Opendoor is one of the leading iBuyers in the U.S. Qualified sellers who work with Opendoor can expect a sale that is fast and convenient; in fact, most properties receive a cash offering within 48 hours, and can close in as little as 14 days.
The main benefit of using Opendoor instead of a traditional realtor, is that you can sell your home on your own timeline. Furthermore, you won’t have to deal with the hassle or cost of getting your home prepared.
The trade-off is that Opendoor’s offer might be lower than what you’d be able to get on the open market. For some, the convenience might be worth the difference in earnings. But if maximizing profits is a priority, then Opendoor might not be right for you.
However, since requesting an offer from Opendoor is free and doesn’t require any commitments it’s doesn’t hurt to get see what they’ll pay for your home.
Read on for details about exactly how much Opendoor charges, how their services work, what kind of reviews they’ve has received from customers, and a definitive answer to the question of, “is Opendoor legit?”
Opendoor: Facts & Stats
|Service fee||Up to 5%*|
|Time to close||14 to 60 days|
|Locations||AZ, CA, CO, FL, GA, MN, NC, NV, OR, TN, TX, and UT|
|Eligible homes||• Single family homes or townhouses (duplexes and condos in some markets)|
• Values between $100,000 and $500,000
• Lots no larger than 0.5 acres
• Built after 1960
• Owner occupied
|Reviews||4.08 / 5 Avg rating across 860 reviews (as of 2/10/21)|
What Is Opendoor?
Opendoor isn’t just an iBuyer— they were the first iBuyer, pioneering the industry and its practices before competitors like Zillow and Offerpad followed in their footsteps. Today, they operate in over 20 markets across the U.S. and are backed by international investment giant Softbank.
When you sell your home with Opendoor, you don’t hire an agent, take photos of your home, list it, hold open houses, and deal with offers. You simply sell it straight to Opendoor, for cash.
Opendoor’s vision is to simplify the home selling process by becoming a one-stop shop for home sellers and buyers alike. Since their founding, they’ve expanded their business and now offer a comprehensive suite of real estate services including:
- Buying homes with cash offers (iBuying)
- Selling properties through their listing portal
- Trade-in services for homeowners
- Connecting sellers with real estate agents
- Home loans
Opendoor’s fee is 5% of your homes sale price, which is slightly lower than a conventional real estate commission of 6%. Historically, Opendoor’s fee has been as high as 14%, and they reserves the right to adjust their fee if market conditions worsen.
However, the service charge isn’t the only cost you incur if you use Opendoor. You’ll also pay:
- Seller closing costs: typically amount to 1-3%.
- Repairs: varies depending on your home’s condition
If you sell your home to Opendoor, you’re looking at a total cost of about 6-10% all-in. Here’s how that cost breaks down for a $300,000 home:
|Home sale price||$300,000|
|Opendoor’s fee (5%)||$15,000|
|Seller closing costs (1-3%)||$3,000-9,000|
|Total cost (6-10%)||$18,000-24,000|
Also, keep in mind that with Opendoor, you’d be giving up on the possibility of having multiple potential buyers driving up the price with competing offers. This may lead to higher net earnings from your home’s sale.
How Does Opendoor Work?
If you own a home or are looking to buy, Opendoor offers three services that may be of interest to you:
- Selling to Opendoor
- Buying from Opendoor
- Trading-in with Opendoor
Let’s look at a typical process for each area of service.
Selling to Opendoor
A seller initiates the sale by putting in a request on Opendoor’s website. You’ll simply provide your address, and some basic information about your property’s size, condition, and features.
Opendoor then evaluates your home. If your property qualifies, they’ll formulate on offer based on their proprietary analytics, and input from local pricing experts. Typically, they deliver their offer within 24 hours.
Not all homes will receive an Opendoor offer. They’re typically only interested in buying new homes that are in the middle of the price range. Below, we’ve provided the full list of specifications for what Opendoor looks for in homes:
|Home types||• Single family|
• Duplexes and condos in certain markets
|Lot size||Up to 0.5 acres|
|Year built||After 1960|
Opendoor will not present an offer for your home if it is a mobile/prefabricated home or located in a flood zone.
