Opendoor, the leading iBuyer by volume in the United States, uses technology to help consumers purchase and sell properties fast and for cash. When it purchased its first property in 2014, Opendoor introduced the world to iBuying. According to the corporation, it purchased 14,135 residences in the second quarter of 2023. Opendoor began operations in Phoenix and today has over 50 markets in a dozen states, including Florida, Texas, Nevada, and North Carolina. In this post, we will look at how open-door sales work for both buyers and sellers.
What is Opendoor
Opendoor operates as an iBuyer. A real estate company buys properties from sellers for cash and then sells them to people who want to buy them. This means that open-door sellers never work with buyers directly. In a nutshell, it works like a store or a place that sells used cars, but for houses.
Rather than going through the time-consuming process of finding a buyer, negotiating a transaction, and waiting for the buyer to acquire financing, homeowners can sell their house to Opendoor for an immediate cash payment. They can receive offers for their homes within 24 hours and close in 10-60 days.
While there are benefits to Opendoor’s accelerated sales process, sellers should be aware that the convenience comes at a cost: Opendoor is notorious for making offers that are significantly below fair market value and charging service fees ranging from 6-14%.
How Does Open-door Work?
Homeowners can use Opendoor to sell their properties rapidly without having to stage, list, or show them. You also won’t have to bother about repairing anything yourself. Instead, Opendoor will calculate what repairs your home requires and deduct the cost from the sale profits. Here’s how open-door sales work for both buyers and sellers:
#1. Send in an offer request:
Request an offer at opendoor.com by entering your address and basic information about your home, including its condition and features. The procedure will take about 10 minutes and is completely free. Opendoor then makes a preliminary offer for your home based on comparable sales and market data. You are not obligated to accept this offer.
#2. Schedule a home inspection:
If you decide to proceed, the next step is to schedule a free home assessment with Open-Door. In this phase, Opendoor will assess the inside condition of your property. There are two options: a corporate person can virtually finish the assessment with the homeowner via live video, or the homeowner can take photos and record a video with their camera or smartphone.
The entire procedure takes about 10 minutes. Opendoor will also send an estimator to your home to assess its outside. Opendoor will submit a definitive offer for the home within 24 to 48 hours of these assessments. If you disagree with the final evaluation results, you can cancel the contract without penalty at any moment before closing.
#3. Close to the house:
If you decide to sell, you can take your time and choose a closing date that works for you. Sellers can typically close in as soon as 14 days or plan a closing date up to 60 days in the future. You will be required to upload information to an online dashboard before closing to ensure that your home is in the same condition as when the assessment was performed. The money from the sale of the home will then be delivered to you a few days following closing.
How Does Open-door Work for Buyers and Sellers?
Opendoor allows home buyers to search, visit, and buy residences regardless of whether Opendoor owns them. The cash-backed offers from Opendoor also assist buyers in making all-cash offers for homes, which sellers may find more competitive.
Buying an Opendoor-owned property
When buying an Open-door home, you have the option of doing it yourself or work with an Open-door partner agent. You can even bring in an agent to submit the bid on your behalf. If you choose this option, all sales updates will be sent immediately to your agent.
To find homes on the Opendoor app or online, search by city first, then select “tour” for directions to the homes you want to see. If you decide to buy the house, you can submit an offer using Opendoor’s website, the app, or by emailing email@example.com. Within 24 to 48 hours, Opendoor will examine and react to your offer; if accepted, you will be allocated a representative to assist with the transaction.
Buying any house on the market
In some areas, Opendoor also provides the option of purchasing any home for sale, even if Opendoor does not own it.
After submitting an offer using Opendoor’s website or app, you will be connected with an Opendoor partner agent who will examine and submit your offer for you. If your offer is accepted, the purchase agreement will be created and signed by both you and the seller. Finally, your Opendoor partner agent will assist you in navigating the escrow and closing procedure.
Whether you buy via Opendoor or not, the company’s cash-backed offer program can assist buyers in certain areas purchase a new house with cash, which can give you an advantage in hot housing markets. Furthermore, there are no additional expenses to use the cash-backed offer, and it comes with no appraisal, financing, or property sale contingencies.
Opendoor also provides a 90-day warranty, allowing you to return the home if you are dissatisfied with your purchase (in some circumstances). To qualify, the home must have been purchased through an Opendoor agent or an Opendoor partner agent and meet certain criteria.
Trading in a home
You can also buy and sell a house using Opendoor at the same time (a process known as “trading in” your home). This allows sellers to avoid having to pay two mortgages or move twice by scheduling the closing dates to coincide. You can utilize your trade-in to purchase an Opendoor home, a new construction home, or any house on the market (depending on the market area).
If your financing falls through and you are unable to close on time, Opendoor can purchase your new house to ensure that another buyer does not take it.
Selling to Opendoor
If you sell directly to Opendoor, the firm charges a service fee of 5% of the sale price to cover maintenance costs (but not repairs), as well as the costs of buying and reselling the home. According to the company, this service price could end up being more or less depending on how long Opendoor believes it will take to sell your home later.
After selling to Opendoor, you can take advantage of a “late checkout” option, which allows owners to stay in the property for up to 21 days after closing as long as you put down a security deposit and pay the daily cost.
Listing with Opendoor
If you want to sell your property, Opendoor can list it for you even if you don’t want to sell it straight to them. You will be connected with local experts who will assist you in managing the entire process, including determining the value of your home.
