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Does Opendoor pay market value? | How Opendoor offers work | Repair costs | Opendoor alternatives | Should you accept Opendoor’s offer? | FAQs
Opendoor’s offers are rarely as high as what you’d get on the open market. And the company sometimes charges high repair fees, which can further eat into your sale proceeds.
But those downsides may still be worth it for sellers who prioritize a quick and easy home sale. With Opendoor, you can close in as little as 14 days, plus you won’t have to deal with the hassle of showings, home prep, or repairs.
In some cases, Opendoor’s offers are also close enough to market value to make them especially appealing.
If you’re curious whether Opendoor is offering you a fair price, our team can help you get competing quotes from leading cash buyers. You can also request a free home valuation from a top local realtor to help you compare offers against your home’s potential sale price. Our service is free to home sellers, and there’s no obligation to move forward with an offer or listing.
Compare fair cash offers from iBuyers and investors to the sale price you’d get with an agent.
How Opendoor offers work
Opendoor’s offers are based on a variety of data points, including what similar homes are selling for in your area. They also consider how much risk a property presents based on current market conditions. For example, if prices are rising, the company may be more willing to make a higher offer.
Details about your home that you submit during your offer application are also taken into account. Special features and upgrades, such as renovated kitchens and bathrooms, can also make a difference. Opendoor recommends sending photos with your offer request to show these upgrades, which can help push your offer higher.
Opendoor will present you with a preliminary offer first, then a final offer. If you accept the preliminary offer, Opendoor will deduct estimated repairs and closing costs to come up with a new figure. That final amount will be lower than your preliminary offer, possibly by thousands of dollars.
Your final offer will reflect Opendoor’s offer price minus its service fee (5%), variable repair cost deductions, and standard seller closing costs (usually about 1%). As an example, we talked to Bradley Carpenter, who sold his house to Opendoor in 2022 for $230,000. Opendoor deducted a $11,500 service fee, $7,000 in repair costs, and standard closing costs (a little less than 1%) assessed by the title company.
Example Opendoor offer
None | N/a |
---|---|
Sales price | $400,000 |
Service fee (5%) | $20,000 |
Repair deductions (1%) | $4,000 |
Closing costs (1%) | $4,000 |
Net proceeds | $372,000 |
Because market conditions can change dramatically, so can Opendoor’s offers. For example, one reviewer got an offer that she considered “fair” but had to delay selling. When she went back to Opendoor a month later, she said, “their other offer to my shock was $100,000 less and their excuse [was] market conditions.”
Does Opendoor offer market value?
Opendoor doesn’t usually offer fair market value, although there are certainly exceptions. During the pandemic, when real estate prices were rising rapidly, Opendoor gained a reputation for offering close to or even more than market value, since it could be sure of making a profit on the resale of the house.
However, real estate analyst Mike DelPrete has found that offers are now much lower. In one example, he found a house given an offer that was nearly $50,000 less than its estimated $587,000 value.
While Opendoor’s preliminary offers are often still attractive, its final offers, which take into account repair estimates, can be much lower. For example, one seller said, “I sold to Opendoor last year [2022]. Got near market price and no hassle to do anything.” However, another seller said, “I didn’t expect anything ridiculous from them like last year, but they were almost 18% lower [than market value] with their cash offer.”
That said, final offers vary a lot and some sellers say they still get close to market value with Opendoor.
Should you accept Opendoor’s offer?
Opendoor’s cash offer can be a good option if your top priority is selling your house fast and for the least amount of hassle.
But if you’re looking to get the most possible money for your house, you should consider other options first. Opendoor’s final offer will rarely match what you can get on the open market. Other cash buyers may also be able to offer better terms, especially if you have a house in need of lots of repairs.
Benefits of selling to Opendoor | Risks of selling to Opendoor |
---|---|
Choose your own closing timeline between 14–60 days | Sell for less than market value |
No need for repairs or showings | Limited ability to negotiate |
Available in more markets than other iBuyers | High service fees and repair costs |
Strict criteria for eligible houses |
✅ Choose your own closing date
By selling to Opendoor, you get to choose your own closing date, which can be as quick as 14 days or as far out as 60. This flexibility is great if you need to sell fast or you’re concerned about lining up your closing with moving into a new home.
That convenience makes up for Opendoor’s lower offers for some sellers. For example, one Opendoor seller says, “You have to go in knowing you are taking a bit of a haircut off the top. For us it was worth it as we were able to get into our dream home.”
✅ Skip the repairs and showings
Opendoor takes care of any repairs your house needs after you move out, so there’s no need for you to worry about them. Plus, you won’t have to worry about showings or staging your home, which can be highly disruptive during a traditional sale.
