Offerpad Fees: How to AVOID Hidden Costs

Michelle Delgado

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Michelle Delgado

August 20th, 2021
Updated August 20th, 2021

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Find Offerpad fees | Closing costs | Repairs | Hidden fees | Can you negotiate with Offerpad? | Additional services | Offerpad vs. a real estate agent

💰 Editor's take: In total, Offerpad fees will add up to 8-15% of your home's sale price, including a service fee, closing costs, and estimated repair costs. For comparison, selling your home for full price with a real estate agent costs around 6-11%.

Offerpad is a real estate company that buys eligible homes in select markets. To make a profit, Offerpad charges fees and flips homes to resell them on the open market.

If you need to sell quickly, Offerpad and other iBuyers can provide near-instant cash offers and a fast closing date.

However, Offerpad's expensive fees mean you may earn less overall from your sale. Offerpad reviews also cite pricey repair costs that often exceed the concessions you'd pay for in a traditional home sale.

If you want to sell your home for top-dollar, without navigating hidden fees, Clever is a free service that pre-negotiates lower fees on your behalf with top realtors in your area. Sellers who list with Clever pay just $3,000 or 1% in listing fees, while still getting incredible service from top-rated real estate agents.

💰 SAVE: Match with top local agents, save thousands on listing fees!

Or, read on to learn exactly how much it costs to sell your home to Offerpad.

How much are Offerpad fees?

If you sell with Offerpad, you can expect to pay fees of 8-15% of your sale price. In many cases, Offerpad fees are higher than the typical 6-11% you'd pay while working with a real estate agent.

Cost
Offerpad fees
Real estate agent
💵 Commission*
-
4-6%
🤝 Service fee
6-10% (average: 7%)
-
💰 Closing costs
1-3%
1-3%
🛠️ Repairs and concessions
1-2%
1-2%
Total
8-15%
6-11%
*If you’re selling to Offerpad through an agent, you’ll have to pay the commission specified in your listing agreement.

The biggest variable is Offerpad's service fee, which can be as low as 6% or as high as 10%. This fee is determined by Offerpad’s underwriting team, which analyzes your property and the market where you live. According to Offerpad, the typical seller pays around 7%.

It's worth noting that Offerpad's service fee is somewhat higher than what other iBuyers charge. For example, Opendoor's service feeis capped at just 5% and can be as low as 3.5%.

» COMPARE: Request a no-obligation cash offer from Opendoor today!

Does Offerpad charge hidden fees?

While most Offerpad fees are transparently listed on its website, it’s not obvious that the company sometimes charges a 1% cancellation fee.

When Offerpad provides the initial cash offer, the seller must enter into a contract — essentially, a purchase agreement— before the deal can proceed to the inspection stage.

This is when it gets tricky. When Offerpad provides the inspection report, it will also provide an updated cash offer that reflects the repair credits.

At this point, you’ll have four days to consider Offerpad’s offer. During this window, you can:

  • Accept the offer and agree to the repair credit
  • Negotiate over the repair credit
  • Reject the offer and walk away

But if you decide to back out after this four-day window, you’ll be subject to a 1% cancellation fee, based on Offerpad’s initial cash offer.

It’s a tight turnaround, especially if you want to get a second opinion from a contractor or inspector.

Are closing costs included in Offerpad fees?

No — Offerpad’s service fee does not include closing costs. You should plan to set aside 1-3% of the sale price to cover these expenses.

Closing costs vary by location, but are typically shared by the buyer and seller. In general, sellers pay transfer taxes, title insurance, and various administrative fees.

» LEARN: Who pays closing costs when you sell a home?

How much does it cost to use Offerpad’s extra services?

Along with purchasing homes, Offerpad provides several free add-ons:

  • Extended Stay: Offerpad allows you to stay in your home for up to three days after closing. If you choose this option, you'll have to allow Offerpad to hold $3,000 of your proceeds, which are returned after you move out.
  • Local Move: If you’re moving within a 50 mile radius, you can take advantage of Offerpad’s Local Move program at no additional cost. Offerpad partners with Bellhop, a third-party moving company — but note that you’ll have to pack your belongings yourself.

