what is your experience of using Opendoor for buying or selling your home?

Questions on how we spend our money and our time - consumer goods and services, home and vehicle, leisure and recreational activities
Post Reply
Topic Author
sabhen
Posts: 360
Joined: Sat Feb 27, 2016 12:03 am

what is your experience of using Opendoor for buying or selling your home?

Post by sabhen »

I like to ask members of thsi forum to share their experience with buying or selling their home via companies such as opendoor.

It seems painless on the surface, you get an estimate online and then a walk-through video via zoom for a firm estimate.

Is it really that simple? are there any pitfalls or issues that I am not aware of compared with the traditional route of working via a regular RE agent?
User avatar
rocket354
Posts: 679
Joined: Mon Dec 14, 2015 11:31 am

Re: what is your experience of using Opendoor for buying or selling your home?

Post by rocket354 »

Hi, I recently sold one house, and am under contract to sell another. I got offers from Offerpad, Opendoor, and RedfinNow. I went with RedfinNow for both sales, but I can summarize my experiences with all three in case that helps at all.

For house #1, RedfinNow had by far the highest initial offer, so I did not followup with Opendoor or Offerpad and went with them. It just closed last week and everything went pretty smoothly. I think I got a higher price than the market would have given me.

For house #2 (the one still under contract) I got offers from all three. Opendoor was the highest, but RedfinNow was close, so I went went to the inspection with both.

For Opendoor, I just had to walk around the inside and outside of the house for 10-15 mins taking videos and upload them on their portal. Then, the next day, they had someone come out to do an exterior "evaluation" which only lasted about 20 mins. After that they gave an updated offer which was slightly higher, but also now included their repair costs which was almost exactly the same amount as the increase. So the net offer stayed the same, despite having some requested repairs. Time from inspection to updated final offer was about 24 hrs.

For RedfinNow, they did a full inspection (which they paid for) which also included a complete 3D imaging of the property. All of this took 3+ hours, so was a bit of a pain, but they paid for it, and there was no obligation if were to back out.

Opendoor would not budge at all on their offer. RedfinNow negotiated some with house #1, and then with house #2 I mentioned to them that Opendoor had a higher offer and they came back within hours with a offer that was slightly higher in the nominal sales price, with a slightly lower repair cost, and they offered to cover all closing costs, netting me an extra 1.5% in my pocket over Opendoor's offer. (Technically, *should* net me after we close.)

Also, RedfinNow's contract goes binding after an inspection period (10 days) while Opendoor has a flat $1250 earnest money deposit for their liability. So while you can back out at any time, they can also back out at any time and only owe you the $1250. For me, that was too stressful since I'd be leaving my home off the market and not fixing it up to get ready to either sell or rent, so my damages would be much higher if they backed out late in the game. So even if all else was just even, I would have taken RedfinNow just because they couldn't back out on a whim.

That said, Opendoor was professional the entire time, and kept to their word and I would have had no problem signing with them if they'd had the higher offer.

For what it's worth, Offerpad was the lowest offer each time, and, while polite, seemed to have the highest pressure sales techniques. They tried to convince me that their lower offer before they even decided repair costs was actually better than the other offers which were still higher after repair costs. They also, from what I've read, charge you if you back out after the inspection period (which I did not do with them). Overall, I felt that I would not want to deal with them in general.

Hopefully this helps some.
Sam_957
Posts: 164
Joined: Tue Oct 27, 2020 7:04 pm
Location: USA

Re: what is your experience of using Opendoor for buying or selling your home?

Post by Sam_957 »

I bought from them but later looked into selling. The fees end up being high and you may not get a competitive price. They are hoping you’ll trade a few 10k for convenience and less worry. They will sell the house within a few months and profit from the actual market price.
My other vehicle is an index fund.
User avatar
orcycle
Posts: 238
Joined: Mon Jul 11, 2011 9:44 am

Re: what is your experience of using Opendoor for buying or selling your home?

Post by orcycle »

I sold a rental property to Opendoor in 2019. They were upfront about everything, no last-minute surprises, it all went very smoothly. Their fees are high but their original offer seemed to be above-market at the time, so I am pretty happy with the outcome.

I used to update their offers on another rental property but recently their website said they couldn’t make an offer (after several declines in offer prices), but I would probably go with a traditional realtor this time.
bob60014
Posts: 3768
Joined: Mon Jul 31, 2017 8:59 pm
Location: The Land Beyond ORD

Re: what is your experience of using Opendoor for buying or selling your home?

Post by bob60014 »

If you need to ask the question, they might not be for you.
London
Posts: 722
Joined: Sun Dec 11, 2016 10:50 am

Re: what is your experience of using Opendoor for buying or selling your home?

Post by London »

rocket354 wrote: Thu Jun 16, 2022 5:14 pm Hi, I recently sold one house, and am under contract to sell another. I got offers from Offerpad, Opendoor, and RedfinNow. I went with RedfinNow for both sales, but I can summarize my experiences with all three in case that helps at all.

For house #1, RedfinNow had by far the highest initial offer, so I did not followup with Opendoor or Offerpad and went with them. It just closed last week and everything went pretty smoothly. I think I got a higher price than the market would have given me.

For house #2 (the one still under contract) I got offers from all three. Opendoor was the highest, but RedfinNow was close, so I went went to the inspection with both.

For Opendoor, I just had to walk around the inside and outside of the house for 10-15 mins taking videos and upload them on their portal. Then, the next day, they had someone come out to do an exterior "evaluation" which only lasted about 20 mins. After that they gave an updated offer which was slightly higher, but also now included their repair costs which was almost exactly the same amount as the increase. So the net offer stayed the same, despite having some requested repairs. Time from inspection to updated final offer was about 24 hrs.