The commission fee charged by Opendoor is also 5% of the home’s sale price, which covers the expense of listing with a local real estate agent. This is less than the standard 6% agent commission split between the listing and buyer’s agents.
Seller concessions, or the charges buyers may want you to pay to ensure the deal goes through, might amount to up to 2% of the home’s purchase price and will be negotiated with the assistance of your Opendoor representative. Following the inspection, the buyer may request that you make repairs or credit them for the cost of the repairs.
How Does Open-door Work for Sellers and Buyers?
When you sell or buy with Opendoor, they simplify the process to make your move as smooth and stress-free as possible. The following is how open-door sales work for both buyers and sellers:
#1. Register and request an offer.
To begin, go to opendoor.com/buy-and-sell and enter your address before answering a few questions about your present house and your future home hunt.
#2. Review your offer and look at available properties
After you sign up, they’ll present you with a preliminary offer to buy your property. In addition, you’ll get a stream of properties for sale that match your search criteria. From the dashboard, you may browse and favorite homes. You’ll also have peace of mind knowing that you have a potential buyer for your existing house.
#3. Get to know your team
Throughout your relocation, you will have access to a team of real estate specialists who will assist you at every stage. They’ll introduce you to your Customer Experience Partner, who will assist you with all aspects of the selling process, as well as your Buying Agent.
#4. Begin looking at houses.
When you find a home you like, schedule a private tour in person or via live video call at a time that is convenient for you. This can be done directly from the Opendoor app or your dashboard.
#5. Show your home and get your final offer.
Next, they’d like to see your current house so they can make you their best offer. You can schedule a video call or upload photographs and videos of your home whenever you like. They’ll send you your completed selling offer in a few days.
#6. Obtain pre-approval
After you’ve received a final offer on your present house, it’s time to get pre-approved for your new home. When you find the perfect property, you’ll be prepared to make an offer. If you live in California, OD Homes Brokerage can help you get pre-approved. It only takes a few minutes and does not affect your credit.
#7. Accept your purchase offer.
You can choose a closing date up to 60 days after accepting the offer. This will offer you more time to find a new place to live. If your plans change, you can cancel at any time before the closing without incurring any costs or penalties.
#8. Make a purchase offer
Do you believe you’ve discovered the one? Submit an offer to purchase the home from your dashboard or the Opendoor app. Your Buying Agent will analyze the offer and advise you on which terms are most likely to be accepted. They can even assist you in making a monetary offer to distinguish yourself apart from competitors.
#9. Complete all final tasks
Wonderful news! Your proposal was accepted. It is now time to complete closing duties such as placing an earnest deposit and informing them of your utility providers. Most of these actions can be completed directly from your dashboard.
#10. Coordinate closing dates and relocation
All that remains is to select your closing dates. They’ll assist you to arrange the dates so you don’t have to move twice or pay for two mortgages at the same time. You’ll get your net proceeds in a few days, and They’ll provide you with information on how to move into your new house.
Don’t worry about memorizing all of the stages involved in how open-door work for buyers and sellers. When you request an offer, you’ll gain access to a checklist that will keep you up to date on the status of your transfer.
Is selling to Opendoor a good idea?
Yes, one industry insider claims that Opendoor pays a reasonable price for homes. Mike DelPrete, a real estate IT strategist, discovered that in 2021, Opendoor routinely paid more for homes than its competitors in Phoenix, the largest iBuyer market in the United States.
Does Open-door work?
Yes, Opendoor is a legitimate website. It is a real estate company that buys houses for cash and operates in 47 areas across the United States. The fees charged by Opendoor represent their carrying and resale costs; after all, their business plan is to sell your home.
How long does Opendoor give you to move out?
You must vacate by 11:59 PM the day before your escrow closes. If you have chosen the Late Checkout program, you must vacate (together with all of your things) by 5:00 PM on the last day of occupancy specified in your Late Checkout agreement.
Does Opendoor do a final walkthrough?
Yes. The last walk-through usually takes place 24 hours before closing. One advantage of selling to Opendoor is that you won’t have to worry about a buyer qualifying for financing; instead, you’ll get the certainty of a competitive, all-cash offer.
Does Opendoor have hidden fees?
No! There are no hidden costs in the pricing. Whether you’re working with Opendoor to sell or buy a home, you should be aware of the expenses upfront.
Does Opendoor take a percentage?
Not at all! Instead of agency commissions, Opendoor charges a service fee that covers the costs of buying, maintaining, marketing, and selling the home. Their current service cost is no more than 5%, but it may change.
While everyone’s opinion on Opendoor differs, we believe they do sellers a disservice. Working with a quick service like Open-door implies paying higher fees and receiving a lower price for your house than if you worked with an experienced real estate agent. It is not worth it to cut corners when it comes to a sale as essential as selling a property.
Frequently Asked Questions
What credit score does Opendoor use?
A credit score of 620
The goal of Opendoor Home Loans is to make the lending process simpler, more certain, and cheaper. Depending on your financial circumstances and the value of your house, we have solutions that demand as little as a 620 credit score and as low as 3% equity.
Is it better to use a realtor or Opendoor?
If you want to get the most money for your home and get it in front of the best buyers, you should hire a traditional real estate agent. Opendoor is only a good option if you need to sell your house quickly and are willing to sell it for far less than its fair market value.
Can you trust Opendoor?
No, Opendoor is not a scam; it is a legal business. Their fees are determined by their business model. Is Opendoor paying a reasonable wage? Opendoor often offers you less money than you would receive if you sold your home on the open market.