As many of you are aware, Opendoor is a startup company that began in 2014. A group of men pitched an idea and received an INCREDIBLE amount of money from investors. The Opendoor sales pitch is "Sell your home to Opendoor so you can skip the hassle of listing, showings, and months of uncertainty." But in most situations, Opendoor does the home seller a disservice, and that seller would put much more in their pocket if he or she took the traditional route. Sellers paid, according to Opendoor, 10% to 12% in fees! Also, sellers pay for all repairs that are found during inspections, (repairs, if not warranted, are negotiable in traditional sales: PLUS, sellers must pay whatever Opendoor charges for needed repair). According to Opendoor's inspection brochure, the company offers two other options: sellers can tackle the fix themselves or "say goodbye."
In addition to the fees, Sellers split their closing costs with Opendoor (so no savings here); sellers are clearly giving up significant equity in exchange for convenience. On a $300,000 house, giving up 5%to 10% of market value — plus paying 12%commission or fees and making all repairs needed — can add up to a very pretty penny. The market value hit is worth $20,000, and the higher commission or fees is worth at least $18,000 — plus the repairs; that's $40,000 less in their pocket by going with Opendoor versus hiring a real estate agent and selling the traditional way.
Lastly, and in my opinion most importantly, Opendoor reserves the right to renegotiate after the inspection period if it decides that something they discover will affect the resale value. This might just be a bad color option for the countertops, so that $5,000 hit is added to fees, but the property still shows as selling for 96 percent of market value. This is how Opendoor makes money but appears to buy close to market value.
We are not alone in our observations, below you will see Yelp reviews, BBB complaints, and concerning employee reviews from Opendoor employees themselves.
Yelp Reviews From Sellers Below
"IF YOU WANT TO LOOSE MORE MONEY ON YOUR HOME USE THIS COMPANY THAT DOES DIRTY WORK AND IS A BIG SCAM. They came to my realtor and presented and offer. They told me that I had 5 days to sign it. I was advised that I should not do it quite yet due to I just lowered the price of my home. We were not ready to sell quite yet to them and wanted a person not an investor. If you want an easy was out, they will charge you over $6,000.00 plus lowball the price of your home. If you don't sign it within the time they give you they will lower offer than before. I tried to call them and talk to them about an email saying we should sign and then thinking we had an offer they call you and give you a lot of BS. There was a realtor named Kristen that told us to sign the old offer and to me that means that it is a legal and binding contract. They should not be able to change the fees. I did go to the NC Real Estate Board and file a complaint regarding this matter."
"We were in a contract on a home in Raleigh and the home had structural roof damage and Open Door refused to repair this obvious damage unearthed by a home inspector. We walked away from the sale. The offer had $1000 due diligence and Open Door refused to respond back in a timely manner, once a NEED to have an engineer review the matter was denied. No one responds in a timely manner. No one works together. They are absolutely terrible. In addition, I received a call to discuss and was asked to return the call. I called back at least 3 times and no return calls. Anyone who buys this how is going to be in trouble due to the structural damages to the gussets in the roof. The main question is if they are disclosing this knowledge on the disclosure form for future buyers."
"I got an offer on my house in Frisco, TX for 203k. I knew that was too low. Ended up selling my house with a Realtor for 25k more, plus I saved an additional $10,000 on commission!!! They take advantage of the money you make on your investment! Do not fall for this!"
"I asked Opendoor for a more realistic offer since they low balled me on the first one and after leaving a Yelp review they said to let them know if I want another offer. They went up 5k and it was quick, like less than 24 hours as opposed to the first time they gave me an offer. Hmm? Moral of the story, if you don't care about them taking so much more of a % and don't want to deal with showing your house, and don't mind losing money- Opendoor can help you. Otherwise, just use a Realtor."
"Watch out — it's a bait and switch. They offered me a price and I accepted — then a few days before closing (almost a month later) they came back and said they made a mistake on my appraisal and had to drop the price almost $40k. Pretty shady stuff. Seller beware."
"We reached out to Opendoor to sell our home, because it was supposed to be no-hassle for a fair price. That was not our experience. Opendoor never spoke with us prior to making us an offer. The offer was $13,000 less than what our home just appraised for. Worse than that were the $10,000+ in fees plus undetermined repair costs. When we tried to negotiate with them, we were told that maybe they weren't the right company for us. I guess they were right!"