The Good, The Bad and the Ugly
Opendoor claims their algorithm produces an offer at a “fair market” price and collects a fee for conducting the transaction, usually around 11-12 percent.
My fee is typically around 5-6%. I hand 3% of that to the buyer's agent on a successful close.
Customers selling on Opendoor or OfferPad are certainly paying a premium for the "convenience". The 12 percent fee/cost of using this system is higher than a traditional brokerage fee. Sellers are also potentially leaving money on the table by not fielding offers that could drive the selling price above the figure the algorithm spits out. That premium (True Value) goes directly into Open-door or OfferPad pocket when it sells the home.
Here are the key takeaways:
Opendoor buys houses and owns them, acting as a middleman (as opposed to a matchmaker) or wholesaler in residential real estate transactions.
Opendoor won’t buy every house, but this doesn't make yours special if they do, this is why-- qualifying properties include single-family homes built after 1960 with a value between $125,000 and $500,000, that's it.
Opendoor makes money in two ways: from the outrageous service fees it charges, and from the difference between what it buys your house for and what it turns around and sells it for.
Opendoor works with real estate agents, offering to pay a buyer agent's commission often at only 2.5%, pocketing the additional .5% and then some.
Opendoor charges a Seller huge and variable fee for its services, starting at 8 percent and rising to a whopping 12 percent for "risky" (in their words) properties. The typical Selling fee falls between a backbreaking 8-9 percent for sellers, which is a great deal higher than the 5-6 percent fee charged by professional real estate agents. In addition to the higher commission fees comes their service fees that consist of holding fees, repair fees, Staging, prep fees, and all typical escrow fees, title fees. This typically runs a seller over 20 thousand dollars more than listing their home with me. Not only do I help stage a property free and market it using hi-def virtual photography listing it on, not only the MLS but over 500 different relevant online sources. I've been told that I am a kind, enthusiastic, fun to work with Realtor and I have all 5-star reviews to prove it.
Also, the analysis researched shows an average appreciation of 5.5 percent from the price Opendoor buys houses for and what it ends up selling them for. SO that means that not only the crazy fees they charge you above, they cut you out of an additional 5.5% plus, of the value, you should be getting
when selling your home.
“The vast majority of [revenue] is our fee,” said Opendoor co-founder JD Ross. “We aim for that to be 100 percent. For us, we treat home price appreciation gain as an error in our model. Our service in our mind isn’t that we buy and sell a home. Our service is that we enable you to move really, really easily.”
So with that, I Beth Mitro offer and guarantee a really really easy convenient move. If you're looking for a cash offer, 10-day close? I too have investors that would offer you more than what Offerpad or Opendoor would offer you.
If you want a much higher offer and fair value for you home or investment property, then let me list it, fully, or with showing restrictions, and get you top dollar for your house. Today's market allows a 33% chance it is a cash offer.
Don't want to repair your home? You don't have to! We list it and offer the buyer a credit only if anything noncosmetic comes up in the inspection report, no biggie.
Have a very ugly house? No worries, we list it and I make it by the pictures look very nice, we get showings and since we have it listed at a competitive price we get an offer. We list it as-is or as a fixer-upper. New Homebuyer's eat that up. Everybody knows or is a handyman. they want to fix it up to their liking in the 1st place. They already have their eye on a wood-like tile flooring at the Depot store and as long as they see you're listing as a good deal and fair price, worry no more.
Crazy ol me is also offering a free local move to my clients, why? Because good business matters to me. So don't wait, let's get this home of yours listed as a House for sale today. I'll answer my phone but if you prefer to text or can't talk just text me your address and the best time to reach you. If I'm missing something that they offer then please understand I will guarantee that I will offer it too! 702-285-7778
The question is... Who are you giving your money too?