For RedfinNow, they did a full inspection (which they paid for) which also included a complete 3D imaging of the property. All of this took 3+ hours, so was a bit of a pain, but they paid for it, and there was no obligation if were to back out.

Opendoor would not budge at all on their offer. RedfinNow negotiated some with house #1, and then with house #2 I mentioned to them that Opendoor had a higher offer and they came back within hours with a offer that was slightly higher in the nominal sales price, with a slightly lower repair cost, and they offered to cover all closing costs, netting me an extra 1.5% in my pocket over Opendoor's offer. (Technically, *should* net me after we close.)

Also, RedfinNow's contract goes binding after an inspection period (10 days) while Opendoor has a flat $1250 earnest money deposit for their liability. So while you can back out at any time, they can also back out at any time and only owe you the $1250. For me, that was too stressful since I'd be leaving my home off the market and not fixing it up to get ready to either sell or rent, so my damages would be much higher if they backed out late in the game. So even if all else was just even, I would have taken RedfinNow just because they couldn't back out on a whim.

That said, Opendoor was professional the entire time, and kept to their word and I would have had no problem signing with them if they'd had the higher offer.

For what it's worth, Offerpad was the lowest offer each time, and, while polite, seemed to have the highest pressure sales techniques. They tried to convince me that their lower offer before they even decided repair costs was actually better than the other offers which were still higher after repair costs. They also, from what I've read, charge you if you back out after the inspection period (which I did not do with them). Overall, I felt that I would not want to deal with them in general.

Hopefully this helps some.
Posts like this are why I come to this board. Great informative reply. And this isn’t even a topic I particularly care about.
Topic Author
sabhen
Posts: 360
Joined: Sat Feb 27, 2016 12:03 am

Re: what is your experience of using Opendoor for buying or selling your home?

Post by sabhen »

Invaluable infos. Thanks a lot.
MGBMartin
Posts: 1145
Joined: Thu Nov 04, 2021 11:09 am

Re: what is your experience of using Opendoor for buying or selling your home?

Post by MGBMartin »

London wrote: Thu Jun 16, 2022 7:51 pm
rocket354 wrote: Thu Jun 16, 2022 5:14 pm Hi, I recently sold one house, and am under contract to sell another. I got offers from Offerpad, Opendoor, and RedfinNow. I went with RedfinNow for both sales, but I can summarize my experiences with all three in case that helps at all.

For house #1, RedfinNow had by far the highest initial offer, so I did not followup with Opendoor or Offerpad and went with them. It just closed last week and everything went pretty smoothly. I think I got a higher price than the market would have given me.

For house #2 (the one still under contract) I got offers from all three. Opendoor was the highest, but RedfinNow was close, so I went went to the inspection with both.

For Opendoor, I just had to walk around the inside and outside of the house for 10-15 mins taking videos and upload them on their portal. Then, the next day, they had someone come out to do an exterior "evaluation" which only lasted about 20 mins. After that they gave an updated offer which was slightly higher, but also now included their repair costs which was almost exactly the same amount as the increase. So the net offer stayed the same, despite having some requested repairs. Time from inspection to updated final offer was about 24 hrs.

For RedfinNow, they did a full inspection (which they paid for) which also included a complete 3D imaging of the property. All of this took 3+ hours, so was a bit of a pain, but they paid for it, and there was no obligation if were to back out.

Opendoor would not budge at all on their offer. RedfinNow negotiated some with house #1, and then with house #2 I mentioned to them that Opendoor had a higher offer and they came back within hours with a offer that was slightly higher in the nominal sales price, with a slightly lower repair cost, and they offered to cover all closing costs, netting me an extra 1.5% in my pocket over Opendoor's offer. (Technically, *should* net me after we close.)

Also, RedfinNow's contract goes binding after an inspection period (10 days) while Opendoor has a flat $1250 earnest money deposit for their liability. So while you can back out at any time, they can also back out at any time and only owe you the $1250. For me, that was too stressful since I'd be leaving my home off the market and not fixing it up to get ready to either sell or rent, so my damages would be much higher if they backed out late in the game. So even if all else was just even, I would have taken RedfinNow just because they couldn't back out on a whim.

That said, Opendoor was professional the entire time, and kept to their word and I would have had no problem signing with them if they'd had the higher offer.

For what it's worth, Offerpad was the lowest offer each time, and, while polite, seemed to have the highest pressure sales techniques. They tried to convince me that their lower offer before they even decided repair costs was actually better than the other offers which were still higher after repair costs. They also, from what I've read, charge you if you back out after the inspection period (which I did not do with them). Overall, I felt that I would not want to deal with them in general.

Hopefully this helps some.
Posts like this are why I come to this board. Great informative reply. And this isn’t even a topic I particularly care about.
Me too.
That really was a great post, very informative.
Thanks for sharing your experience
Bad spellers of the world untie | Autocorrect is my worst enema
Auream
Posts: 630
Joined: Thu Mar 20, 2008 1:07 pm
Location: Raleigh, NC

Re: what is your experience of using Opendoor for buying or selling your home?

Post by Auream »

It’s possible that this won’t be happening anymore now that the market is cooling in many areas, but almost everyone around me who sold to OpenDoor or Redfin was kicking themselves when they saw how much higher the company flipped the house for. Worst example is a house I looked at back in March. Was sold to Redfin around February 1st for $600k. Appeared to have new carpet installed by RedFin but nothing else. Closed mid-April for $775k. Original seller made a $175k blunder selling to RedFin.
Tavistock1
Posts: 309
Joined: Thu Feb 06, 2020 10:57 am

Re: what is your experience of using Opendoor for buying or selling your home?

