Which iBuyer is better? | How Offerpad and Opendoor work | Offers and fees | Customer reviews | Availability | Alternatives
Both Opendoor and Offerpad make selling your home fast and easy, but you'll get less money than market value. The most important difference is that Opendoor is available in more markets, but Offerpad has free perks like local moves and extended stays after closing.
If you decide to sell to either iBuyer, it’s probably going to look a lot different now than it did during the pandemic. Because home prices aren't increasing as quickly, both iBuyers are buying fewer homes and paying less.
Before selling to an iBuyer, you should compare offers from multiple cash buyers. You should also have a good idea of your home value to help you evaluate offers against your potential home sale price.
A simple way to compare offers is with a free service like Clever Offers. Clever gathers competing offers on your behalf from reputable iBuyers and investors. You also get a professional estimate of your home value — so you can weigh offers against your potential listing price.
Offerpad vs. Opendoor: Which is better?
Which iBuyer is better depends on your priorities. Here's a comparison of the most important factors.
Which iBuyer is better depends on your priorities. Here's a comparison of the most important factors.
Offerpad | Opendoor | |
---|---|---|
Offers | ✅ Offers are below market value but similar to Opendoor’s. | ✅ Offers have decreased since 2022 and are now similar to Offerpad’s. |
Fees | ✅ Offerpad charges a 5% service fee. Extended stays after closing are free, but there’s a 1% cancellation fee. | ✅ Opendoor’s service fee is 5%, same as Offerpad’s. There’s a daily fee for staying after closing (usually $100–400 per day), but no cancellation fee. |
Perks | ✅ Offerpad has better perks, like free 3-day extended stays and cash advances for home renovations. | ❌ Opendoor has limited perks aside from a 14-day extended stay, which costs extra. |
Customer reviews | ❌ Some reviewers complain about Offerpad’s customer service. | ✅ Opendoor is usually easy to reach and responsive to customers. |
Availability | ❌ Offerpad is only available in 14 states, but it buys more property types. | ✅ Opendoor is available in over twice as many markets as Offerpad. |
Buying | ❌ Buyers report high prices and shoddy repairs. | ❌ Buyers complain about high prices and poor repairs. |
Both iBuyers make similar offers
Since the real estate market slowed in 2022, Opendoor and Offerpad have become more conservative with the number of properties they are purchasing. Both companies offer less than what you could get on the open market with a realtor. And both tend to lower their offers after an inspection.
You can get an offer from Opendoor and Offerpad for free, so there’s no harm in comparing offers from both iBuyers. As one Reddit user noted, "[Opendoor is] not offering amazing prices the way they used to, but you can consider their offer a floor price for what you can exit at."
Opendoor and Offerpad have similar fees
Opendoor's fees are nearly identical to Offerpad's: Both iBuyers charge sellers a service fee of 5%.
However, Offerpad charges a 1% cancellation fee if you back out before closing, whereas canceling is free with Opendoor. On the other hand, Offerpad’s 3-day extended stay after closing is free, but Opendoor’s 17-day extended stay program comes with a daily fee (usually around $100–400 per day).
The other big expense is repairs, but it’s impossible to predict which company will charge less for the work needed on your house.
Opendoor requires you to use one of its contractors, which can make it hard to know if you get overcharged. Offerpad claims you can hire a contractor yourself, which might help you control repair costs. However, Offerpad doesn’t always honor that promise and doesn’t always provide an itemized list of required repairs.
As one customer said, "Offerpad requested $40k in repairs but refused to provide a list of needed repairs to justify this expense. When I inquired further [the Offerpad representative] advised that it was an overall estimate, not tied to any specific repair and that I did not have the option to make repairs myself as indicated on the website."
Offerpad offers better perks
Offerpad has better perks and additional services compared to Opendoor. With Offerpad, you can get a free move within 50 miles and a free 3-day stay after closing. Opendoor has an extended stay option of up to 17 days, but you have to pay a daily market rate.
If you list with an Offerpad agent, the company offers an interest-free loan to renovate your home and increase its appeal to buyers. You can use the loan for new paint, floors, countertops, appliances, fixtures, and more.
Service quality is better with Opendoor
Both companies have similar online review ratings, and both get complaints about low offers and poor repair jobs. But Opendoor gets somewhat better reviews for its service quality.
Opendoor is easier to reach, and Offerpad sometimes tells customers things that seem to contradict info on its website.
For example, one Opendoor customer said, "Communication was top-notch! Our Experience Partner was always available by phone, and promptly returned emails."
Opendoor is more widely available
Opendoor is the largest iBuyer in the country and operates in over twice as many markets as Offerpad.
Both companies also only buy homes that are move-in ready or close to it. However, Opendoor buys homes built as long ago as 1930, whereas Offerpad’s cutoff is 1950. But Offerpad buys condos and homes in gated communities and age-restricted communities. Opendoor only considers these types of properties in certain areas.
Buyers have similar issues with both iBuyers
Buyers have similar problems with Opendoor and Offerpad, like poor repairs that mask deeper issues.
Both companies also sometimes overprice homes, and it's hard to negotiate the price down. Unlike individual buyers, iBuyers can usually afford to sit on their properties until they get an offer they like.
Realtor Barry Richards said this about Opendoor houses for sale:
"We see a lot of them that seemed to be really overpriced. And they seem to just have a system of dropping the price until they hit the sweet spot. That is to say, when they get to that price, that's what they sell it for. They don't tend to negotiate much on whatever current price they have."
Offerpad vs. Opendoor: How they work
iBuying is Offerpad's and Opendoor's core product, but these companies offer other services as well.
Both companies have traditional listing services with real estate agents, sell homes directly to buyers, and offer perks for bundling services. Offerpad also expanded into home loans, and Opendoor has an in-house title insurance company.
Selling with Offerpad
Offerpad has three options for sellers: Sell to Offerpad, List with Offerpad, and Sell & Buy.
Sell to Offerpad
Sell to Offerpad, sometimes called Offerpad Express, is a standard iBuying service. Here’s how it works:
- You fill out an online form with basic information and pictures of your house.
- Offerpad makes a cash offer within 24 hours.
- You pass an inspection, and Offerpad may adjust your offer.
- If your home needs repairs, you can have Offerpad make them and subtract the cost from the sale proceeds, or you can pay for them out of pocket.
- You accept or reject Offerpad’s final offer. You can choose a closing date within 8–90 days. You can also stay in your house for free for up to 3 days after closing.
List with Offerpad
List with Offerpad, sometimes called Offerpad Flex, is a traditional home sale service. You work with an Offerpad partner agent to list your house on the open market. Here’s how it works:
- You fill out an online form.
- Offerpad makes an initial cash offer, but you choose to list with an agent instead.
- The Offerpad agent helps get your home ready for showings.
- You can accept an interest-free loan from Offerpad to help get your home ready. You pay back the loan through your sale proceeds.
- You list your home and wait for offers.
- If you don’t get an offer you like, you can accept Offerpad’s initial cash offer within 60 days. The company may adjust the offer after a home inspection.
Sell & Buy
With Sell & Buy, you either sell to Offerpad directly or list with them, and then you use an Offerpad agent to buy a home. You can also use Offerpad Mortgage to finance your next house, although you’re not required to. By bundling services, you may be eligible for discounts on your closing costs.
Buying with Offerpad
There's only one way to buy a home with Offerpad, and it's similar to buying the traditional way.
Buy with Offerpad
- Browse homes that Offerpad has for sale on its website. If you want to see only homes that Offerpad owns, filter the results to "Only Show Offerpad Homes."
- Request more info on a listing you like, and specify whether you have a realtor or not.
- After verifying your identity, schedule a visit to the home via the Offerpad app. The app allows you to unlock properties and view them on your own.
- Make an offer. In certain states, you can use Offerpad’s home loan service, which may entitle you to a buyer commission rebate or credits to apply at closing.
Selling with Opendoor
Opendoor has several options for sellers, ranging from iBuying to a traditional sale with a realtor.
Sell to Opendoor
Opendoor’s iBuying service is called List with Opendoor. The process is similar to Offerpad’s:
- You fill out an online form with some basic info about your property.
- Opendoor makes a no-obligation cash offer.
- You show your home to Opendoor with a virtual walk-through and uploaded photos and videos.
- Opendoor will conduct a quick, in-person exterior walkaround.
- Within a few days, Opendoor makes a final offer, which includes deductions for repair costs. Opendoor requires you to use its contractor to complete repairs, but you can reject its offer before making any repairs.
- You accept Opendoor’s offer and pick a closing date.
- Opendoor pays you within a few days of closing. You can stay in your house up to 17 days after closing for a daily fee.
Opendoor Exclusives
Opendoor Exclusives is similar to Opendoor’s standard iBuying service, but with a twist. You still get an initial cash offer from Opendoor, but then the company fields offers from other cash buyers. If Opendoor can't find a higher cash offer within 30 days, it increases its offer by $5,000.
Offer Lock
Opendoor’s Offer Lock is similar to List with Offerpad. With Offer Lock, you get a cash offer from Opendoor, but you then "lock in" that final offer for 60 days. During that time you list your house on the market with an Opendoor agent. Since you’ll be listing on the open market, you could potentially make more money. But if you don’t get a better offer, you can fall back on Opendoor’s locked-in cash offer instead.
Buy & Sell
You can sell your house directly to Opendoor and also buy your next house with one of its agents. The main advantage is convenience. Because you work with one team, you can better coordinate your sale and purchase so your closing and moving dates align and you don't pay two mortgages at once.
Buying with Opendoor
You can buy similar to the traditional way, or, if you live in Austin, Dallas–Fort Worth, or Houston, you can buy off-market through Opendoor Exclusives.
Buy with Opendoor
Buying through Opendoor isn’t that different from buying the traditional way. Here’s how it works:
- Search for homes on Opendoor’s website. If you only want to see Opendoor-owned homes, choose that option in the filters.
- Provide proof of mortgage pre-approval. Opendoor partners with home lender Lower, but you have no obligation to use Lower.
- Tour the home. You can tour most Opendoor-owned homes by unlocking the door yourself through the Opendoor app. For other homes, you need to contact the listing agent to view them. You can also view homes remotely by having an Opendoor representative live stream a tour.
- When you’re ready to make an offer, Opendoor suggests using one of its local partner agents. However, you have no obligation to do so. You can use your own buyer’s agent.
- If Opendoor accepts your offer, you can manage the closing dates and process online. Opendoor requires you to use its internal title insurance company.
Opendoor Exclusives
If you live in Austin, Dallas–Fort Worth, or Houston, you can buy through Opendoor Exclusives. With this program, you can view homes that Opendoor hasn't listed on the market yet, only its website. The advantage is that off-market homes are a bit cheaper than listed ones. Opendoor Exclusives are kept off-market for 14 days. After that, Opendoor lists them on the MLS.
Offers and fees
How much do Offerpad and Opendoor pay for homes?
Generally, Opendoor and Offerpad pay more than traditional cash home buyers, but their offers are almost always below what a realtor can get you on the open market. Both iBuyers may reduce your offer if they decide your home needs repairs or the market has changed.
Opendoor's median purchase price used to be more than Offerpad's. But now in 2024, its offers are closer to Offerpad's.
What fees do Offerpad and Opendoor charge?
Offerpad | Opendoor | |
---|---|---|
Service fee (cash offer option) | 5% | 5% |
Commission fee (listing option) | ~6% | ~6% |
Cancellation fee | 1% | N/A |
Estimated closing costs | 1–3% | 1–3% |
Estimated repair costs | Based on inspection | Based on inspection |
Offerpad fees
If you take Offerpad’s cash offer, you pay a 5% service fee. If you list with an Offerpad agent, you pay realtor commission, which varies by market.
Repair costs vary a lot and are impossible to predict. Offerpad lets you hire your own contractor to complete repairs, which may help you avoid getting overcharged. But some customers say Offerpad required them to use its contractor instead.
If you need to stay in your home after closing, Offerpad lets you stay up to three days for free.
Opendoor fees
Opendoor charges a 5% service fee for cash offers. If you list with an Opendoor agent through Offer Lock, you’ll have to pay a realtor commission, which varies depending on the market and individual agent. Total agent commission is traditionally around 5–6%.
Repair costs are based on an inspection and can vary a lot. Jesse Zappia sold to Opendoor and paid $5,700 for repairs on a $566,000 sale. But he told us that repair costs are "kind of a black box." Opendoor doesn’t explain much about how it calculates repair costs, and it doesn’t give you the option of hiring your own contractor.
Opendoor lets you stay in your home up to 17 days after closing, but you have to pay a daily market rate, which is usually around $100–400 per day. You’ll also have to pay a $2,000 security deposit.
Customer reviews
Offerpad | Opendoor |
---|---|
4/5 (2,758 reviews) | 4.2/5 (3,649 reviews) |
Offerpad reviews
Offerpad reviews online are generally positive. However, recent reviews are more negative, suggesting a possible downward trend in quality.
Customers are happy with Offerpad's convenience compared to selling with a realtor. As this seller noted:
We were a bit hesitant to use Offerpad because we always used Realtors before. Everything could not have gone more smoothly! ... This process went faster than selling the home with a realtor."
The best reviews are typically for List with Offerpad, which sellers use to list their home with an Offerpad agent. Offerpad’s agents generally get good marks, with this customer’s review being typical:
No other realtor I contacted would do as much as [Offerpad’s] did to get my home ready. His valuation of my property came within 1k of it's true appraised value."
However, sellers and buyers often claimed that Offerpad made poor repairs. This buyer’s complaint is similar to many others we found:
The plumbing in the kitchen is not done properly and certainly not by a licensed plumber. New cabinet doors were put on old cabinets and they are literally falling off or not aligned properly because of poor quality handling."
Opendoor reviews
Opendoor reviews are generally positive. However, like Offerpad, it has recently received more negative reviews than in the past, suggesting that customer satisfaction is declining.
Positive reviews note Opendoor's easy process and excellent customer service. These factors especially helped sellers in unique circumstances, such as this individual who sold an inherited property from out of state:
Using their services was the BEST decision for me. I was able to do everything virtually and if I needed to speak with anyone they were only a phone call or email away."
Speed was also a positive factor for many reviewers, with this seller’s experience being fairly typical:
The process was very easy to go through, and the closing on the sale occurred two weeks after signing the offer letter. I highly recommend Opendoor if you're not interested in the longer process of going the traditional route."
However, like Offerpad, Opendoor has a lot of complaints about the quality of its repairs. This customer’s experience is just one example of many:
They do the absolute minimum amount of work at the cheapest possible price in order to sell a house. The quality of workmanship in the home we purchased is horrible."
Several complaints also claim that Opendoor canceled contracts, leaving sellers relying on a quick sale in difficult situations.
For example, Nashville realtor Rebecca Richards told us about a client who sold to Opendoor only to have the company cancel their contract as they packed to move. Fortunately, the sellers got Opendoor to buy the house by agreeing to a $5,000 cut in the sale price. As Richards said:
It worked out, but I felt like my clients were jerked around."
Availability
Offerpad | Opendoor | |
---|---|---|
Locations | AZ, CO, FL, GA, IL, IN, KS, MO, NV, NC, OH, SC, TN, TX | AL, AZ, CA, CO, DC, FL, GA, ID, IN, KS, MA, MI, MN, MO, NC, NM, NV, NJ, NY, OH, OK, OR, SC, TN, TX, UT, VA |
Purchase criteria | Post-1950s constructionLot size up to 1 acreValued under $1 million | Post-1930s constructionLot size up to 2 acresValued under $1.4 millionOwner-occupied |
Where do Offerpad and Opendoor buy homes?
Offerpad is available in 24 markets across 14 states, which is slightly fewer markets than it had in the past. In 2023, the company increased its home purchases, but hasn’t announced plans to expand right away. Not all of its services are available in every state, including Offerpad Mortgage and bundled discounts.
Opendoor is available in 54 markets across 26 states and Washington, DC, making it the largest iBuyer in the country. Some services, such as Offer Lock, are only available in select areas.
What types of homes do Offerpad and Opendoor buy?
Offerpad purchase criteria
To sell to Offerpad, your home needs to be:
- In good condition
- Built after 1950
- A single-family home, including a townhome or condo
- Valued under $1 million
- On a lot no bigger than 1 acre
- With clear ownership
- Vacant on the close date
Offerpad also purchases single-family homes in gated and age-restricted communities. However, in age-restricted communities, it typically only buys homes worth up to $350,000.
