Opendoor real estate reviews – Should I sell to Opendoor?

Table of content

• History Of Opendoor
• Technological Innovations Of Opendoor
• Type of Properties Opendoor Buys
• Other Factors Opendoor Considers In A Property
• Cost of Opendoor Services
• Pros and Cons of Opendoor
• Pros: Convenient
• Cons: Costly Sales Price
• Pros: Guaranteed Cash Offer
• Cons: Higher Fees
• Reviews About Opendoor
• Frequently Asked Questions About Opendoor
• What is Opendoor?
• How does Opendoor work?
• Does Opendoor offer a fair price?
• Does Opendoor make good offers?
• Does Opendoor pay closing costs?
• Is Opendoor legit?
• Is Opendoor a ripoff?
• Can you negotiate a price with Opendoor?
• Which is better, Offerpad or Opendoor?
• Is Opendoor making money?
• Does Opendoor have hidden fees?
• Can I cancel my contract with Opendoor?
• Does Opendoor sell homes?
• The Bottom Line

Opendoor real estate makes selling a house faster and hassle-free. Opendoor offers to sell your home for 5% of the closing price like other prominent real estate agencies but on the lower end of your typical agent commission.

This might sound good, but if you’re looking for a top-of-the-line offer for your home, then you might be better off with listing your house in an open market. Read on to learn more about it.

History Of Opendoor

Eric Wu—the CEO— founded Opendoor real estate in 2014 in San Francisco with a few like-minded individuals. His knack for real estate started when he bought a 3-bedroom house near his college and turned the two rooms into rentals. With such, Eric used his first property’s value and the rentals to purchase another house. And upon his college graduation, he owned 25 Phoenix homes.

On top of that, he also graduated with knowledge in coding. With this skill, he used it to scale up his real estate ventures. One of which is RentAdvisor.com, where landlords and renters review properties. Another is a geo-data analytics company known as Movity.com that Trulia acquired in 2011.

His next ventures led him to meet Keith Rabois, who conceptualized Opendoor in 2003. However, getting investors to risk high amounts of money is hard, but Rabois persevered until he met Wu in 2009.

Finally, they could make Opendoor come to life in 2013, fully operational just a year later.

Technological Innovations Of Opendoor

Open door real estate buys and sells properties using tech innovations in their system. They aim to simplify transactions that homebuyers and home sellers undergo in a real estate transaction. Thus, their mantra is that anyone can sell even when they’re seated on their couch.

By using Opendoor’s platforms, customers can instantly sell their properties, and open door realty allows them to put an offer in on their dream home.

For homebuyers, they offer a video chat app to help them virtually tour the home they’re kept an eye on. This makes looking at homes easier as homebuyers no longer have to fly to another state to view Opendoor homes personally.

On top of that, Opendoor has a mobile app where clients can book an appointment and viewing of open door homes for sale if the video tour convinced them they have to see it in person.

Type of Properties Opendoor Buys

If you own a house and want to sell it immediately without going through the hustle and bustle of paperwork, showings, and constant phone calls, check out the types of properties that Opendoor buys to see if yours meets their needs:

• Condos in specific markets
• Duplexes in specific markets
• Townhomes
• Single-family homes

At this time, Opendoor doesn’t accept mobile or prefabricated homes.

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Other Factors Opendoor Considers In A Property

Although they have set their requirements, Opendoor states that such can change depending on market conditions. But generally, you need to check the following criteria so you’ll know whether you can get an Opendoor offer:

• Materials And Condition Of The Property: Homes with active organic growth are unlikely to be bought by Opendoor. They also don’t accept properties with masonite woodruff roofs, polybutylene plumbing, and other dated materials. Especially if natural disasters like fire or flood severely hit your house, don’t expect an Opendoor cash offer. Moreover, foundation issues, unpermitted additions, and foreclosure are other criteria that may negatively impact their decision.
• Solar Panels: If you have a solar-powered home, Opendoor considers that a plus.
• Ownership: Your house must not also be owned by government loan insurers, government agencies, or banks. You must solely own the property.
• Location: When the site is in a flood zone area, Opendoor is unlikely to buy it. But they consider age-restricted and gated communities within their service areas.
• Lot Size: The max lot size that Opendoor buys is 2 acres, but for specific sites. They’ll typically cap the land around 1.1.5 acres with their purchases.
• Opendoor Valuation: While they can buy a valuation as high as $1.4 million, Opendoor typically purchases those with a $100K-$600K valuation.