Post by Tavistock1 »

While I agree that these companies can sometimes be beneficial to consumers, having been an active realtor for decades I can see that there’s a reason why the industry of “full time brokers” exists. The seller is paying, like P&G and frito lay pay for shelf space in the supermarket, for “top shelf” exposure to gain the widest buying audience. We can argue about commissions ( negotiable) but I will say that when one of my kids sells a home, it’ll be with an experienced, successful Realtor.
UNCHEEL
Posts: 209
Joined: Fri Dec 18, 2015 8:36 am

Re: what is your experience of using Opendoor for buying or selling your home?

Post by UNCHEEL »

I love the commercials that hype how you can get a cash offer and sell you house to them "stress-free."
Personally, I'm in the camp that leaving $100k on the table is stressful.
AlphaLess
Posts: 3409
Joined: Fri Sep 29, 2017 11:38 pm
Location: Kentucky

Re: what is your experience of using Opendoor for buying or selling your home?

Post by AlphaLess »

London wrote: Thu Jun 16, 2022 7:51 pm
rocket354 wrote: Thu Jun 16, 2022 5:14 pm Hi, I recently sold one house, and am under contract to sell another. I got offers from Offerpad, Opendoor, and RedfinNow. I went with RedfinNow for both sales, but I can summarize my experiences with all three in case that helps at all.

For house #1, RedfinNow had by far the highest initial offer, so I did not followup with Opendoor or Offerpad and went with them. It just closed last week and everything went pretty smoothly. I think I got a higher price than the market would have given me.

For house #2 (the one still under contract) I got offers from all three. Opendoor was the highest, but RedfinNow was close, so I went went to the inspection with both.

For Opendoor, I just had to walk around the inside and outside of the house for 10-15 mins taking videos and upload them on their portal. Then, the next day, they had someone come out to do an exterior "evaluation" which only lasted about 20 mins. After that they gave an updated offer which was slightly higher, but also now included their repair costs which was almost exactly the same amount as the increase. So the net offer stayed the same, despite having some requested repairs. Time from inspection to updated final offer was about 24 hrs.

For RedfinNow, they did a full inspection (which they paid for) which also included a complete 3D imaging of the property. All of this took 3+ hours, so was a bit of a pain, but they paid for it, and there was no obligation if were to back out.

Opendoor would not budge at all on their offer. RedfinNow negotiated some with house #1, and then with house #2 I mentioned to them that Opendoor had a higher offer and they came back within hours with a offer that was slightly higher in the nominal sales price, with a slightly lower repair cost, and they offered to cover all closing costs, netting me an extra 1.5% in my pocket over Opendoor's offer. (Technically, *should* net me after we close.)

Also, RedfinNow's contract goes binding after an inspection period (10 days) while Opendoor has a flat $1250 earnest money deposit for their liability. So while you can back out at any time, they can also back out at any time and only owe you the $1250. For me, that was too stressful since I'd be leaving my home off the market and not fixing it up to get ready to either sell or rent, so my damages would be much higher if they backed out late in the game. So even if all else was just even, I would have taken RedfinNow just because they couldn't back out on a whim.

That said, Opendoor was professional the entire time, and kept to their word and I would have had no problem signing with them if they'd had the higher offer.

For what it's worth, Offerpad was the lowest offer each time, and, while polite, seemed to have the highest pressure sales techniques. They tried to convince me that their lower offer before they even decided repair costs was actually better than the other offers which were still higher after repair costs. They also, from what I've read, charge you if you back out after the inspection period (which I did not do with them). Overall, I felt that I would not want to deal with them in general.

Hopefully this helps some.
Posts like this are why I come to this board. Great informative reply. And this isn’t even a topic I particularly care about.
+100!
I don't carry a signature because people are easily offended.
AlphaLess
Posts: 3409
Joined: Fri Sep 29, 2017 11:38 pm
Location: Kentucky

Re: what is your experience of using Opendoor for buying or selling your home?

Post by AlphaLess »

Auream wrote: Fri Jun 17, 2022 7:07 am It’s possible that this won’t be happening anymore now that the market is cooling in many areas, but almost everyone around me who sold to OpenDoor or Redfin was kicking themselves when they saw how much higher the company flipped the house for. Worst example is a house I looked at back in March. Was sold to Redfin around February 1st for $600k. Appeared to have new carpet installed by RedFin but nothing else. Closed mid-April for $775k. Original seller made a $175k blunder selling to RedFin.
This is accurate.

Think of it this way. There are only two cases:
A. True home value is HIGHER than iBuyer offer,
B. True home value is LOWER than iBuyer offer.

Let's analyze each case separately.

Firstly case B. Since iBuyers use machine learning and historical simulation to come up with their "offer price", they try to minimize case B. Why? Because they don't want to overpay.

Presumably, the true home value is "V", and iBuyer offer is "O". If iBuyer private valuation is "P", then:
- iBuyer ensures that P ~ V,
- O is lower than P (but not by much).

They also ensure that near-term future price is HIGHER. Thus, they can sell it for more. This requires for them to have a home price index future valuation (where price index refers to the city-wide, or metro-wide price index).

Zillow was consistently overpaying, and also had a bug in their valuation model. They would take their own i-purchases (which were based on high offers), and they would use that as a basis of the home price index, which would further push the prices up.

The key to avoid buyer's (and seller's) remorse is to trade as close to true value as possible.

Of course, the iBuyer private valuation is known to them. So, the seller has to have a good private valuation too.
I don't carry a signature because people are easily offended.
AlphaLess
Posts: 3409
Joined: Fri Sep 29, 2017 11:38 pm
Location: Kentucky

Re: what is your experience of using Opendoor for buying or selling your home?