Does Offerpad charge for repairs?

Yes. When you sell your home to Offerpad, repairs are the biggest variable — they’re hard to predict and can reduce the amount you net from the sale by tens of thousands of dollars.

In any sale, it’s normal for the buyer to negotiate over repair credits. Based on the inspection, the buyer identifies repairs they want or need, then usually requests a discount equivalent to the estimated cost of fixing them.

The same is true with Offerpad. When you accept Offerpad’s initial cash offer, the company will send a third-party home inspectorto your home to evaluate its condition.

Then, Offerpad uses the inspection report to identify necessary repairs and estimate the cost of completing them. Repairs fall into two general categories:

🏡 Structural repairs
Major fixes such as the roof, foundation, and other big ticket items
🎨 Cosmetic repairs
Minor fixes such as flooring, paint, and other less costly items

After receiving the inspection report, sellers can choose between two options:

  • Accepting a repair credit, which deducts the cost of repairs from Offerpad’s cash offer
  • Hiring a contractor to complete repairs to Offerpad’s specifications

However, if you live in a seller’s market — one where the demand for homes is on track to outpace available listings — you may be well-positioned to sell your home without having to make repairs or concessions.

In this case, you may earn more from listing your home on the open market than you would from Offerpad's selling costs.

Offerpad reviews about repairs

Repair costs are a hot topic in Offerpad reviews. Overall, we found that Offerpad has a weighted average rating of 2.3 out of 5 stars — and complaints about repairs help to explain why it scores so low with customers.

Some sellers are disappointed when Offerpad adjusts their offer — sometimes dropping it by thousands — following the home inspection.

Angela G. 1 star. Offerpad provided us with an offer to purchase our home at about $2K less than our realtor suggested as fair market value. We knew we would gain less on the sale because of the higher commission and

Other sellers found that Offerpad charges surprisingly high repair fees — which they learned when contractors offered work at a fraction of the price.

Tara D. 1 star. DO NOT USE THIS BUSINESS. SHADY BUSINESS PRACTICES, UNPROFESSIONAL, There is something to be said too good to be true. I thought taking a little lower price, getting to pick my closing date, and getting a free move was worth it TILL the inspection process. There were many red flags so if you are reading this DON'T USE THEM. I WISH I read these reviews before. They take unnecessary deductions out of their low price to begin with and if you don't agree with their repair cost they are deducting

Additionally, some buyers who purchased homes from Offerpad reported major issues with the quality of Offerpad's repairs.

Annie P. 1 star. We bought a house from Offerpad and here's our buying experience on the following areas: communication, negotiation, repairs, lending, title, and closing. I'll review Offerpad Lender Loandepot first because this will be long and the lending process was so horrid followed by repairs. How's the home? On the surface it looks great but if you look at it closely, it has poor workmanship on any improvements. Leak where they were supposed to fix with black mold growing that costs us thousands to fix, paint drips everywhere on the cabinets, patch up work are easily identifiable, exposed wall plumbing under the sink, chipped and broken windows, condensated windows, rotted fence, sprinkler system not working, garage door patched up with plywood, leaked and etc... Don't go to the attic or you will find many horrifying code violation such as exhausts vents tied together with electrical tape, vent taped with duct tape and etc after they had fixed it. We spent thousands of dollars on repairs on a move in ready home because of their negligence. <em>Source: Yelp (excerpt)</em>

Still, some customers do feel Offerpad's repair costs are fair. For example, one seller knew their home's major systems were outdated, so there were no surprises when Offerpad requested some big ticket repairs.

Nathan R. 5 stars. After stumbling onto a property deal I couldn’t pass up, I needed to sell my house quickly with little to no risk. The offer from Offerpad was competitive with other companies but I chose them based on their response to my inquiries. I knew the roof and AC would be replaced due to simple age and expected to eat it on my equity so there were no surprises. There were some slight negotiations but we quickly came to a mutually beneficial agreement. Everything they said they would do was done and the roof and AC were replaced before going to market. No complaints here and I have recommended them since. <em>Source: Better Business Bureau</em>

🔎 MORE: Read our in-depth Offerpad review!