Cost of Opendoor Services

The upfront Opendoor fees when signing up with them sits at 5% of the sale price. However, the total fees might vary considering other expenses such as closing costs (1-3%) and repair deductions (1-2%). In total, the full charges are closer to 7-10%. Way more than the average agency.

If you are worried about open door hidden fees, try working with local agents or flat fee brokerages instead. They usually only charge 5% of the sale price or a flat rate if working with a discount brokerage upon listing your home. In addition, they have open markets that will give you better value and save you money on commissions.

Or you can try other digital brokerage firms, like Richr. You can list your home for free and get title settlement included for $499 once you close. Unlike Opendoor fees, Richr saves you money and is transparent about it.

Pros and Cons of Opendoor

Pros: Convenient

The number one advantage of the opendoor price is its convenience. For a long time, Opendoor has been working on making the registration process as smooth as possible. Home sellers only need to visit the website and sign up on Opendoor’s form.

Usually, they will give an official Opendoor offer within twenty-four hours after signing up. They also handle all of the additional costs, including home inspection fees.

Cons: Costly Sales Price

Although they claim that they aren’t a house-flipping business, some say otherwise. For them, Opendoor buys houses from sellers at a lower price than they intend to sell it for. They refurbish the home and put it on Opendoor listings, hoping for a buyer to appreciate the work that’s been done, willing to pay the price to reflect that.

With such, you can say that Opendoor profits from the seller through fees and built-in home equity as well as the payment from the new buyer whenever the home closes—like what house flippers do.

Pros: Guaranteed Cash Offer

When you do a For Sale By Owner method all on your own, you’re more likely to get a false hope that your home is finally sold. Some even experienced buyers backing out of the deal and couldn’t close the sale with improper paperwork.

Since Opendoor pays in cash, sellers who use the service can avoid running into this kind of scenario. Opendoor guarantees safe and fast transactions compared to selling on an open market since it eliminates the bidding period for processing loan applications. But with this service comes the 5-11% price tag.

Speaking of price tags, you can also apply to Opendoor mortgage if you’re a buyer. You can use Opendoor home loans for refinancing or buying a property. And the good thing about this is they don’t charge you for the financing process.

Cons: Higher Fees

Selling a home comes with inevitable fees. Open market realtors only charge a fee of 5-6% of the sale price; however, most open door complaints say that they pay up to 7-10%. Opendoor charges these fees depending on how long it takes to sell your home and a few other factors.

You might fall on the lower range fees if your home sells quicker, but you may also be charged a whopping 10%, which is why opendoor complaints are on the rise. So it’s essential to check the contract to know exactly how much you’ll be charged before signing.

Reviews About Opendoor

Aside from the pros and cons of Opendoor, you also need to know what other third parties have to say about them. While open door com reviews highlight positive testimonies on their website, other review sites say otherwise. Check out a compilation of open door reviews from two of the major sites:

• At Yelp, Opendoor in Las Vegas has the highest number of reviews, receiving a 2.0/5 with 29 reviews.
• Opendoor got a rating of 1.75/5 from Sitejabber with four reviews.

Frequently Asked Questions About Opendoor

What is Opendoor?

Opendoor is a well-known iBuying company based in the U.S. iBuying means agencies provide sellers with an offer after reviewing their application, typically as a company and not as new homeowners looking to move in.

One thing to note about buying from an iBuyer like Opendoor is that your home’s market value will often be lower than its traditional counterpart. And since Opendoor competitors are not only one or two, the competition is tight. This means selling your house faster is not always as easy as it sounds.