If you accept Opendoor’s offer, they’ll send an estimator to your home to confirm the information you submitted, and evaluate the condition of your home.
Opendoor may require repairs before the purchase — you’ll have a choice between:
- Deducting the cost of the repairs from the sale price
- Doing the repairs yourself
If you opt to do them yourself, the final product must be approved by Opendoor.
It’s important to note that Opendoor’s final offer may be lower than their initial estimate, depending on what the estimated repair costs are.
Once you’ve come to a mutual agreement, you’ll choose your closing date. You’ll be able to close in as few as 14 days, or as many as 60 days, so you’ll have no trouble coordinating your move to your next home.
Buying from Opendoor
Buying a home from Opendoor starts by looking at their properties via the Opendoor app.
If you find a property you like, you can arrange a showing any day of the week between 6am and 9pm.
Opendoor uses lockboxes that allow you to do an independent, unassisted showing, although you do have the option of scheduling a showing with a tour assistant, if you’d like.
Once you settle on a property, Opendoor will pair you with one of their “Trusted Lenders,” who can potentially save you up to $1,000 on your financing. Alternatively, you can find your own lender.
You can make an offer online, through the app, or through an agent. If you decide on an unagented transaction, Opendoor will help you navigate the closing process.
Finally, you choose a closing date. In some markets, buyers are also eligible for a buyer’s rebate of up to 1%, if they meet certain conditions.
Opendoor offers a 90-day buyback guarantee, for a 3% fee, so if you’re unsatisfied with your purchase, you can back out within three months.
Trade-ins are fairly simple; as you initiate a home sale to Opendoor, you should choose a home to purchase, either from Opendoor’s offerings, or from the open market. Both transactions have to take place within a month to qualify for a trade-in.
You’ll have to close on both homes simultaneously; in certain Opendoor markets, you’ll be eligible for 1.25% in additional proceeds of the sale price of your current home (up to $10,000).
During closing, you’ll be able to coordinate your move-out and move-in dates so you can move seamlessly from one home to another.
Where Does Opendoor Buy Homes?
Opendoor is currently purchasing homes in the following markets:
- Phoenix, AZ
- Tucson, AZ
- Los Angeles, CA
- Riverside, CA
- Sacramento, CA
- San Diego, CA
- Denver, CO
- Jacksonville, FL
- Orlando, FL
- Tampa, FL
- Atlanta, GA
- Minneapolis-St. Paul, MN
- Las Vegas, NV
- Asheville, NC
- Charlotte, NC
- Raleigh-Durham, NC
- Portland, OR
- Nashville, TN
- Austin, TX
- Dallas-Fort Worth, TX
- Houston, TX
- San Antonio, TX
- Salt Lake City, UT
Opendoor doesn’t offer their full spectrum of services in every market. You cannot directly buy their homes in Asheville, NC; Salt Lake City, UT; and San Diego, CA.
Is Opendoor Worth It?
Opendoor’s fair offers, low fees, and convenience make them worth considering if you’re selling a home in a market where they operate.
Selling to an iBuyer comes with some potential drawbacks. When you sell a home in the traditional way, it’s likely you’ll have interest from multiple buyers, which can drive up the price, sometimes dramatically. When you sell to an iBuyer, this competitive aspect is completely absent; Opendoor’s offer is final and static.
That being said, Opendoor offers are generally in line with fair market value. One 2019 report found that Opendoor’s offers we’re typically 98.6% of the fair market value. So you’d be getting less than you might get if you sold with an agent, but it’s not a low-ball offer like you might get from other cash buyers.
If price is a concern, one option to consider is a full-service agent that offers a lower commission fee. We’ve partnered with Clever to offer top-rated agents who work for 1% or $3000, depending on the price of your home.
With these agents you’ll sell for top dollar and save money along the way, resulting in the highest net profit possible.
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Is Opendoor Legit?
Yes, Opendoor is legit.
Opendoor’s fees represent their carrying and resale costs; after all, their business model is to turn around and sell your house. Every day that Opendoor owns a home, while they look for a buyer, costs them money in taxes, marketing, utilities, etc.