You will need to complete an in-person inspection, but our research shows that this is usually quick and may only include an exterior walkaround of your property. Depending on the inspection, your offer may also be reduced to account for any repairs Opendoor will have to complete after your sale.
✅ Available in many major cities
Opendoor is available in over 50 major metro areas, which is about twice as many as its leading competitor, Offerpad. This coverage makes Opendoor the most widely available iBuyer in the country.
This broad availability also ensures that you can usually compare Opendoor’s offer to Offerpad or other cash buyers. By comparing offers, you increase your chances of selling for a fair price and for the best terms.
❌ You’ll likely get less than market value
In August 2022, Opendoor settled a lawsuit with the Federal Trade Commission over allegedly misleading customers about its offers. The truth is that Opendoor is unlikely to offer you as much as you’d get by selling on the open market, especially after accounting for repair estimates.
While the company offered close to market value during the pandemic when home prices were rising rapidly, that is usually no longer the case. Real estate analyst Mike DelPrete has found that Opendoor is purchasing fewer homes than during the pandemic and offering lower amounts for them.
That said, offers from Opendoor tend to be better than traditional “we buy houses” companies, which are usually around 70% of fair market value.
❌ Opendoor rarely negotiates with sellers
Opendoor doesn’t usually negotiate with sellers. Instead, their final offer, which is based on the in-person inspection, is usually a “take it or leave it” offer. While that simplicity helps make the transaction faster and more predictable, it means you’re unlikely to get any adjusted offer.
That said, it is still worthwhile to attempt negotiating with Opendoor, especially if you’ve gotten an offer from a competing iBuyer. For example, Bradley Carpenter, a seller in Kansas City, told us that he was able to get Opendoor to increase their offer by $3,000 after showing them Offerpad’s initially higher offer.
❌ Service fees and repair costs can add up
Opendoor’s service fee is 5%, which is comparable to the realtor commission you’d pay in a traditional home sale. However, repair costs can be a significant expense and may lead to a significantly lower offer.
Repair estimates are difficult to predict. While some sellers have been quoted repair estimates as low as 1%, others have been charged tens of thousands of dollars for Opendoor. We have noticed that repair estimates have gone up over the past year or so, which is unsurprising given that Opendoor is more selective about the houses it buys now.
❌ Only certain houses are eligible
Opendoor is different from traditional cash buyers in that it will only buy homes in fairly good condition and in select markets. Homes will generally have to be newer, have no major foundational or structural issues, and be easy to resell. This means that the home can’t have tenants, flood zone risk, or title problems.
If you’re trying to sell a home in poor condition or you live outside of a major metropolitan area, Opendoor is unlikely to make you an offer. However, you could consider other cash buyers, many of which buy properties as-is, even those facing foreclosure or in need of major repairs.
What fees does Opendoor charge?
Opendoor’s service fee is 5%, which is the same as what Offerpad, the other main iBuyer, charges. On top of its service fees, you’ll also pay closing costs and repair estimates. Here’s how the total fees break down:
- Service fee: 5%
- Closing costs: ~1%
- Repairs: Varies
- Total: ~6%, plus repair fees
Also, if you want to stay in your house past the closing date, you’ll need to pay a daily fee to do so, which is based on your home’s value. However, unlike Offerpad, Opendoor doesn’t charge a cancellation fee if you decide to back out before closing.
Overall, Opendoor’s 5% service fee is comparable to what traditional real estate agents charge, although it’s more than the 4–4.5% you might pay to a low commission broker. Closing costs are also about the same as listing with a realtor.
How much does Opendoor charge for repairs?
Opendoor’s repair estimates vary widely. Home sellers we’ve talked to have been charged as little as $7,000 in repairs while others have been quoted tens of thousands of dollars.
Issues with a home’s roofing, foundation, and HVAC system can lead to big repair charges. Opendoor will also consider issues with the exterior, such as trees/shrubbery touching the home, damaged eaves, or broken windows.
Interior issues like faulty kitchen appliances, leaky faucets, and damaged floors and walls can lead to additional repair deductions, as can older water heaters or circuit breakers and inadequate attic insulation, which can drive up utility costs. Finally, Opendoor lists pests and excessive debris as factors that can affect your repair charges.
While this criteria seems reasonable, in practice we’ve found repair estimates can vary a lot. Another problem is that sellers don’t always get an itemized list of repairs, which can make it difficult to judge if the estimates are fair.
Even when sellers are charged for repairs, those repairs aren’t always carried out. For example, one seller was charged $20,000 in repairs, most of which was for foundation issues. However, after selling to Opendoor, she says, “the house was relisted 10 days later with fresh paint and new carpet. […] They didn’t repair the foundation.”
