✍ Editor's take: Opendoor has the lowest fees of all the major iBuyers at just 5%, making their service a good option for home sellers who want a fast, hassle-free sale. However, sellers who want to get the best possible value for their home should try listing on the open market because they'll get a higher sale price.
Disclaimer: Clever Real Estate has a referral partnership with Opendoor. However, we are not required to give a favorable review. The opinions expressed below are our own. Learn more.
Opendoor is an iBuyer — a company that buys houses for cash and then resells them on the open market.
When you sell directly to Opendoor you benefit from getting an offer in 24 hours or less, having a flexible closing time, and other perks like the late checkout option where you can stay in the home for up to 21 days after the sale has closed.
The cost of this convenience is that you don't capture the upside of the open market, where competition can drive up the final sale price. Instead, Opendoor's take-it-or-leave-it offer is usually close to, but ultimately below fair market value.
Selling on the open market with a real estate agent will likely net you more money than selling to Opendoor. Opendoor charges a 5% service fee, plus deductions for repairs and closing costs. Real estate agents typically charge a 6% commission, but you'll usually receive higher offers and have more control over repair costs.
You can save even more money by selling with Clever Real Estate. Clever's full-service partner agents list for just 1% or a flat fee of $3k. For the average home, that adds up to total savings of $5k or more!
What is Opendoor?
Opendoor is the largest iBuyer by volume in the United States and is currently active in 45 markets, with plans to reach 100 markets.
iBuyers buy houses that require minimal repairs and renovations, so they can resell them on the open market for a small profit.
Opendoor is able to offer such a competitive fee because they operate at a much larger scale than their competitors and therefore work on a high volume, low margin business model.
Opendoor charges sellers a 5% service fee, which is slightly less than the typical realtor commission of 6%. However, Opendoor also doesn't make offers that are in line with what home sellers can expect to get on the open market, so it's likely that a realtor will still help you to net more money in the end.
Opendoor provides an end-to-end experience for customers, so they can buy, sell, and trade-in their home online with minimal hassle.
The company also has other services like repairs, financing, and title insurance to streamline the process while generating more revenue.
How much does Opendoor cost?
Opendoor’s service fee for home sellers is 5% of the final sale price, but the total cost ranges from 7-10% when closing costs and repair deductions are included.
Closing costs are approximately 1-3% while deductions that Opendoor makes for repairs can range from 1-2%.
If you're concerned about fees, Clever can connect you with top local agents who charge just 1% or a flat fee of $3k to list your home. Clever works with partner agents from trusted brokerages like RE/MAX, Keller William, and Coldwell Banker.
You'll get maximum value for your home on the open market and save thousands of dollars in commission!
🏠 What kinds of homes does Opendoor buy?Opendoor door buys the following types of homes:
Pros and cons of selling to Opendoor
Pros and cons of buying from Opendoor
How Opendoor works
Whether you’re buying an Opendoor home or selling your home to Opendoor, most customers start their experience online.
- Sellers can get an offer from Opendoor within days of submitting the online form and close in 14-60 days, depending on their desired timeline.
- Buyers can submit an offer online or through their agent and close in 14-45 days, depending on their desired timeline.
Since Opendoor isn’t living in the property that their customers are buying or selling, they have much more flexibility when it comes to the closing date.
How Opendoor works for sellers
Sellers start the process by completing an online estimate form to request an offer from Opendoor.
The form asks for things like:
- Your location
- A picture of your house
- A description of your house
- Details about any upgrades/renovations that you are aware of
Opendoor will use this information to provide you with their initial estimate before sending an inspector to the property.
The process goes like this:
- Complete the online estimate form to request an offer.
- Receive an offer from Opendoor.
- Schedule a visit from an Opendoor inspector or do a virtual walkthrough of your home.
- After the inspection, get a final offer from Opendoor that includes repair deductions.
- Accept the offer, sign the purchase agreement, and pick a closing date.
- Get paid within a few days of closing.
⚡ Quick tip: There’s no penalty for deciding to cancel any time before closing if you aren’t satisfied with Opendoor’s offer, so it’s worth requesting a quote. Other leading iBuyers, like Offerpad, may charge a cancelation fee if you want to back out of the deal too late in the process.
How Opendoor works for buyers
Opendoor lists the houses that they own on their website where potential buyers can browse and request information.
- Find a home online or through the Opendoor app.
- Take a private tour using the app.
- Submit an offer through your agent or by yourself.
- Opendoor will respond in 24-48 hours.
- If your offer is accepted, your agent can draft a purchase agreement.