Post by AlphaLess »

UNCHEEL wrote: Mon Jun 20, 2022 7:30 pm I love the commercials that hype how you can get a cash offer and sell you house to them "stress-free."
Personally, I'm in the camp that leaving $100k on the table is stressful.
$100K over what price? $100K over a $2M is not a alot.

$100K over a $500K -> that is a lot.
I don't carry a signature because people are easily offended.
AlphaLess
Posts: 3409
Joined: Fri Sep 29, 2017 11:38 pm
Location: Kentucky

Re: what is your experience of using Opendoor for buying or selling your home?

Post by AlphaLess »

Also, the more astute and curious readers are encourage to browse through and read this.

This is a public document (Investor Presentation for 2022 Q1).

https://investor.opendoor.com/static-fi ... 2c0055fe6c

Ton of useful info.
I don't carry a signature because people are easily offended.
Auream
Posts: 630
Joined: Thu Mar 20, 2008 1:07 pm
Location: Raleigh, NC

Re: what is your experience of using Opendoor for buying or selling your home?

Post by Auream »

AlphaLess wrote: Mon Jun 20, 2022 8:00 pm
UNCHEEL wrote: Mon Jun 20, 2022 7:30 pm I love the commercials that hype how you can get a cash offer and sell you house to them "stress-free."
Personally, I'm in the camp that leaving $100k on the table is stressful.
$100K over what price? $100K over a $2M is not a alot.

$100K over a $500K -> that is a lot.
Opendoor doesn't do a lot of business above $1M. They're mostly in the "meat" of the market, the middle 50% of houses, particularly easy-to-value houses built by tract builders in the past 30 or so years, which in all but the most expensive markets in the country is well under $1M. In my area, it's probably about $400-700K.

I don't know if $100K is an average profit for them in this market, but it wouldn't surprise me. I mentioned previously a house I looked at (this is probably on the high end of Redfin profit margins). Sold to Redfin for $600K (minus fees that are usually ~5%), listed by RedFin at $689K, sold for $775K.
Glenn
Posts: 163
Joined: Mon Feb 19, 2007 5:06 pm

Re: what is your experience of using Opendoor for buying or selling your home?

Post by Glenn »

Neighbors sold their house last June to OpenDoor for $465k. That was on a Thursday. On Saturday, OpenDoor sold it for $525k. Two days later, with absolutely nothing done to the house by OpenDoor.

Oops.
User avatar
tooluser
Posts: 1557
Joined: Sat Oct 01, 2011 7:04 pm

Re: what is your experience of using Opendoor for buying or selling your home?

Post by tooluser »

It's important to distinguish getting enough profit versus getting the optimal profit. This is fundamental to the Bogleheads investment philosophy -- as an individual investor, you don't have to swing for the fences, and have not failed if you got enough for your needs.

By itself, the fact that the house was flipped later for more money does not indicate an incorrect investment decision unless you are selling real estate as a business. There are other considerations such as ease of transaction/simplicity, and intangible preferences such as whether you like the agent (whether a person or a corporation), or how much of a hurry you are in. Not everyone can sit like an owl on a telephone pole for an indefinite amount of time and scoop up the most careless varmints.

I hope to sell my house soon and will probably not ping any of the online services. But that could change after I talk to a few local real estate agents, if I don't care for any of them.
Like good comrades to the utmost of their strength, we shall go on to the end. -- Winston Churchill
Trism
Posts: 923
Joined: Mon Jul 18, 2016 6:34 pm

Re: what is your experience of using Opendoor for buying or selling your home?

Post by Trism »

London wrote: Thu Jun 16, 2022 7:51 pm
rocket354 wrote: Thu Jun 16, 2022 5:14 pm Hi, I recently sold one house, and am under contract to sell another. I got offers from Offerpad, Opendoor, and RedfinNow. I went with RedfinNow for both sales, but I can summarize my experiences with all three in case that helps at all.

For house #1, RedfinNow had by far the highest initial offer, so I did not followup with Opendoor or Offerpad and went with them. It just closed last week and everything went pretty smoothly. I think I got a higher price than the market would have given me.

For house #2 (the one still under contract) I got offers from all three. Opendoor was the highest, but RedfinNow was close, so I went went to the inspection with both.

For Opendoor, I just had to walk around the inside and outside of the house for 10-15 mins taking videos and upload them on their portal. Then, the next day, they had someone come out to do an exterior "evaluation" which only lasted about 20 mins. After that they gave an updated offer which was slightly higher, but also now included their repair costs which was almost exactly the same amount as the increase. So the net offer stayed the same, despite having some requested repairs. Time from inspection to updated final offer was about 24 hrs.

For RedfinNow, they did a full inspection (which they paid for) which also included a complete 3D imaging of the property. All of this took 3+ hours, so was a bit of a pain, but they paid for it, and there was no obligation if were to back out.

Opendoor would not budge at all on their offer. RedfinNow negotiated some with house #1, and then with house #2 I mentioned to them that Opendoor had a higher offer and they came back within hours with a offer that was slightly higher in the nominal sales price, with a slightly lower repair cost, and they offered to cover all closing costs, netting me an extra 1.5% in my pocket over Opendoor's offer. (Technically, *should* net me after we close.)

Also, RedfinNow's contract goes binding after an inspection period (10 days) while Opendoor has a flat $1250 earnest money deposit for their liability. So while you can back out at any time, they can also back out at any time and only owe you the $1250. For me, that was too stressful since I'd be leaving my home off the market and not fixing it up to get ready to either sell or rent, so my damages would be much higher if they backed out late in the game. So even if all else was just even, I would have taken RedfinNow just because they couldn't back out on a whim.

That said, Opendoor was professional the entire time, and kept to their word and I would have had no problem signing with them if they'd had the higher offer.

