash, to reduce our cash payment obligation) in the event that at the time of conversion of the 2026 Notes our common stock price exceeds the conversion price.

We have been advised that, in connection with establishing their initial hedges of the Capped Calls, the option counterparties or their respective affiliates entered into various derivative transactions with respect to our common stock concurrently with or shortly after the pricing of the 2026 Notes.

In addition, the option counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to our common stock and/or purchasing or selling our common stock or other securities of ours in secondary market transactions from time to time prior to the maturity of the 2026 Notes (and are likely to do so during any observation period related to a conversion of 2026 Notes or any redemption or repurchase of the 2026 Notes).

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do so during any observation period related to a conversion of 2026 Notes or any redemption or repurchase of the 2026 Notes).

This activity could also cause or avoid an increase or a decrease in the market price of our common stock or the 2026 Notes, which could affect holders’ ability to convert the 2026 Notes and, to the extent the activity occurs during any observation period related to a conversion of 2026 Notes, it could affect the number of shares and value of the consideration that holders will receive upon conversion of such 2026 Notes.

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We have entered into debt agreements with various counterparties to provide capital for the growth and operation of our businesses, including to finance our purchase and renovation of homes.

If we fail to maintain adequate relationships with

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potential financial sources or we elect to prepay or we are unable to renew, refinance or extend our existing debt arrangements on favorable terms or at all, we may be unable to maintain sufficient inventory, which would adversely affect our business and results of operations.

If we fail to maintain adequate relationships with potential financial sources or we elect to prepay or we are unable to renew, refinance or extend our existing debt arrangements on favorable terms or at all, we may be unable to maintain sufficient inventory, which would adversely affect our business and results of operations.

Obtaining new or replacement funding arrangements may be at higher interest rates or other less favorable terms.

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If we are unable to pay the outstanding balance of our debt obligations at maturity, the financing sources generally have the right to foreclose on the homes and other collateral securing that debt and to charge higher “default rates” of interest until the outstanding obligations are paid in full.

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In addition, each of our mezzanine term debt facilities is associated with and subordinated to one or more of our senior credit facilities.

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The borrowers under the debt facilities we use to finance the purchase and renovation of homes are special purpose entity (“SPE”) subsidiaries of Opendoor.

While our SPEs’ lenders’ recourse in most situations following an event of default is only to the applicable SPE or its assets, we have provided limited guarantees for certain of the SPEs’ obligations in situations involving

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“bad acts” by an Opendoor entity and certain other limited circumstances.

To the extent a guaranty obligation is triggered, we may become obligated to pay all or a portion of the amounts owed by our SPEs to their lenders.

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The foregoing considerations significantly increase the likelihood that a default or related enforcement or foreclosure event under one or more of our debt facilities would result in adverse consequences for our other debt facilities.

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Failure to hedge effectively against interest rate changes may adversely affect our results of operations.

Borrowings under our senior revolving credit facilities bear interest at variable rates and expose us to interest rate risk.

As a result of recent interest rate increases, our debt service obligations on our variable rate indebtedness increased in 2022.

This increase, and any future interest rate increases, would result in a decrease in our earnings and cash flows as a result of our increased debt service obligations.

While borrowings under our term debt facilities accrue interest at a fixed rate, borrowings under our senior revolving credit facilities bear interest at variable rates and expose us to interest rate risk.

Interest rates have increased in the past and may increase in the future, in which case our debt service obligations on the variable rate indebtedness would increase and our earnings and cash flows would correspondingly decrease.

Increased interest costs could also reduce the amount of debt financing that our homes inventory can support.

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Our hedging activity, if any, may fail to provide adequate coverage for interest rate exposure due to market volatility, hedging instruments that do not directly correlate with the interest rate risk exposure being hedged or counterparty defaults on obligations.

The transition under our senior revolving credit facilities to interest rates based on a Secured Overnight Financing Rate (“SOFR”) or another future replacement benchmark may involve unforeseen costs or other impacts on our business.

As of December 31, 2022, all of our senior revolving credit facilities were indexed to interest rate benchmarks based on SOFR, which is a new index calculated by short-term repurchase agreements and backed by U.S.

Treasury securities.

The market transition toward SOFR is expected to be complicated, and there is no guarantee that SOFR will become a widely accepted benchmark.

There remains uncertainty regarding financial markets’ future utilization of SOFR and the nature, acceptance, and equivalence of SOFR or any other replacement rate, and we cannot fully predict what impact the transition to SOFR may have on our business, financial results, and operations.

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Failures at financial institutions at which we deposit funds could adversely affect us.