In addition, Opendoor offers three core services, such as the following:

• iBuying: As mentioned, Opendoor is an iBuying company. Thus, iBuying is the primary service that Opendoor offers.
• Trade-Ins: Trade-in is another service Opendoor provides, though it’s only available in some states. This service lets sellers exchange their current home with another from the selection at Opendoor’s website.
• Real Estate Marketplace: After buying, Opendoor flips the house and sells it directly in the market through their digital marketplace.

How does Opendoor work?

Opendoor’s process is simple. They aim to make home selling easier and hassle-free for homeowners. This means they eliminate most of the steps required in selling a home. Sellers no longer need to hire an agent, list their homes, and prepare for showings and open houses. But this easy method comes with a price: 5% of the house’s final sales price at the absolute minimum.

Apart from buying homes, Opendoor also sells houses to buyers who fit their qualifications. Opendoor has an array of houses to choose from on their website. Buyers can browse through it and make an offer they see fit. Opendoor also provides other real estate services such as insurance, financing, home repairs, and more.

Does Opendoor offer a fair price?

While some find it okay to, some Opendoor reviews think that the prices are typically lower than open market prices. Opendoor argues this as they pay for the expenses from waiting for the home to sell.

Does Opendoor make good offers?

Generally speaking, Opendoor provides a fair price for the houses being bought but takes repairs, location, and other factors into consideration.

However, you could have more profits from other agencies like Richr as they don’t charge commission fees. And when it comes to Opendoor vs Zillow, the shape of your home will dictate which could be higher.

Does Opendoor pay closing costs?

Like most iBuying companies, you need to cover the closing expenses, just like in a traditional sale. These expenses include recording fees, title insurance, notarization, escrow cost, and transfer tax, which sum up 1-3% of the final sales price.

Is Opendoor legit?

Yes. Opendoor is an authorized iBuying company. Despite offering lower than market value prices, Opendoor real estate pays its clients in cash, making closing deals faster. Some are even as early as 14 days.

Is Opendoor a ripoff?

No, Opendoor gives a fair price with honest fees compatible with their business model. There are other similar options out there that a home seller may find more favorable, like Richr.

Can you negotiate a price with Opendoor?

Unfortunately, some Opendoor reviews noted that they aren’t open to negotiations.

This means that Opendoor differs essentially from traditional sales in terms of price negotiation. It will probably be better to work with a professional realtor or sell it yourself using a free online MLS service that will offer you the best opportunity for negotiating offer prices.

Which is better, Offerpad or Opendoor?

When compared, Offerpad vs. Opendoor relies on cost-saving services and reviews. Generally, Opendoor is a better choice than Offerpad since the former has more commendatory reviews and cost-saving benefits.

Is Opendoor making money?

Opendoor’s business model is geared towards making revenues by selling the houses it buys for a small margin. On top of iBuying, Opendoor real estate also gains profit from sales expenses that home sellers pay. Lastly, they also profit by issuing loans.

Does Opendoor have hidden fees?

No. Unlike Opendoor competitors with hidden fees, the company is relatively straightforward with its costs to sellers.

Can I cancel my contract with Opendoor?

Opendoor allows a 90-day money-back guarantee for clients who are not happy with their service. The offer is available in certain cities, including LA, Dallas, Riverside, Phoenix, and Forth-Worth.

Does Opendoor sell homes?

Opendoor does sell homes. The whole business model of Opendoor real estate is to provide buyers and sellers with an easy and hassle-free way to buy and sell their homes. They pride themselves on making the transaction easier for both parties. Opendoor also offers different levels of support and cost-saving services depending on the home you’re looking to buy.

The Bottom Line

Overall, Opendoor real estate seems like a fair system, but you have to consider the cons. If you aim to profit more from your home, you need to weigh the risk of listing with Opendoor carefully. Instead, compare them to alternative brokerage services like Richr so that you can keep the equity in your home, in your pocket.