For what it's worth, Offerpad was the lowest offer each time, and, while polite, seemed to have the highest pressure sales techniques. They tried to convince me that their lower offer before they even decided repair costs was actually better than the other offers which were still higher after repair costs. They also, from what I've read, charge you if you back out after the inspection period (which I did not do with them). Overall, I felt that I would not want to deal with them in general.

Hopefully this helps some.
Posts like this are why I come to this board. Great informative reply. And this isn’t even a topic I particularly care about.
Agreed. I wish there was a "like" or a "thank you" button to acknowledge useful posts like this.

It's impossible to know if anything posted here is helping anyone else, unless someone takes the time to reply.
User avatar
JAZZISCOOL
Posts: 2658
Joined: Sat May 18, 2019 11:49 am
Location: Colorado - 5,700 ft.

Re: what is your experience of using Opendoor for buying or selling your home?

Post by JAZZISCOOL »

AlphaLess wrote: Mon Jun 20, 2022 8:57 pm Also, the more astute and curious readers are encourage to browse through and read this.

This is a public document (Investor Presentation for 2022 Q1).

https://investor.opendoor.com/static-fi ... 2c0055fe6c

Ton of useful info.
Thanks. Very interesting. I agree the RE (residential) market has been ripe for disruption for a long time. It will be interesting to see how things evolve (e.g. with RE lobbyists, etc.).
lgs88
Posts: 600
Joined: Tue Jun 07, 2016 7:48 am

Re: what is your experience of using Opendoor for buying or selling your home?

Post by lgs88 »

JAZZISCOOL wrote: Mon Jul 04, 2022 12:55 pm Thanks. Very interesting. I agree the RE (residential) market has been ripe for disruption for a long time. It will be interesting to see how things evolve (e.g. with RE lobbyists, etc.).
My hope is that these services will do to real estate transaction costs what Vanguard did to mutual fund expense ratios and commissions.

The purchase or sale of a home is obviously a more complex transaction than the purchase of a share of Google (cf. low-cost brokerages) or some trinket (cf. Amazon). However, the status quo in real estate is coughing up 6% of sale price and STILL having a painful and stressful experience. Surely we can do better.

Disruption in the RE business model can't come soon enough.

Traditional realtor advertising sounds a lot like high-fee mutual fund advertising -- sure, we cost more, but you won't beat the market unless you hire us.
merely an interested amateur
User avatar
JAZZISCOOL
Posts: 2658
Joined: Sat May 18, 2019 11:49 am
Location: Colorado - 5,700 ft.

Re: what is your experience of using Opendoor for buying or selling your home?

Post by JAZZISCOOL »

lgs88 wrote: Mon Jul 04, 2022 1:02 pm
JAZZISCOOL wrote: Mon Jul 04, 2022 12:55 pm Thanks. Very interesting. I agree the RE (residential) market has been ripe for disruption for a long time. It will be interesting to see how things evolve (e.g. with RE lobbyists, etc.).
My hope is that these services will do to real estate transaction costs what Vanguard did to mutual fund expense ratios and commissions.

The purchase or sale of a home is obviously a more complex transaction than the purchase of a share of Google (cf. low-cost brokerages) or some trinket (cf. Amazon). However, the status quo in real estate is coughing up 6% of sale price and STILL having a painful and stressful experience. Surely we can do better.

Disruption in the RE business model can't come soon enough.

Traditional realtor advertising sounds a lot like high-fee mutual fund advertising -- sure, we cost more, but you won't beat the market unless you hire us.
All excellent points. Around here you could probably pay 4.8% commission for a "full service" broker but I still think the "value add" of any realtor is something I have questioned. In some markets (e.g. slow, rural), it may make sense to use an agent but the business proposition for companies like OpenDoor still seems very appealing and I expect the market share to grow.

I'm not in the market to sell but like reading about the RE industry and learning about the options when I do decide to sell. I spoke to someone from Zillow a few years ago just to hear their pitch. They exited that part of the business as many here know (at a big loss).

I would be curious to know how other countries work in terms of RE transaction costs and if digital models are also moving in (I would imagine so just like AirBNB etc. have evolved globally).
User avatar
rocket354
Posts: 679
Joined: Mon Dec 14, 2015 11:31 am

Re: what is your experience of using Opendoor for buying or selling your home?

Post by rocket354 »

Trism wrote: Mon Jul 04, 2022 11:14 am
London wrote: Thu Jun 16, 2022 7:51 pm
rocket354 wrote: Thu Jun 16, 2022 5:14 pm Hi, I recently sold one house, and am under contract to sell another. I got offers from Offerpad, Opendoor, and RedfinNow. I went with RedfinNow for both sales, but I can summarize my experiences with all three in case that helps at all.

For house #1, RedfinNow had by far the highest initial offer, so I did not followup with Opendoor or Offerpad and went with them. It just closed last week and everything went pretty smoothly. I think I got a higher price than the market would have given me.

For house #2 (the one still under contract) I got offers from all three. Opendoor was the highest, but RedfinNow was close, so I went went to the inspection with both.

For Opendoor, I just had to walk around the inside and outside of the house for 10-15 mins taking videos and upload them on their portal. Then, the next day, they had someone come out to do an exterior "evaluation" which only lasted about 20 mins. After that they gave an updated offer which was slightly higher, but also now included their repair costs which was almost exactly the same amount as the increase. So the net offer stayed the same, despite having some requested repairs. Time from inspection to updated final offer was about 24 hrs.

For RedfinNow, they did a full inspection (which they paid for) which also included a complete 3D imaging of the property. All of this took 3+ hours, so was a bit of a pain, but they paid for it, and there was no obligation if were to back out.

