Published
Opendoor fees | Hidden costs | Opendoor vs. realtor fees | Opendoor vs. Competitor fees | Is Opendoor worth it? | FAQs
Opendoor charges a service fee of 5% in exchange for the convenience of a fast, guaranteed cash sale and no home prep or showings. The service fee is roughly in line with what you’d pay in realtor commission on a traditional house sale.
But the trade-off for this convenience is profit. Opendoor’s final offers are typically lower than what you’d get by listing with a real estate agent. Opendoor also deducts repair estimates from your final offer. This can significantly reduce the amount of money you take home after you close.
While Opendoor used to offer close to or even more than fair market value, that is rarely the case today. Research by real estate analyst Mike DelPrete shows that as of 2023, Opendoor has significantly scaled back the competitiveness of its offers.
While Opendoor can still be a good choice for some sellers, you should compare your options before using its services. Selling with a realtor or even to another cash buyer may be a better solution, depending on your timeline and specific needs as a seller.
What fees does Opendoor charge?
Opendoor fees | Cost |
---|---|
Service fee | 5% |
Closing costs | 1-3% |
Late checkout (optional) | $100–400/day + $2,000 security deposit |
Repair costs | 1-2% minimum |
Total cost | 7-10% (plus late checkout fees, if needed) |
Service fee
Opendoor’s service fee is 5% for cash offers, which is the same as what its main rival, Offerpad, charges. The 5% fee is also comparable to the total realtor commission you’d pay if you sold the traditional way with an agent.
Repair costs
Opendoor’s repair costs can be a significant expense and, unfortunately, they vary a lot. While it’s difficult to predict exactly how much Opendoor will charge you for repairs, sellers we’ve talked to have been charged roughly 1–3%. Recently, we’ve found an increase in the number of complaints concerning unreasonable repair costs, so you may be charged closer to the upper end of that range.
Repair costs are taken out of closing and the repairs won’t be completed until after you move out. And some sellers complain that Opendoor doesn’t actually make the repairs it charges you for. The estimate is based on photos and videos you provide of your home, a virtual walkthrough, and an exterior inspection.
Closing costs
Closing costs are around 1–3%, which is the same as what you’d pay in a traditional sale. Closing costs include items like attorney fees, title insurance, transfer taxes, and prorated property taxes.
Late checkout
Late checkout is an optional expense incurred if you need to stay in your house for up to 14 days after closing. The amount is based on your home’s value, so it will vary, but our research shows that it’s generally $100–400 per day.
Late checkout also requires a $2,000 security deposit, which is returned to you after you move out.
Total fees
Opendoor’s total fees add up to around 7–10% plus late checkout fees of $100–400 per day if needed. While most sales to Opendoor will fall within that range, in some cases you may end up paying more than 10%. This is more likely to happen if your repair estimates are especially high.
Are there hidden costs when selling to Opendoor?
Opendoor doesn’t charge hidden fees, but its final offers can be dramatically lower than its preliminary offers. These lower offers are also on top of repair estimates, which many Opendoor reviewers claim are high.
As one reviewer who got a quote from Opendoor in July 2023 explains, “Initial offer $750k. Did video walkthrough and physical walkthrough. Final offer $640k, and $30k in repairs on top of that.”
These lower offers can be upsetting for sellers who expect the final offer to be close to the preliminary one. In fact, some sellers may have even taken steps to move based on their preliminary offer, such as arranging a move-in date for their new home.
As one Reddit user claims, “iBuyers will make you a nice offer, so you put plans in motion. Then they’ll come back and ask for significant discounts.” By the time you get to the inspection and your final offer, it may feel harder to walk away.
However, you are free to reject Opendoor’s offer at any time for no cost. If Opendoor doesn’t meet your expectations, get offers from other cash buyers. Or you can choose to list with a realtor instead, which will likely get you the most money for your sale.
Compare fair cash offers from iBuyers and investors to the sale price you’d get with an agent.
Opendoor fees vs. typical home selling costs
Opendoor’s fees are similar to the fees that you’d pay in a typical home sale with a realtor. However, the major difference is that while listing with a realtor will likely net you fair market value, Opendoor’s offer will be less. As a result, your final net profit on your sale will likely be lower with Opendoor.
For example, DelPrete recently found one example of a home estimated to be worth $587,242 on Zillow that received a preliminary offer of just $538,300 from Opendoor. Here’s how the fees and net profit for that property may have broken down depending on whether the seller sold to Opendoor or the traditional way:
Costs of selling to Opendoor | Costs of selling with a realtor |
---|---|
Offer price: $538,300 | Offer price: $587,242 |
Service fee: 5% | Realtor commission: 5–6% |
Repair costs: 1–2% | Home prep costs: 1–2% |
Closing costs: 1–3% | Closing costs: 1–3% |
Net profit: $484,470–500,619 | Net profit: $522,645–546,135 |
Source: Mike DelPrete. Opendoor Recalibrates to a New Environment. May 18, 2023.