- Sign and go to escrow.
- Make your earnest money deposit.
- Schedule inspection and negotiate repairs/closing costs.
- Close in 14-45 days.
Opendoor is currently active in 45 major markets across the country, including:
- Los Angeles
As Opendoor expands and iBuying becomes a more popular alternative to a traditional real estate sale with an agent, Opendoor plans to become active in 100 markets from coast to coast.
Opendoor reviews from real customers
The majority of Opendoor reviews from customers are positive, with an average rating of 4.28 across 1934 reviews.
Positive Opendoor reviews focused on:
- A fast, seamless transaction.
- A done-for-you selling experience that matched the customer's desired timeline.
Negative Opendoor reviews focused on:
- Inflated repair costs.
- An inability to negotiate Opendoor's offer price.
Although we did our best to source accurate, honest reviews, it’s important to remember that this is a limited sample of Opendoor customers from markets across the US.
Because there are so many variables when it comes to buying and selling a house, your experience with Opendoor may differ.
To decide whether selling to Opendoor is worth it, your best bet is to compare your offer to what your house could sell for on the open market.
We recommend asking a local realtor for a comparative market analysis (CMA) that shows you what your home is really worth.
What customers liked about Opendoor
Trey noted that the offer he received was competitive, and he was very pleased with his experience selling to Opendoor.
Ellen appreciated not having to show her house to multiple buyers and said that working with Opendoor was easy.
JL said he wasn’t convinced that Opendoor had his best interests in mind, so he paid close attention to the details when he sold his home, but he was satisfied overall.
What customers didn’t like about Opendoor
An anonymous reviewer from Texas said that Opendoor did not negotiate fairly.
R Pearis says that the experience didn’t meet his expectations, but he really likes the idea behind Opendoor’s service.
Mac was frustrated with Opendoor because they wouldn't make him an offer on his home.
Selling to Opendoor vs. listing with a realtor
Selling to Opendoor is more predictable and sometimes faster than selling with a realtor. That’s because Opendoor can make an offer quickly and close when you want while realtors can’t guarantee that the right buyer will come along quickly.
However, a realtor will be able to net you more money by getting your house in front of multiple buyers ensuring that you get the best possible price.
⚡ Quick tip: We recommend listing your home on the open market with the help of an agent before you try selling to Opendoor. This way, you can test the open market and get the highest possible offer for your home.
If you've done this and the home hasn't sold in your desired timeframe, your agent can request an offer from Opendoor on your behalf. You might still have to pay your agent's listing commission if you've signed a listing agreement, but Opendoor will only charge a reduced service fee in this case.
Opendoor charges a 5% service fee that’s slightly lower than the 6% commission that realtors are typically paid. Closing costs and repair fees are still a factor in either case.
Agents have an incentive to get the most possible money for your home because the more you make, the more they make in the form of commission. Opendoor, by contrast, has an incentive to pay less than a private buyer for your home.
In cases where the difference between selling to Opendoor and selling with an agent is negligible, some sellers might choose Opendoor because of the speed and certainty they’re able to offer.
5% service fee
6% realtor commission
Pays fair market value at most
Sell for whatever the highest bidder is willing to pay
Closing negotiated with buyer
No showings or prep work required
Must prep and show home
Fast, predictable selling time
Unknown selling time
» LEARN: Does Opendoor negotiate?
Opendoor isn’t the only iBuyer on the market, even though they’re currently the largest. The alternatives include leading competitors like Zillow Offers, Offerpad, and Redfin Now.
Opendoor stands out because:
- Their service fees are low.
- There’s no penalty for walking away from a deal.
Here’s a quick comparison of how Opendoor stacks up against the alternatives:
1.5-9% + 6% selling costs
Deducted from offer
Deducted from offer
Deducted from offer
Deducted from offer
Deducted from offer
In-house agents + partner agents
Flexible closing date
1% if outside the 4-day post inspection report window
None if the repair addendum is not signed.
Late checkout option
Other Opendoor services
Beyond buying and selling, Opendoor offers a variety of invcentives and services, such as home buyer rebates, that help customers to save money while benefiting from a streamlined transaction.
These incentives allow sellers and/or buyers who are work with Opendoor to do things like:
- Trade in their home
- Trade up for a newly built home
- Get a cash rebate at closing time
Opendoor buy and sell
Opendoor has recently added a home trade-in service called Opendoor buy and sell.
With buy and sell, you can purchase your next home using Opendoor's cash, and then list your old home once you've moved.