Opendoor would not budge at all on their offer. RedfinNow negotiated some with house #1, and then with house #2 I mentioned to them that Opendoor had a higher offer and they came back within hours with a offer that was slightly higher in the nominal sales price, with a slightly lower repair cost, and they offered to cover all closing costs, netting me an extra 1.5% in my pocket over Opendoor's offer. (Technically, *should* net me after we close.)

Also, RedfinNow's contract goes binding after an inspection period (10 days) while Opendoor has a flat $1250 earnest money deposit for their liability. So while you can back out at any time, they can also back out at any time and only owe you the $1250. For me, that was too stressful since I'd be leaving my home off the market and not fixing it up to get ready to either sell or rent, so my damages would be much higher if they backed out late in the game. So even if all else was just even, I would have taken RedfinNow just because they couldn't back out on a whim.

That said, Opendoor was professional the entire time, and kept to their word and I would have had no problem signing with them if they'd had the higher offer.

For what it's worth, Offerpad was the lowest offer each time, and, while polite, seemed to have the highest pressure sales techniques. They tried to convince me that their lower offer before they even decided repair costs was actually better than the other offers which were still higher after repair costs. They also, from what I've read, charge you if you back out after the inspection period (which I did not do with them). Overall, I felt that I would not want to deal with them in general.

Hopefully this helps some.
Posts like this are why I come to this board. Great informative reply. And this isn’t even a topic I particularly care about.
Agreed. I wish there was a "like" or a "thank you" button to acknowledge useful posts like this.

It's impossible to know if anything posted here is helping anyone else, unless someone takes the time to reply.
First, I appreciate all the positive feedback on my post. Glad to know my experiences will help others make decisions that are best for them.

Second, to the people who decried some of these services for buying at one price and turning around and selling for a much higher price, I know that we are just exiting a very hot market, one where prices were jumping month to month. I know the 2002-2006 bubble was bigger in terms of total gain, but I think the six month span in mid-2021 was a steeper ascent than any six month span from even that previous runup. Someone signing a contract to close a month or two out, then the company going in and doing some cleaning up (not everything is visible in pictures--would you know if they replaced a roof or HVAC, for example?) and taking another month to list, means the house's value really could have increased by that extra $100k+ in the meantime. I don't mean to come across as a shill for these companies, just recognizing that anecdotal data is only worth so much (just like my own experience, which I feel was very positive, overall).

Lastly, I would just like to give an update on my sales. My tenant in house #2 ended up moving out before the end of the month and so I requested RedfinNow move up the closing date, primarily because I didn't want to risk having them back out of the contract if the market were to tank more than expected--it really appeared to be teetering to some degree, already. They complied and moved it up by 9 days.

The closing went off without a hitch and the funds were in my account less than two hours after I signed all the papers. They do a $2000 holdback as a security deposit, held in escrow, which they then release back to you once they've taken possession of the house and confirmed it's in the same condition and it's been cleaned and vacated. For both sales I received that holdback with no issues, although this second one did take a full week and a reminder email.

Overall, I'm very happy with my experiences. No real estate transaction is seamless, but the bumps in these cases were small (if there's one thing I can't stress enough to people buying/selling a house--ALWAYS double check every number on your settlement statements). I can't imagine an easier process for selling a house. Especially now that houses are sitting on the market longer and experiencing price drops.

For me, both houses were rentals and so I was able to time my signing of the contract with my sense of the market, and schedule my closings for right after the tenants moved out. This allowed me to minimize market risk and sell quicker than having to wait for tenants to move out before fixing the places up and only then being able to list the houses. I have a friend who lives in the same area as my second sale, with a very similar house, a little more square footage, who listed his house a few days before I closed on mine (so, he listed it *before* I could have listed mine if I went the traditional route, but a month after I'd signed my contract with RedfinNow). He was asking slightly more than I got for my house...and it's sat on the market and already had two price drops to now $25k less than I got for mine. Other houses in my same neighborhood which are bigger are already selling/asking for less than I got. So all told, I think I lucked out by removing market risk from the equation.

All told, I'm ecstatic with how everything played out. Take my two data points for what they're worth, but I don't think people should assume these companies are going to gouge you. I got fair prices, in fact prices in each case that I don't think I could have gotten otherwise. But most importantly, it was stress-free other than waiting for the actual closing to occur and hoping they didn't find a reason to back out if the market moved the wrong way.

And, in true Boglehead fashion, all proceeds have already been redeployed into index funds, lump sum.
Valuethinker
Posts: 49035
Joined: Fri May 11, 2007 11:07 am

Re: what is your experience of using Opendoor for buying or selling your home?

Post by Valuethinker »

AlphaLess wrote: Mon Jun 20, 2022 8:57 pm Also, the more astute and curious readers are encourage to browse through and read this.

This is a public document (Investor Presentation for 2022 Q1).

https://investor.opendoor.com/static-fi ... 2c0055fe6c

Ton of useful info.
Fabulous. Thank you.
thedane
Posts: 63
Joined: Mon Jun 11, 2018 7:25 pm

Re: what is your experience of using Opendoor for buying or selling your home?

Post by thedane »

I had an amazing experience with Opendoor. Smooth, easy, ZERO STRESS, no showings, no inspections, no repairs, no bidding game, and it gave us the ability to do post occupancy etc.
With that being said: Do some digging and see what works for you. The offer (and contracted price) that Opendoor gave me was VERY fair. Opendoor ended up trying to sell the house for 4+ months, and only made a $10K profit on it when they finally did sell it.
Had I tried to sell it myself via a real estate agent, we would have lost the house we were trying to buy. Opendoor took that stress out of it.
AlphaLess
Posts: 3409
Joined: Fri Sep 29, 2017 11:38 pm
Location: Kentucky

Re: what is your experience of using Opendoor for buying or selling your home?

