What is Opendoor? | How Opendoor works | Fees | Locations | Customer reviews | Opendoor vs. realtor | Competitors | Services & initiatives | FAQs | Contact
🔑Key takeaways:
Note: 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.
Opendoor’s promise to customers is that they’ll make the home buying or selling experience fast, easy, and predictable by taking the hassle out of the transaction.
Home sellers can receive an offer from Opendoor in as little as 24 hours and choose a closing date that works for them.
Home buyers can tour Opendoor listings privately by using the Opendoor app to unlock houses. Offers can also be submitted online or by using the app.
Opendoor charges a service fee that ranges from 3.5-5% of the sale price, plus deductions for repairs and closing costs. Real estate agents typically charage a 6% commission, but the repair costs that you have to consider as a seller on the open market might not be as high, and you'll probably get a higher offer price.
» COMPARE: Talk to an agent near you to find out if now is a good time to list your home.
✍️ Editor's take: Opendoor
Home sellers who want a fast, hassle-free sale with end-to-end digital service.
Home sellers who want to get the most possible money for their home.
 Opendoor, at a glance | |
|---|---|
3.5-5% of sale price | |
⭐⭐⭐⭐ (845 reviews) | |
OR, CA, NV, AZ, UT, CO, TX, MN, TN, NC, GA, FL, ID | |
14-45 days for buyers, 14-60 days for sellers (depending on the customer’s desired closing date) | |
What is Opendoor?
Opendoor is the largest iBuyer by volume in the United States and is currently active in 30 markets, with plans to reach 100 markets.[1]
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 3.5-5% 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 offers an end-to-end experience for customers, so they can buy, sell, and trade-in their home online with minimal hassle.
During the customer’s journey, Opendoor offers other services like repairs, financing, and title insurance to streamline the process while generating more revenue.
🏠 What kinds of homes does Opendoor buy?Opendoor door buys the following types of homes:
To find out if your home qualifies, request an offer from Opendoor now! |
Pros and cons of selling to Opendoor
✅ Pros
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❌ Cons
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Pros and cons of buying from Opendoor
✅ Pros
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❌ Cons
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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.
- 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.
How much does Opendoor cost?
Opendoor’s service fee for home sellers ranges from 3.5-5%, but the total cost ranges from 5.5-10% 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%.
Service fee | 3.5-5% |
Closing costs | 1-3% |
Repair costs | 1-2% |
Total | 5.5-10% |
» READ: Our complete breakdown and analysis of Opendoor’s fees.
Opendoor locations
Opendoor is currently active in 30 major markets across the country, including:
- Phoenix
- Atlanta
- Houston
- 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.
Customer reviews of Opendoor
🔑 Key takeaways
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We gathered reviews from actual Opendoor customers to find out what they liked and what they didn’t like about their experience.
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.
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 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.
Opendoor | Realtor |
|---|---|
5% service fee | 6% realtor commission |
Pays fair market value at most | Sell for whatever the highest bidder is willing to pay |
Flexible closing | 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 alternatives
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:
Opendoor | Zillow Offers | Offerpad | Redfin Now | Orchard | |
|---|---|---|---|---|---|
Average Rating | 4.05 | Unavailable | 1.77 | Unavailable | 4.6 |
Service fee | 3.5-5% | 1.5-9% + 6% selling costs | 6-10% | 6-12% | 6% |
Trade-in incentive | ✅ | None | ✅ | None | ✅ |
Markets served | 23 | 25 | 14 | 14 | 9 |
Repair costs | Deducted from offer | Deducted from offer | Deducted from offer | Deducted from offer | Deducted from offer |
Partner agents | In-house agents + partner agents | ✅ | In-house agents | In-house agents | In-house agents |
Flexible closing date | ✅ | ✅ | ✅ | ✅ | ✅ |
Cancellation penalty | None | None | 1% if outside the 4-day post inspection report window | None if the repair addendum is not signed. | None |
Listing options | ✅ | ✅ | ✅ | ✅ | ✅ |
Late checkout option | ✅ | None | ✅ | None | None |
Opendoor incentives
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.
Buyer refund
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 Brokerage
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.
Opendoor Title
In 2019, Opendoor acquired OS National, a national title insurance company.[2]
As a result, Opendoor can now offer title insurance and escrow services to customers internally through Opendoor Title.
FAQs
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.
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.
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.
Does Opendoor pay fair market value?
Yes, according to industry experts and prevailing data, Opendoor pays fair prices for the homes it buys. Traditional house flippers rely on a buy low, sell high approach to make money. That's because these investors are operating on a small scale, meaning they have to maintain big margins to remain profitable, year-over-year.
In contrast, Opendoor operates on an immense scale, enabling it to pay a fair price for homes then rely on short-term market appreciation to generate a profit. While this means a narrower margin on each transaction, remember that Opendoor is buying and selling at an incredibly high volume. Spread across thousands of transactions per year, those slim, per-transaction profits add up to a huge amount of revenue.
Contact Opendoor
Email | contact@opendoor.com |
Phone | 1-888-352-7075 |
Website |
Opendoor. "Opendoor Investor Presentation." Page(s) 21-23. Accessed February 8, 2021. Updated September, 2020.
Opendoor. "Welcoming OS National to Opendoor." Accessed February 8, 2021. Updated September 5, 2019.