Can you negotiate with Offerpad?

Yes — according to Offerpad, they are willing to negotiate with sellers. There are two main areas sellers can negotiate: the offer price and repairs. However, the reality is that Offerpad may not budge on either. In general, you'll have much more room to negotiate if you list your home on the open market.

You’ll have a better shot at successfully negotiating with Offerpad, though, if you’re armed with information. Recent appraisals, inspection reports, and maintenance reports can help you make a stronger case for a higher offer or lower repair credit.

When it comes to repairs, gather as much information about your home as possible ahead of time. For example, if Offerpad suggests installing a new roof — but you have documentation showing that your roof isn’t due for an upgrade for several years — you may be able to successfully push back.

The one thing that you can’t negotiate is also Offerpad’s most expensive fee — a 6-10% service fee determined by its underwriting team. Even if you manage to negotiate other aspects of your sale, Offerpad fees may add up to 10% of your home's sale price.

By contrast, selling your home with a real estate agent leaves ample room for negotiating with your buyer — especially if you work with a company that's already negotiated savings on your behalf. Clever's network of top-rated agents come from top brokerages and work for pre-negotiated listing fees of just $3,000 or 1%. Learn more today!

Offerpad fees vs. real estate agent fees

In general, you're more likely to incur lower selling costs — and get a higher sale price — by listing your home with a real estate agent.

To illustrate how Offerpad fees compare to a traditional sale, let’s say you’re planning to sell a $200,000 home that requires $3,000 in repairs or concessions. This is how it could shake out.

Cost
Offerpad fees
Selling on the open market
🤝 Service fee (6-10%)
$12,000 - $20,000
-
💵 Commission (4-6%)
-
$8,000 - $12,000
💰 Closing costs (1-3%)
$2,000 - $6,000
$2,000 - $6,000
🛠️ Repairs
$3,000
$3,000
💡 Preparation and staging
-
$400
Total cost to sell
$17,000 - $29,000
$13,400 - $21,400
Proceeds
$171,000 - $183,000
$178,600 - $186,600

While fees are a helpful metric, it’s also crucial to consider every factor that could impact your bottom line before choosing the option that’s best for you.

Again, Offerpad's business model is set up for the company to make a profit when they resell your home. You'll usually earn more on the open market by leveraging a real estate agent's expertise to find the right buyer.

For example, a real estate agent can help you find a buyer who's willing to pay closer to your full asking price or agree to fewer repairs. Your agent will also negotiate on your behalf — unlike negotiations with Offerpad, which you’d have to navigate on your own.

If you're ready to meet top-rated agents near you, Clever can help. Not only do our partner agents come from leading brokerages including Keller Williams, RE/MAX, and Coldwell Banker, but we've pre-negotiated affordable rates of just $3,000 or 1% in listing fees.

With Clever, you'll get incredible support and earn thousands more from your sale, thanks to built-in savings!

👋 Next steps: Talk to an expert

If you're weighing your options for buying or selling a house, Clever can help!

Our fully-licensed concierge team is standing by to answer questions and provide free, objective advice on getting the best outcome with your sale or purchase.

Ready to get started?

Give us a call at 1-833-2-CLEVER or enter your info below. Our concierge team will be in touch shortly to help.

Remember, this service is 100% free and there’s never any obligation.

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FAQs

How much does Offerpad charge?

In total, Offerpad fees range from 8-15% of your home's sale price. The biggest variable is Offerpad's service fee, which can cost up to 10% — which is twice as much as Opendoor's maximum service fee (another leading iBuyer). Compare Offerpad to Opendoor now!

Does Offerpad charge hidden fees?

Offerpad requires sellers to accept its initial cash offer before knowing the final purchase price. It's also not obvious that Offerpad charges a 1% cancellation, which applies to sellers who back out more than four days after receiving the final cash offer. If you value transparent pricing, we recommend selling with a leading low commission real estate company.

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