Post by AlphaLess »

lgs88 wrote: Mon Jul 04, 2022 1:02 pm
JAZZISCOOL wrote: Mon Jul 04, 2022 12:55 pm Thanks. Very interesting. I agree the RE (residential) market has been ripe for disruption for a long time. It will be interesting to see how things evolve (e.g. with RE lobbyists, etc.).
My hope is that these services will do to real estate transaction costs what Vanguard did to mutual fund expense ratios and commissions.

The purchase or sale of a home is obviously a more complex transaction than the purchase of a share of Google (cf. low-cost brokerages) or some trinket (cf. Amazon). However, the status quo in real estate is coughing up 6% of sale price and STILL having a painful and stressful experience. Surely we can do better.

Disruption in the RE business model can't come soon enough.

Traditional realtor advertising sounds a lot like high-fee mutual fund advertising -- sure, we cost more, but you won't beat the market unless you hire us.
I am with you on the desire, but disagree somewhat about the analogy.

A share of a company is generic and fungible across all other shares of the same company.
E.g., MSFT has some 3-4B outstanding share, at $260 each, for a total value of $2 Trillion.

When you buy 1 share of MSFT, you don't care which share it is out of the 3-4B oustanding.
Furthermore, in order not to get bogged down into which of the 5K or so public stocks to own, the boglehead philosophy is to buy all the stocks, according to market cap weights. This eliminates any decisions to make, and, per CAPM and (weak or strong) market efficiency, is roughly optimal.

There are 140M unique homes in the USA. And even two different homes in the same sub-division, where homes were built like cookie cutter, are not the same.

Position, lighting, condition, upgrades, etc, all are different. Even the smell, and

So, because of that, it will be very difficult to get people to value homes as generic and fungible.

So, let's see what OpenDoor and other iBuyers are doing:
- when buying homes from existing owners / sellers, make the pricing as generic as possible (in order to get pricing advantage),
- improve or not, and when selling, market in a way that some family buying it finds "special"

Given that disparity, I would expect that iBuyers will simply find a niche for themselves to make money, and hardly make a dent in the "pricing" of transaction costs of the homes.

If anything, this type of service can help the car market, where cars are somewhat more generic, especially the new car specimens.
I don't carry a signature because people are easily offended.
Saving$
Posts: 2518
Joined: Sat Nov 05, 2011 8:33 pm

Re: what is your experience of using Opendoor for buying or selling your home?

Post by Saving$ »

I know someone who recently did this. Their experience, like the OP's, was very good - Open Door was upfront and did what they said, and the transaction was stress free. Like the OP, they got offers from three IBuyers. I was quite interested, as I was concerned my friend was getting scammed, so we had a long conversation and they emailed me their OpenDoor paperwork. I don't think they got scammed - I think they actually made a great deal and OD overpaid.

OpenDoor offered more than any realtor was willing to list their house for, in a market where homes go for about 95-98% of list. The person reported that dealing with OD was stress free and easy, and OD never went inside the house prior to closing - they relied on photos. OD charged a flat 5% service fee, and no other fees on the closing transaction other than the repair costs.

Traditional Realtors wanted 5-6% commission, and buyers often want the seller to pay closing costs.
Traditional Realtors requested the owner paint the entire house and replace carpet before putting it on the market, and they were having problems getting tradespeople interested who were not booked out months in advance. OD charged within $500 of the quote they got from a tradesperson who could do the work 6 weeks in the future.

RedFin initially provided a range that was higher than OD's offer, but when they made their actual offer, it was more than $100k less than their range, and also less than a traditional realtor would list it for. My friend reported that RedFin was extremely professional, and did not require them to use as much technology as Open Door. I got the idea my friend would have preferred to deal with Redfin.

OfferPad gave them a lowball offer and started to spam them even after they asked OP to stop contacting them, so they blocked them. The day we discussed this whole thing they looked at their spam texts and showed me 4 texts from OfferPad that day. Their experience with OfferPad matched what I thought all the Ibuyer stuff was about - scammy and aggressive.

My friend sold to OpenDoor, and OpenDoor is still sitting on the house, having dropped the price several times. I think after calculating carrying costs, my friend is further ahead than even if they could have sold for what OpenDoor is currently asking.
OpenDoor did send my friend several requests to "buy their next house with OD" although my friend is not in the market to buy. OD noted they have their own appraisal and mortgage company. I suspect they would try to sell my friend a house in their inventory, and by having those services in house, they make more than the standard real estate commission on a sales transaction.
Marseille07
Posts: 16054
Joined: Fri Nov 06, 2020 12:41 pm

Re: what is your experience of using Opendoor for buying or selling your home?

Post by Marseille07 »

So I've come across several listings by Opendoor. If they're listing at 400K, presumably the original owner already received 350K in cash and I'd have to deal with Opendoor instead, correct?

This begs a question of why I should go after Opendoor-listed properties, unless I'm desperate and willing to pay the listing price. I wouldn't be able to negotiate as much, since Opendoor doesn't want to sell in the red. Is it plausible to shut the door on Opendoor?
Auream
Posts: 630
Joined: Thu Mar 20, 2008 1:07 pm
Location: Raleigh, NC

Re: what is your experience of using Opendoor for buying or selling your home?

Post by Auream »

Marseille07 wrote: Sun Jul 31, 2022 2:31 pm So I've come across several listings by Opendoor. If they're listing at 400K, presumably the original owner already received 350K in cash and I'd have to deal with Opendoor instead, correct?

This begs a question of why I should go after Opendoor-listed properties, unless I'm desperate and willing to pay the listing price. I wouldn't be able to negotiate as much, since Opendoor doesn't want to sell in the red. Is it plausible to shut the door on Opendoor?
Opendoor does not always make a profit. There's a very small house in my market that I was very surprised to see sold for $441K to OpenDoor, who promptly listed it for $463K. The price has dropped 6 times and is now below $400K. I wouldn't be surprised if this becomes more and more common as many markets are softening from the insane highs of just a few months ago.

