iBuyers like Offerpad have cropped up to make the home selling process easier and faster, by providing cash offers on homes in 24 hours. Homeowners who have to sell quickly can be out of their house in as little as 10 days.
However, Offerpad isn’t the best option for the majority of home sellers. Lowball offers and limited flexibility on home repair costs should make you think hard before selling to the company.
Even if you do end up selling to Offerpad, it’s essential to talk to a local, experienced real estate agent first. They understand the nuances of your market and can help you decide the fastest way to sell your home.
Reach out to get connected with a top agent near you to discuss your options.
In the meantime, here’s what you need to know about Offerpad: how it works, pros and cons, and common complaints.
How Offerpad Works
Founded in 2015, Offerpad is an iBuyer real estate company that works to make the selling process simpler and more convenient for modern-day homeowners.
The company buys real estate, makes renovations and updates to homes, and then resells them at a profit. Offerpad makes a significant portion of its revenue by charging buyer service fees of 6% to 10% of their home’s sale price.
Offerpad services 12 metro areas located across the U.S. Since Offerpad needs to resell homes without investing too much in them, there are stringent requirements on the homes it purchases.
Here are the qualifications of homes that Offerpad will buy:
- Homes built after 1960
- Homes that are no more than $500,000 to $600,000 (varies by market)
- Homes that are not on lots greater than 1 acre in size
- Homes that are single-family residences (including townhomes and condos)
Sellers who work with Offerpad start the process by visiting the company’s website and inputting their address. If your home is in an area that Offerpad services, you are then asked some questions about your home and its condition.
Sellers can include images of their home to get a more accurate offer. Any upgrades or renovations that you have made to your home should be documented with photos and will be considered when determining your offer.
Once you have submitted your information Offerpad will get back to you within 24 hours with an offer or a rejection. Offerpad utilizes a team of real estate professionals in combination with local data sources to determine the value of your offer.
Once sellers receive an offer, they have four days to accept or decline before it expires. To accept the offer, sellers sign a legally binding purchase agreement with Offerpad.
An Offerpad home inspector or a third-party licensed home inspector will then come to see your home. They will evaluate your home and make a note of the necessary repairs.
The seller has three options when it comes to repairs:
- The seller can hire a licensed contractor to perform repairs. Offerpad will need extensive documentation, like receipts, contractor names, and before-and-after pictures.
- Offerpad takes care of the repairs and deducts the cost from your offer.
- The seller chooses to declines the first two options. At this point, Offerpad is free to walk away from the deal, however, in some cases, they may choose to move forward with the sale regardless.
At this time, sellers choose their closing and move out dates. In some markets, closing can happen in as few as 10 days. When closing with Offerpad, sellers must utilize the company’s partner attorney and title company.
At closing, sellers pay closing costs and Offerpad’s service charge of anywhere from 6% to 10% of your home’s sale price. The service fee depends on your location and how long Offerpad thinks it will take to sell your home. On average, sellers pay 7.5% of the price of their house.
Offerpad gives sellers who move within a 50-mile radius of their home free moving services. If you qualify for this service you will need to coordinate with their chosen, third-party local movers. Once Offerpad has officially purchased your home, you must move out at the predetermined time.
Pros and Cons of Selling to Offerpad
- Faster Sales Process: Selling with Offerpad can be significantly faster than selling your home traditionally. You get an offer within 24 hours, there’s no negotiation period, no financing process, and no need to make repairs.
- Flexible Closing Date: Offerpad lets sellers choose their closing and move out dates within a range of 10-90 days.
- Free Local Moves: Offerpad partners with local moving companies to help you move out. To qualify for this service, sellers must move within a 50-mile radius of their original home.
- Limited Availability: Offerpad is only available in 12 metro areas across the United States, making the service unavailable to the vast majority of the country.
- Costs and Fees: Offerpad charges a service fee of 6% to 10% on all of its home purchases. In addition, sellers are responsible for closing costs and will have to pay for repairs either directly or as a credit to Offerpad.
- Offerpad Inspections: Initial offers are sent to sellers sight unseen. While this first offer might seem fair, it usual comes down after an inspection. Either an Offerpad employee or a third-party inspector it hires perform the inspection, which can lead to a less objective evaluation and lead to you paying more or for unnecessary repairs.