Using Opendoor's cash allows you to make a non-contingent cash offer on your next home, which could be a huge advantage in a competitive market because it'll make your offer a lot more attractive.
The program also helps you to avoid paying two mortgages at once, but you'll still have to repay the mortgage on your old home once it sells.
The fees for the program is "as low as 5%," which leads us to believe that it could be higher in some markets.
Opendoor builder trade up
Opendoor provides complimentary services to help customers transition into their newly built home, such as moving, same-day closing, and even a late checkout.
To accomplish this, Opendoor has a partnership with national home builder Lennar homes. As a result, customers who are building a new home with Lennar can trade their old home into Opendoor.
Direct buyer incentive
If you purchase a home directly from Opendoor without the help of a real estate agent, Opendoor offers a 1% credit back at closing (in select markets).
One of Opendoor’s greatest costs when they sell a home is having to pay the buyer’s agent commission, which is around 3%. This incentive rewards sellers for helping Opendoor reduce their costs.
If you buy an Opendoor home with one of their partner agents, you are eligible for 1% cash back at the time of closing.
Opendoor has a network of partner agents that they can refer buyers to when necessary. These agents don’t work for Opendoor, but they do pay Opendoor a referral fee for the customers that Opendoor sends them.
Other Opendoor entities
As Opendoor has grown, the company has moved into other parts of the home buying and selling process in order to offer more services to customers while getting a bigger piece of the overall transaction.
Opendoor now has entities that offer mortgage solutions, realtor services, and title insurance.
Opendoor Home Loans
Opendoor Home Loans is Opendoor’s mortgage lending solution. As an Opendoor customer, you have the option (but not the obligation) to finance the purchase of your new home using Opendoor Home Loans.
The lender offers mortgages with competitive interest rates and does not charge any lender fees. Opendoor home loans also offer a $1,000 credit at closing, subject to eligibility.
Opendoor’s brokerage can provide you with an Opendoor real estate agent who will represent you if you want to list your house for sale through Opendoor. This is similar to working with a real estate agent at a major brokerage as you would in a traditional sale.
However, Opendoor real estate agents cannot represent buyers who want to buy an Opendoor home as this would constitute a conflict of interest.
In 2019, Opendoor acquired OS National, a national title insurance company.
As a result, Opendoor can now offer title insurance and escrow services to customers internally through Opendoor Title.
Does Opendoor pay fair market value?
Not quite. According to industry experts and prevailing data, Opendoor pays as much as 99% of fair market value, for the homes it buys, but they don't pay as much as sellers would get on the open market.
Like other iBuyers, Opendoor has a narrow margin on each transaction, but the company is buying and selling at an incredibly high volume.
If you're curious about how much Opendoor would pay for your home, you can request an offer for free.
Does Opendoor negotiate with buyers?
If you're buying a home from Opendoor, you or your buyer's agent can try to negotiate the price point, but according to customer reviews, the company likes to sell close to listing price and doesn't budge much on concessions. If you're considering buying from Opendoor, the experience will likely differ from negotiating with an individual seller.
To put yourself in the strongest possible negotiating position, you should find a real estate agent who can represent you when you buy a home from Opendoor.
Does Opendoor pay closing costs?
Opendoor does not cover closing costs — whether you're buying, selling, or trading in. This stands in contrast with a normal real estate transaction where who pays what closing costs is typically up for negotiation.
That said, one of the benefits of selling to Opendoor is there are no hidden fees. Everything, including how much you'll have to pay in closing costs, will be presented to you before you accept the final offer.
What is Opendoor's business model?
Opendoor's business model is buying and selling homes at scale through its digital platform. Relying on a combination of algorithmic valuations and advice from local experts, it can offer close to market value for homes and then sell them for an appreciated value soon after.
In exchange for speed and convenience, Opendoor charges a service fee of 5%.
Between appreciation, service fees, and other ancillary revenue — such as partnerships with contractors, lenders, and other businesses — Opendoor is able to turn a small profit on each sale. Buying and reselling at a high volume is ultimately what allows it to increase its bottom line.
Mike DelPrete. "Inside Opendoor: What two years of transactions says about their prospects." Updated December 16, 2016.
Opendoor. "Opendoor Investor Presentation." Page(s) 21-23. Accessed February 8, 2021. Updated September, 2020.
Mike DelPrete. "Do iBuyers Like Opendoor and Zillow Make Fair Market Offers?." Updated November 12, 2019.
Opendoor. "Welcoming OS National to Opendoor." Accessed February 8, 2021. Updated September 5, 2019.