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• the public’s reaction to our press releases, our other public announcements and our filings with the SEC;

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• actions by stockholders, including the sale of their shares of our common stock;

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• the volume of shares of our common stock available for public sale;

• general economic and political conditions, such interest rate increases, including the recent significant increases in 2022, higher inflation and decreased consumer confidence, recessions, the ongoing effects of the pandemic related to COVID-19 and its variants, local and national elections, fuel prices, international currency fluctuations, corruption, inflation, political instability, and acts of war or terrorism.

• general economic and political conditions, such interest rate increases, including the recent significant increases in 2022 and 2023, higher inflation and decreased consumer confidence, recessions, the future impacts of pandemics or epidemics, including any future resurgences of COVID-19 and its variants, local and national elections, fuel prices, international currency fluctuations, corruption, inflation, political instability, and acts of war or terrorism.

These market and industry factors may materially reduce the market price of our common stock and warrants regardless of our operating performance.

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Natural disasters or other catastrophic events may cause damage or disruption to our operations, real estate commerce, and the global economy, and thus could harm our business.

In particular, the pandemic related to COVID-19 and its variants,

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including the reactions of governments, markets, and the general public to the pandemic related to COVID-19 and its variants, may result in a number of adverse consequences for our business and results of operations, the details of which would be difficult to predict.

We have a large employee presence in San Francisco, California, a region that contains active earthquake zones.

In addition, properties located in the markets in which we operate in Florida, portions of North Carolina or Texas are more susceptible to certain hazards (such as floods, hurricanes or hail) than properties in other parts of the country.

In the event of a major earthquake, hurricane, windstorm, tornado, flood, or catastrophic event such as pandemic, fire, flood, power loss, telecommunications failure, cyber-attack, war, or terrorist attack, we may be unable to continue our operations and may endure reputational harm, delays in developing our platform and solutions, breaches of data security and loss of critical data, all of which could harm our business, results of operations and financial condition.

For example, the COVID-19 pandemic significantly and adversely affected our business in 2020 when governmental authorities put in place limitations on in-person activities related to the sale of residential real estate.

We also have a large employee presence in San Francisco, California, a region that contains active earthquake zones.

In the event of a major earthquake, hurricane, windstorm, tornado, flood, or catastrophic event such as pandemic (including any future resurgences of COVID-19 and its variants), epidemic, fire, flood, power loss, telecommunications failure, cyber-attack, war, or terrorist attack, we may be unable to continue our operations and may endure reputational harm, delays in developing our platform and solutions, breaches of data security and loss of critical data, all of which could harm our business, results of operations and financial condition.

Climate change is expected to adversely impact the frequency and/or intensity of such events, as well as contribute to various chronic changes in the physical environment that may also impact our operations, such as sea-level rise and changes to temperature or precipitation patterns.

Furthermore, these sorts of catastrophic events may cause disruption on both resale and acquisition side as we may not be able to transact on real estate.

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If we are unable to develop adequate plans to ensure that our business functions continue to operate during and after a disaster, and successfully execute on those plans in the event of a disaster or emergency, our business and reputation would be harmed.

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Cybersecurity incidents could disrupt our business or result in the loss of critical and confidential information.

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and business delays, service or system disruptions or denials of service.

We experience cyber incidents and other security incidents of varying degrees from time to time, though none which individually or in the aggregate has led to costs or consequences which have materially impacted our operations or business.

In response, we have implemented controls and taken other preventative actions to further strengthen our systems against future incidents.

However, we cannot assure you that such measures will provide absolute security, that we will be able to react in a timely manner, or that our remediation efforts following a cybersecurity incident will be successful.

We experience cyber incidents and other security incidents of varying degrees from time to time.

The controls and other preventative actions that we have taken to prevent, detect, and investigate these incidents may vary in maturity and are not always effective..

Further, we may not be able to react in a timely manner, or our remediation efforts following a cybersecurity incident may not be successful.

In addition, we do not know whether our current practices will be deemed sufficient under applicable laws or whether new regulatory requirements might make our current practices insufficient.

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Additionally, we rely on third parties and their security procedures for the secure storage, processing, maintenance, and transmission of information that is critical to our operations.

Despite measures designed to prevent, detect, address, and mitigate cybersecurity incidents, such incidents may occur to us or our third-party providers and, depending on their nature and scope, could potentially result in the misappropriation, destruction, corruption or unavailability of critical data and confidential or proprietary information (our own or that of third parties, including personal information of our customers and employees) and the disruption of business operations.

Any such compromises to our security, or that of our third-party vendors, could cause

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customers to lose trust and confidence in us and stop using our website and mobile applications.

Cybersecurity incidents may occur to us or our third-party providers and, depending on their nature and scope, could potentially result in the misappropriation, destruction, corruption or unavailability of critical data and confidential or proprietary information (our own or that of third parties, including personal information of our customers and employees) and the disruption of business operations.

Any such compromises to our security, or that of our third-party vendors, could cause customers to lose trust and confidence in us and stop using our website and mobile applications.