While fees are mostly comparable between Opendoor and a typical sale, your final net profit could differ by tens of thousands of dollars. While you won’t have to pay for home prep fees like photography and staging with Opendoor, your repair estimate may be just as high as, if not higher than, home prep fees.
Missing hardware on cabinets, chipped countertops, and bold accent walls that might need to be repainted are all examples of items Opendoor would charge a repair credit for (see more examples here) — whereas buyers in a competitive market might let these items slide.
On top of a higher sale price, you can save significantly with a realtor compared to Opendoor by choosing a discount broker. The best discount brokerages offer the same level of service as a full-cost real estate agent. However, they can save sellers thousands on the realtor commission through pre-negotiated rates with top local listing agents. Listing commission for a discount realtor is around 1.5% versus the typical 3%.
Opendoor fees vs. competitors’
Opendoor’s fees are similar to what competitors, such as Offerpad, charge. Both Offerpad and Opendoor have a service fee of 5%. However, while Opendoor charges a daily fee if you want to stay in your home after closing, Offerpad does not. On the other hand, Offerpad charges a 1% cancellation fee, while Opendoor lets you cancel for free.
Investors and other companies that buy houses for cash typically don’t charge service fees. However, they often pay significantly under market value, so they’re not necessarily a better deal than Opendoor. They’re typically only a good option if you’re trying to sell a distressed property or you need to sell your house fast and you’re outside of Opendoor’s service area.
Local cash buyers can also be worthwhile for more tailored solutions as they’re usually more open to negotiating than Opendoor is. For example, some local investors may be able to offer creative financing solutions or a novation agreement.
Under a novation agreement, the buyer fixes up your property first in order to list it on the open market. The seller and buyer then split the proceeds once the house has been listed and sold. This way, you can avoid investing in costly, time-consuming repairs while still taking advantage of the higher selling price the open market usually fetches.
Regardless of whether you choose Opendoor or one of its competitors, you should compare all the options in your area first. That way you maximize your chances of selling on your timeline and for a fair price.
Bottom line: Is selling to Opendoor worth it?
Opendoor is worth it if you’re willing to sacrifice a higher selling price in order to sell quickly and with few hassles.
As one person who was considering using Opendoor says, “I’m looking to close 3 weeks from now and am okay losing a little bit of equity in the process.” If you’re likewise pressed for time or don’t want to deal with showings, Opendoor may be a good option.
But that convenience means you likely won’t get as much as you would selling with a realtor on the open market. Plus, even if you want to use Opendoor, there’s no guarantee your home will meet their eligibility requirements.
Before making a decision, compare all of your options, including selling with a realtor or to another cash buyer. If you live in a seller’s market, a realtor may be able to help you close almost as quickly as a cash buyer like Opendoor could.
Even if you decide that a cash buyer is right for you, Opendoor isn’t always the best option. You should see what other companies and investors are offering in your area to make sure you get the best deal possible.
FAQs about Opendoor fees
Does Opendoor charge hidden fees?
Opendoor doesn’t charge hidden fees. However, its final offer may be substantially lower than its preliminary offer. Repair costs can also be very difficult to predict and can end up taking a very large chunk out of your final sale proceeds.
Does Opendoor pay closing costs?
No, when you sell to Opendoor, you’ll still need to pay standard closing costs, such as title insurance, transfer taxes, and prorated property taxes. Closing costs are around 1–3%.
Is Opendoor's price negotiable?
Opendoor’s price is usually non-negotiable. However, if you believe they’ve missed something important in their assessment of your property value or you’ve found another iBuyer willing to offer more, Opendoor may be open to adjusting their offer.
Why would you sell to Opendoor?
Opendoor offers a flexible closing window of 14–60 days and allows you to skip the hassles of a traditional sale, like home prep and showings. The fees are also comparable to what you’d pay by listing with a realtor, although you’ll sell for less overall with Opendoor. Many people feel the convenience of selling to Opendoor is worth the lower sale price.
Related reading
Opendoor Reviews: Ratings, How it Works, and FAQs. Looking for a hassle-free way to sell your home? Opendoor makes near-instant cash offers and can close fast. Learn more.
What Is An iBuyer? How iBuying Works, & More! iBuyers are companies that use technology and data to give home sellers fast cash offers. Learn how iBuying works and which companies are the best.
Who Pays for a Home Inspection? (And Why?) Home buyers usually pay for a home inspection. The cost can vary by location, but you might also need specialized inspections.
Leave a Reply