- Limitations on Homes They’ll Buy: Offerpad has many restrictions on the types of homes they will buy. Currently, they only accept single-family houses, townhomes, and condos. They won’t buy mobile homes, multi-unit homes, or prefab homes.
3 Common Complaints About Offerpad
No real estate transaction is perfect. Although Offerpad’s review page doesn't include negative reviews, not every customer was completely satisfied. Here are some common customer complaints about working with Offerpad.
Lowball offers are common with iBuyers, as many of their clients need to sell quickly and are willing to accept a lower price. But after fees and repair costs, some sellers walk away with a lot less than they intended. Offerpad advertises “competitive offers” but it’s unclear how close to market value their offers are.
Disagreements Over Repairs and Their Value
Homeowners who work with Offerpad are not immune to the issues that a home inspection sheds light on. Unfortunately, unlike a traditional home sale that allows home sellers to negotiate which repairs they’ll pay for, Offerpad doesn’t give home seller the same flexibility.
If Offerpad decides your home needs repairs, they’ll send an estimation of how much they will cost with the list of necessary repairs. You’ll either need to pay for the fixes or walk away; you can’t negotiate or ask for certain repairs to be removed from the list. The matter is further complicated when Offerpad uses its own home inspectors to determine what repairs your home needs.
Confusion With Third-Party Moving Companies
One of Offerpad’s perks is free local moving services for home sellers moving within 50 miles of their current home. However, Offerpad uses local, third-party moving companies and places restrictions on the weight of your belongings and the size of your home.
Some of the biggest issues that come with using a third-party moving company are scheduling conflicts and confusion. Home sellers don’t need the added stress of a botched moving day due to miscommunications between Offerpad and their movers.
Alternatives to Offerpad for Home Sellers
“We Buy Ugly Houses”
Selling your home with a “We Buy Ugly Houses” company is a great option for those who want to sell their home quickly and without the hassle of a traditional home sale. These companies offer cash for homes and target inherited homes, fixer-uppers, and individuals who need to sell immediately.
Unfortunately, this is not a great option for home sellers who also need to make as big a profit as possible; these companies are notorious for lowball offers.
And if you are a home seller who is considering a “We Buy Ugly Houses” company, be on the lookout for schemes. There are several scams that pose as these companies and it’s imperative to find a reputable “We Buy Ugly Houses” company.
Traditional Home Sale
Selling with an experienced real estate agent can seem overwhelming due to all the steps: listing your home on an MLS, staging rooms, doing showings, accepting offers, negotiating, and closing.
While it may take some effort on the seller’s part, selling your home traditionally can lead to higher profit margins and give you more control over the selling process.
Real estate agents work to take the hassle out of selling your home; if they don’t get your home sold, they don’t get paid. In fact, they earn their commission by working hard for you and prioritizing your best interests.
It's a common misconception that selling your home traditionally means that it will take a very long time. Experienced agents can get you competitive offers in a matter of hours. Plus they save you money along the way.
Clever Partner Agents are flat-fee, full-service agents that work for just $3,000 or 1% if your home sells for more than $350,000. Even accounting for a 3% buyer’s agent commission, that’s a far cry from the 6% minimum of Offerpad’s service charges.
FAQs About Offerpad and Sellers’ Complaints
Does Offerpad pay a fair price?
Offerpad states that it offers sellers a competitive price on their homes based on market analysis technology and the opinions of their team of real estate professionals. While there have been complaints of lowball offers, sellers do except their offers because they’re the best option for their situation. They’re willing to trade a higher price for speed and convenience.
Does Offerpad charge a fee?
Offerpad charges service fees ranging from 6%-10% of a home’s sale price. The company compares these fees to real estate agent commission fees that are commonplace in a traditional home sale. However, sellers have a multitude of cheaper options if they choose to sell their home traditionally. Most sellers using Offerpad can expect to pay around 7.5%.
Does Offerpad pay closing costs?
Sellers must cover closing costs when selling their homes to Offerpad. In a traditional home sale, the buyer and seller can negotiate who pays what at closing, but this isn’t the case when using an iBuyer like Offerpad.