Opendoor isn't like a seller who is emotionally attached to their house or anchored to a price, they appear to automatically drop the price by a prescribed amount every 2 weeks a house sits on the market.
JS-Elcano
Posts: 992
Joined: Wed Jun 10, 2020 7:29 pm

Re: what is your experience of using Opendoor for buying or selling your home?

Post by JS-Elcano »

sabhen wrote: Thu Jun 16, 2022 4:24 pm I like to ask members of thsi forum to share their experience with buying or selling their home via companies such as opendoor.

It seems painless on the surface, you get an estimate online and then a walk-through video via zoom for a firm estimate.

Is it really that simple? are there any pitfalls or issues that I am not aware of compared with the traditional route of working via a regular RE agent?
My only experience with Opendoor was that they sent me an (unsolicited) offer to buy my house for a price that was ~90k below what it would sell for with a traditional RE transaction.
Marseille07
Posts: 16054
Joined: Fri Nov 06, 2020 12:41 pm

Re: what is your experience of using Opendoor for buying or selling your home?

Post by Marseille07 »

Auream wrote: Sun Jul 31, 2022 8:27 pm Opendoor does not always make a profit. There's a very small house in my market that I was very surprised to see sold for $441K to OpenDoor, who promptly listed it for $463K. The price has dropped 6 times and is now below $400K. I wouldn't be surprised if this becomes more and more common as many markets are softening from the insane highs of just a few months ago.

Opendoor isn't like a seller who is emotionally attached to their house or anchored to a price, they appear to automatically drop the price by a prescribed amount every 2 weeks a house sits on the market.
Thank you, this is valuable to know. You're correct that they seem to be changing the price every 2 weeks or so. Here is one of their listings I am looking at:
7/29/2022 Price change $354,000 (-4.8%)$187/sqft
7/15/2022 Price change $372,000 (-1.6%)$197/sqft
7/1/2022 Price change $378,000 (-3.8%)$200/sqft
6/17/2022 Price change $393,000 (-1.5%)$208/sqft
6/2/2022 Price change $399,000 (-2.4%)$211/sqft
5/12/2022 Price change $409,000 (-0.5%)$216/sqft
4/28/2022 Price change $411,000 (-3.1%)$217/sqft
I'm guessing they don't negotiate with you? You either buy at their listing or wait 2 weeks until they cut the price even further?

They're frustrating me because they're using my playbook of paying cash w/ discount, except that I'm buying a place to live, they just want to turn around and make a quick buck.

It appears to me the right strategy is to ignore their listings until the pricing becomes super good.
Auream
Posts: 630
Joined: Thu Mar 20, 2008 1:07 pm
Location: Raleigh, NC

Re: what is your experience of using Opendoor for buying or selling your home?

Post by Auream »

Marseille07 wrote: Sun Jul 31, 2022 10:29 pm It appears to me the right strategy is to ignore their listings until the pricing becomes super good.
OpenDoor's FAQ claims they will negotiate, but I'd be surprised if they'd accept anything significantly below their current asking price. Instead they use this reverse-auction technique of lowering the price at a regular rate. The problem is at some point the price may be good enough and someone else will bite before you get a chance. But if you're patient and don't fall in love with a house, it may be possible to get a good deal on an OpenDoor house.
Marseille07
Posts: 16054
Joined: Fri Nov 06, 2020 12:41 pm

Re: what is your experience of using Opendoor for buying or selling your home?

Post by Marseille07 »

Auream wrote: Mon Aug 01, 2022 12:24 pm OpenDoor's FAQ claims they will negotiate, but I'd be surprised if they'd accept anything significantly below their current asking price. Instead they use this reverse-auction technique of lowering the price at a regular rate. The problem is at some point the price may be good enough and someone else will bite before you get a chance. But if you're patient and don't fall in love with a house, it may be possible to get a good deal on an OpenDoor house.
Thank you. I'll keep an eye on their listings and will only trigger when they offer a discount. If someone else will bite, well, good luck overpaying I say.

Basically the issue is that...let's say a house is listed at 350K. The owner sells to OD for 300K and walks away, and OD turns around and tries to sell for 375K. They're screwing with us, if they didn't exist then we might have been able to buy the same house for 315K but not anymore.
rgs92
Posts: 3436
Joined: Mon Mar 02, 2009 7:00 pm

Re: what is your experience of using Opendoor for buying or selling your home?

Post by rgs92 »

Just bumping this thread to see how the use of Opendoor has been affected by this new mortgage interest rate environment. Thanks.
User avatar
retireIn2020
Posts: 745
Joined: Sat Jan 04, 2020 5:13 pm

Re: what is your experience of using Opendoor for buying or selling your home?

Post by retireIn2020 »

rgs92 wrote: Sat Apr 01, 2023 11:47 pm Just bumping this thread to see how the use of Opendoor has been affected by this new mortgage interest rate environment. Thanks.
https://www.nasdaq.com/articles/its-do- ... tate-slump
Opendoor (NASDAQ: OPEN) is under immense pressure as interest rates rise, home prices decline, and the company's losses pile up. Wall Street lost all faith in the company, with its share price plummeting 97% from 2021 highs.
Opendoor: It’s Do or Die Time
Because it can be argued that iBuyers like Opendoor only fare well in a rising real estate market, all signs indicate that more pain is ahead for Opendoor. Given the mounting losses and significant debt, some short sellers predict bankruptcy.
https://www.merriam-webster.com/dictionary/abide
Post Reply