Opendoor’s cash offer vs. alternatives
Selling to a cash buyer
A cash buyer could be the simplest solution if your home is in poor condition and may be tough to sell on the open market or to an iBuyer like Opendoor.
Cash home buyers like We Buy Ugly Houses provide fast cash offers on distressed homes and a speedy, convenient closing process. They generally pay up to 70% of the property’s ARV, but they don’t charge service fees, closing costs, or repair credits. They’re also more widely available than Opendoor, which currently only operates in about 50 markets nationwide.
Unlike Opendoor, local investors are sometimes willing to offer tailored solutions that better fit your situation and goals. For example, a cash buyer may be able to offer you a novation agreement in which the buyer takes care of your property’s repairs and sells it on the open market, splitting the final proceeds with you. This solution can work well if you have an outdated home and can’t afford the repairs yourself, but you still want to take advantage of selling on the open market.
Listing with a realtor
Listing your house on the MLS with a realtor is the best way to sell for the most money. Since multiple buyers can compete for your house, you’re more likely to sell for more.
However, selling with a realtor can take longer than selling to Opendoor. Whereas Opendoor can close on a sale in as little as 14 days, there is no guarantee about how quickly a realtor can get your house sold. However, many realtors have a network of buyers, so they may still be able to help you sell quickly.
In terms of costs, listing with a realtor is similar to selling to Opendoor. Traditional realtor commission is 5–6%, which is in line with Opendoor’s 5% service fee. However, you can opt to list with a discount realtor, which could bring your total realtor commission down to 3.5–4.5%. That allows you to save on fees while still selling your home for market value.
Closing costs and moving expenses are usually similar regardless of whether you use Opendoor or a realtor. However, repairs may be more when selling to Opendoor, given that they’re less likely to negotiate than a buyer who’s intent on purchasing the home or facing steep competition on the open market.
» LEARN: How Much Does it Cost to Sell a House? True Costs Revealed
Bottom line: Is Opendoor worth it?
Opendoor may be worth it for you if your top priority is selling quickly and not having to deal with the hassles of a traditional sale. With Opendoor you can close in as little as two weeks and you don’t have to worry about staging, repairs, or showings.
That convenience, however, comes at a cost. You won’t sell for as much as you would by listing on the open market with a realtor. If time is less of an issue for you and you want to sell for top dollar, you should consider using a real estate agent first.
If you decide to sell with a company like Opendoor, make sure you compare their offer to other cash buyers in your area.
If you’re looking to save time, our team can help. Simply tell us about your property, and we’ll gather multiple competing offers from serious cash buyers in our network. Get proposals sent straight to your inbox, with no extra fees or obligation to move forward.
Opendoor offers FAQs
Are Opendoor offers legitimate?
Yes, Opendoor offers are legitimate. It's the largest iBuyer in the U.S., operating in more than 50 cities. Opendoor provides quick, all-cash offers that are typically a bit less than fair market value for a home. It also deducts 7–10% for various service fees.
Can you negotiate offers with Opendoor?
Opendoor says it is willing to negotiate by phone or email until an agreement is reached, but you'd need to show that the company made a significant error in its assessment of your home for it to adjust its offer. Learn how to compare Opendoor offers.
Does Opendoor pay closing costs?
No, when you sell to Opendoor you will still need to pay closing costs, which are usually 1–3% for sellers. You will also have to pay Opendoor’s service fee of 5%, which is similar to the realtor commission you'd pay in a traditional home sale.
Why would you sell to Opendoor?
Opendoor may be a good option if your top priority is to sell quickly with as little hassle as possible. But that also means getting less for your house than you would by listing on the open market. If you want to sell for the best price possible or you have a home in need of significant repairs, you should compare their offer with Opendoor’s service feealternatives.
How accurate is Opendoor's preliminary offer?
Opendoor’s preliminary offer may differ substantially from its final offer. Your final offer may be deducted to account for repair estimates, which can run into the thousands of dollars. As a result, you should expect your final offer to be lower than the preliminary offer and below market value.
Related reading
Are Opendoor Reviews Positive? Learn what Opendoor’s customers are saying about the company and if its offers are fair or not.
Opendoor Preliminary Offer vs. Final Offer. Opendoor’s final offer will be lower than your preliminary offer, possibly by thousands of dollars. Learn more about its process here.
What Is an iBuyer? Selling to an iBuyer like Opendoor can be convenient, but it also comes with a few drawbacks. Learn more about how iBuyers work and if you can trust one to buy your home.
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