In addition, we may incur significant costs for remediation that may include liability for stolen assets or information, repair of system damage, and compensation to customers, employees, and business partners.

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The successful assertion of one or more large claims against us that exceed available insurance coverage, denial of coverage as to any specific claim, or any change or cessation in our insurance policies and coverages, including premium increases or the imposition of large deductible requirements, could have a material adverse effect on our business, results of operations, and financial condition.

See “ Part I – Item 1C.

Cybersecurity ” for additional information regarding our cybersecurity governance, risk management and strategy.

Internet law is evolving, and unfavorable changes to, or failure by us to comply with, these laws and regulations could adversely affect our business, results of operations, and financial condition.

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Any costs incurred to prevent or mitigate this potential liability could also harm our business, results of operations, and financial condition.

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Our fraud detection processes and information security systems may not successfully detect all fraudulent activity by third parties aimed at our employees or customers, which could adversely affect our reputation and business results.

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We make a large number of wire transfers in connection with loan and real estate closings and process sensitive personal data in connection with these transactions.

Though we have sophisticated fraud detection processes and have taken other measures to identify fraudulent activity on our mobile applications, websites and internal systems, we may not be able to detect and prevent all such activity.

We may not be able to detect and prevent all fraudulent activity on our mobile applications, websites, and internal systems.

Similarly, the third parties we use to effectuate these transactions may fail to maintain adequate controls or systems to detect and prevent fraudulent activity.

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Such claims, suits, government investigations, and proceedings are inherently uncertain, and their results cannot be predicted with certainty.

Regardless of the

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outcome, any such legal proceedings can have an adverse impact on us because of legal costs, diversion of management and other personnel, negative publicity and other factors.

Regardless of the outcome, any such legal proceedings can have an adverse impact on us because of legal costs, diversion of management and other personnel, negative publicity and other factors.

In addition, it is possible that a resolution of one or more such proceedings could result in reputational harm, liability, penalties, or sanctions, as well as judgments, consent decrees, or orders preventing us from offering certain features, functionalities, products, or services, or requiring a change in our business practices, products or technologies, which could in the future materially and adversely affect our business, operating results and financial condition.

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Institutional, individual, and other investors, proxy advisory services, regulatory authorities, consumers, and other stakeholders are increasingly focused on environmental, social, and governance (“ESG”) practices of companies.

As we look to respond to evolving standards for identifying, measuring, and reporting ESG metrics, our efforts may result in a significant increase in costs and may nevertheless not meet investor or other stakeholder expectations and evolving standards or regulatory requirements, which may negatively impact our financial results, our reputation, our ability to attract or retain employees, our attractiveness as a service provider, investment, or business partner, or expose us to government enforcement actions, private litigation, and actions by stockholders or stakeholders..

For example, various groups produce ESG scores or ratings based at least in part on a company’s ESG disclosures, and certain market participants, including institutional investors and capital providers, use such ratings to assess companies’ ESG profiles.

Simultaneously, there are efforts by some stakeholders to reduce companies’ efforts on certain ESG-related matters.

Both advocates and opponents to certain ESG matters are increasingly resorting to a range of activism forms, including media campaigns and litigation, to advance their perspectives.

To the extent we are subject to such activism, it may require us to incur costs or otherwise adversely impact our business.

There are also increasing regulatory expectations on ESG matters.

For example, various policymakers, such as the SEC and the States of California and New York, have adopted (or are considering adopting) requirements for the disclosure of certain climate-related or other ESG information, which may require us to incur additional costs to comply.

As we look to respond to evolving standards for identifying, measuring, and reporting ESG information, our efforts may result in a significant increase in costs and may nevertheless not meet investor or other stakeholder expectations and evolving standards or regulatory requirements.

For example, actions or statements that we may take based on expectations, assumptions,

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or third-party information that we currently believe to be reasonable may subsequently be determined to be erroneous or not in keeping with best practice.

If we fail to, or are perceived to fail to, comply with or advance certain ESG initiatives (including the manner in which we complete such initiatives), we may be subject to various adverse impacts, including to our financial results, our reputation, our ability to attract or retain employees, our attractiveness as a service provider, investment, or business partner, or expose us to government enforcement actions, private litigation, and actions by stockholders or stakeholders.

Additionally, many of our business partners and suppliers may be subject to similar expectations, which may augment or create additional risks, including risks that may not be known to us.

We may be unable to continue to use the domain names that we use in our business, or prevent third parties from acquiring and using domain names that infringe on, are similar to, or otherwise decrease the value of our brand or our trademarks or service marks.

4 unchanged sentences

Protecting and enforcing our rights in our domain names and determining the rights of others may require litigation, which could result in substantial costs and diversion of management’s attention.

Unresolved Staff Comments.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors