Offerpad vs. Opendoor: Which iBuyer Should You Use in 2023?

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  Written by Michael Warford

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  Edited by Jessica Johansen

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 charges lower fees, 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 for each home.

Before selling to an iBuyer, you should compare multiple offers. Also ask a few realtors if they could help you sell faster and easier the traditional way.

Quickly find and compare cash offers

If you want a quick and convenient cash home sale, Clever Offers is a great place to start.

Clever’s free service matches you with a top local realtor, who helps you screen and compare offers from cash investors and iBuyers in your area. You also get a free professional home valuation, so you can compare each cash offer against your home’s true market value.

💸 Get free, no-obligation cash offers from top local buyers.

Offerpad vs. Opendoor: Which is better?

Which iBuyer is better depends on your priorities. Here’s a comparison of the most important factors.

Both iBuyers make similar offers

Since the real estate market slowed in 2022, Opendoor and Offerpad have become more conservative with their offers. 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 has lower fees

Opendoor’s 5% service fee is lower than Offerpad’s 6%. While a 1% difference may not sound like much, on a real estate transaction it can be thousands of dollars.

The other big expense is repairs, but it’s impossible to predict which company will charge less for your home’s repairs.

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.

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 than 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.

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 only buy homes that are ready to sell or close to it. However, Offerpad buys houses built as long ago as 1930 (compared to Opendoor’s 1960 cutoff). It also buys condos and homes in gated communities and age-restricted communities. Opendoor considers these types of properties, but only 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 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.

Tennessee and Kentucky 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 + Loan.

Buying with Offerpad

There’s only one way to buy a home with Offerpad, and it’s similar to buying the traditional way.

Selling with Opendoor

Opendoor has several options for sellers, ranging from iBuying to a traditional sale with a realtor.

Buying with Opendoor

You can buy similar to the traditional way, or, if you live in Austin or Dallas–Fort Worth, you can sell through Opendoor Exclusives.

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.

Opendoor’s median purchase price used to be more than Offerpad’s. But now in 2023, its offers are closer to Offerpad’s.

What fees do Offerpad and Opendoor charge?

Offerpad fees

If you take Offerpad’s cash offer, you pay a 6% 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 instead, you pay a 5% total commission, which is about average for traditional realtors.

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.

Customer 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

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 is dramatically increasing purchases and looking to expand. 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. The company continues to expand into new markets. Some services, such as List with Opendoor, 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 1960
• 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 $325,000.

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 in the past year because of rising interest rates and a slowing housing market. Offerpad and Opendoor survived by dramatically curtailing their purchases and downsizing their workforce.

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 more stable. If that’s the case, here are some good alternatives.

Sell to a cash buyer

Cash buyers are a good alternative if you want to sell 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.

A cash buyer is 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.

When getting a cash offer — whether from an iBuyer or a cash buyer — shopping around is key. We recommend using Clever Offers to easily compare offers. A Clever concierge will field offers from multiple investors and iBuyers so you can choose the best one.

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 value.

Trade-in services also come with another cost. On top of traditional realtor fees, you need to pay service fees and other charges. The total costs can be 10—15%, 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.

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.