Offerpad doesn’t buy properties that are mobile, manufactured, or prefabricated or that have significant foundation or structural issues.
Opendoor purchase criteria
To sell to Opendoor, your home needs to be:
- In good condition
- Built after 1930
- A single-family home or townhome (condos and duplexes are eligible in some areas)
- Valued under $1.4 million (most are $100,000–600,000)
- On a lot under 2 acres (1 or 1.5 acres in some areas)
- With clear ownership
- Owner-occupied or vacant at closing
Opendoor also buys single-family homes in age-restricted and gated communities, but only in certain areas. It also buys homes with solar panels if the panels are owned outright.
Opendoor won’t buy homes that:
- Are short sales or in foreclosure
- Have additions without proper permits
- Are in flood zones
- Have foundation or structural issues
- Have septic systems or wells
- Are built with dated materials
- Are damaged by fires, floods, or other natural disasters
Alternatives to using Offerpad or Opendoor
iBuyers struggled since 2022 because of rising interest rates and a slowing housing market. Offerpad and Opendoor survived by dramatically curtailing their purchases and downsizing their workforce.
While home purchases have increased for both Opendoor and Offerpad in 2023, they’re still far below what they were during the pandemic.
If iBuyers are available in your area and you need to sell fast, they’re certainly worth considering. But you might have a harder time qualifying for an offer now than you would have when the businesses were growing rapidly. If that's the case, here are some good alternatives.
Sell to a cash buyer
Cash buyers are a good alternative if you need to sell your house quickly. Like iBuyers, they can close in less than a month. They usually make lower offers, but they buy homes in poor condition as is.
'We buy houses' companies are a much better option than an iBuyer if you don't want to pay for necessary repairs. And because cash buyers operate in a lot more markets than iBuyers do, they’re sometimes the best available all-cash option.
Cash buyers may also offer more flexibility than iBuyers, and some — like Clever Offers — can offer creative solutions to unique selling solutions. For example, some cash buyers offer novation agreements where instead of buying your house outright, the buyer will renovate your house and list it on the open market. The repairs are then deducted from the final sale and you and the cash buyer split the proceeds of the sale.
However, there are a lot of cash home buyers to choose from, each with a different investing strategy. While most are reputable, there are some that are inexperienced or try to take advantage of sellers in difficult situations. You’ll have to thoroughly vet any cash buyer you’re considering. Alternatively, consider working with a service, like Clever Offers or Homelight Simple Sale, that has its own network of pre-vetted buyers.
Get an equity advance through a home trade-in service
Home trade-in services, like Knock and Orchard, allow you to buy your next house before you sell your current one. Unlike iBuyers, these companies advance you a bridge loan for the down payment on your new home by tapping into the equity of your existing home. You pay off the loan when your original house sells.
Trade-in services solve a common problem that many buyers have: only being able to afford a new home once they sell their old one. Plus, with a bridge loan, you have the cash to make your offers on homes more enticing. Trade-in services also ensure that you don't pay two mortgages at once.
Most trade-in services have a guaranteed cash offer. They buy your house if it doesn’t sell on the open market within a certain number of days, but the offer will likely be much less than your home's market value.
Trade-in services also come with brokerage fees, service or "program" fees, and other charges related to your bridge loan. The total costs can be far higher than traditional real estate transactions.
List on the MLS with an iBuyer's offer as backup
Selling on the open market with a realtor is almost always going to get you top dollar for your home. Even if timing is your main concern, you can find a realtor who can solicit fast cash offers or adjust their marketing strategy to your timeline. Traditional realtor commission is 5–6%, but you can use a discount brokerage to bring those fees down to 3.5–5%.
A realtor can also provide a free home valuation, so you know how your home's market value compares to iBuyers' offers. If you still can't sell by a certain date, you can use an iBuyer as a backup.
As realtor Barry Richards notes, "You're going to get the most money when you have people competing with each other, and that's going to happen when you list on the MLS. But you can use that iBuyer's offer as a baseline."
Using a realtor first and an iBuyer as a backup is more likely to get you a fair price for your home, while still getting the convenience of an iBuyer if you need it. The one drawback is that if the market changes suddenly, the final price an iBuyer offers might be lower than its initial one.