Opendoor purchases homes at much higher volume than it’s competitors, operating at a rate of about 1,400 home per month. Their sheer size means they can afford to extend the fairest cash offers, since they can make up in volume what they may leave on the table in individual transactions.
Opendoor is a modern, tech-savvy company with national reach, and is much more legitimate than the companies who put up “We Buy Houses for Cash” signs on telephone poles.
Comparing Opendoor to Its Competitors
Sellers who want to bypass the traditional market have a lot of options these days; since Opendoor pioneered the iBuyer industry, dozens of competitors have appeared.
So how does Opendoor compare to the competition? Let’s look at the main differences between Opendoor and some of their main competitors.
Opendoor vs. Knock
Knock has essentially taken the concept of the Opendoor trade-in, and radically expanded it.
When you sign with Knock, they offer an integrated, start-to-finish home trade-in. Once they assess the home you’re selling, they find a new home for you, arrange financing, and purchase it with their own money.
Using Knock enables you to make non-contingent offers, which can be especially valuable in markets where home’s are moving quickly and receiving bids from multiple buyers.
Knock’s fee for all this? A quite reasonable 1.25% convenience fee. However, you still have to pay all of the typical seller closing costs and agent fees.
The bottom line: While they only operate in a few select markets— Atlanta, Charlotte, Raleigh, Durham, Dallas-Ft. Worth, and Phoenix— they’re a great option for homeowners who are committed to doing a “home trade.”
Opendoor vs. Zillow Offers
Zillow Offers is similar to Opendoor, but there are some differences — a few of them quite small, and some of them quite substantial.
On the surface, Zillow Offers operates similarly to Offerpad; they give you a cash offer within a short time frame (if you qualify), they inspect and may ask for repairs, and the seller can choose their closing date.
However, there are two key factors to point out with Zillow Offers’s service:
- They take slightly longer to extend an offer— two days, compared to Offerpad’s one.
- They charge more, averaging a fee of around 2.5% plus 6% in selling costs, compared to Offerpad’s 5% fee
The bottom line: If you’re looking to close quickly and save money on fees, then Opendoor will be a better option Zillow Offers.
Opendoor vs. Offerpad
Offerpad is probably the most similar company to Opendoor. They use a very similar business model— cash offers within 24 hours, inspection and repairs possibly mandated, fast closing— with a couple important differences.
The first difference is that Offerpad costs more than Opendoor. While Opendoor’s fees average 5%, Offerpad’s fees average 7%. That 2% may not sound like much, but if you buy a $500,000 house, that’s $10,000.
The second difference is that they operate in different markets from Opendoor. Depending on where you live, you may not have a choice between the two. You can see a complete list of Offerpad’s markets here.
The biggest difference between the two services is their customer reviews. While Opendoor’s reviews are generally positive, Offerpad’s are — by and large — pretty negative.
The bottom line: Unless Offerpad presents you with a much higher offer for your home, Opendoor will be a better choice.
Opendoor has good reviews on REVIEWS.io— a 4.08-out-of-5 star rating, based on 860 reviews. Positive reviewers singled out ease of process, the convenience of scheduling self-showings, the buyer’s rebate, detailed sale reports, and attentive communication.
Negative reviews mentioned low offers, and allegedly sub-standard repairs in homes purchased from Opendoor.
Opendoor has mediocre reviews on Yelp, with a 2-out-of-5 star rating based on 22 reviews. Some reviewers mention high fees, while others mention transactions that fell apart, or difficulties with communication.
Opendoor has received 75 complaints through the Better Business Bureau website, which is a moderately high number.
Surveying the complaints, some recurring themes are from buyers who find allegedly sub-standard repairs in their new home, buyers who claim their sale fell through at the last minute, app users who claim their information was sold to third parties, and general complaints about high fees.
Opendoor seems very communicative in their responses, and willing to resolve problems, even when those problems result from buyers or sellers who may have failed to read the fine print. Before you enter into any transaction— with Opendoor or any other company— make sure you fully understand the terms and fees.
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