Opendoor promises to take the stress out of selling your home. Is that true? Well, as the old saying goes: There is no such thing as a free lunch.
What Is Opendoor?
Opendoor is a company that operates an online real estate marketplace. So far, the firm has taken in $1.5B in funding, which is quite a lot compared to other companies such as Clever Real Estate and HomeLight.
According to Opendoor’s website, there are two ways to sell your home through them. The first is to simply get a quick offer, in which they charge a 5% “service charge”. Essentially, they give you a fast offer for your home. This would be similar to what one of the We Buy Houses billboard’s does.
The other option is to simply list your home and use Opendoor as your brokerage. They charge 5%, which they claim is less than the “traditional” 6% fee. Of course, as we know, there is no set fee in real estate. Federal anti-trust law prohibits it.
How Old Is the Company?
The company was founded in 2014 and is based in San Francisco, California. The firm’s founders are listed as Eric Wu, Ian Wong, JD Ross, Keith Rabois.
What Is My Opendoor Review?
The best way for me to review Opendoor is to critique both of the divisions listed above.
First of all, on the direct offer for your home. As we have seen, many companies are trying to get into this space. That makes sense. Picking up homes from people who have to sell quickly can be very lucrative.
In that sense, it’s good for the consumer to have more competition from buyers. However, I recommend two alternatives to anyone who thinks they have to sell their home quickly. The first: Contact a local real estate agent and explain your situation. Putting your home on the market will generally get you the highest and fairest market value for your home.
Plus, many sellers think that they do not have enough time to go on the market, while in reality they may be able to sell their home in as little as eight weeks, or less.
Second, solicit offers from those in your area first. I have found that end-users and developers are generally willing to pay more for a home than an outside firm like Opendoor. After all, online companies’ risk tolerance is generally more conservative than someone who knows the local market.
The other side of Opendoor’s business, them as a brokerage, is trickier to review. They have only expanded to a few markets (not mine), so I have yet to see how they operate firsthand. I will say that what they charge is essentially no less than what I charge as a Coldwell Banker agent, so I am not sure what the benefit for the consumer is. They do appear to offer a slight discount if you buy and sell a home with them.
Overall, I would not recommend Opendoor to any client, besides those who have determined that they need to sell quickly. In which case, make sure to solicit as many offers from online and traditional parties as you can.
A lot of people gravitate towards online companies like Opendoor because they feel selling their home is complicated. It really is not. I created a free real estate education center where you can learn more. Check it out.