Opendoor and Offerpad both provide sellers a way to sell their home for cash quickly. Here, we’ll go over what sellers need to know when deciding between these two iBuyers, as well as some alternatives to consider.
If you're looking to sell your house fast or simply want to avoid the hassle and stress of the traditional home selling process, iBuyers (short for "instant buyers") like Opendoor and Offerpad are definitely worth looking into.
If your home qualifies, you'll get an all-cash offer within 24-48 hours. Closing timelines vary from situation to situation, but many sellers can close in as quickly as 10 days.
What's more, unlike traditional cash buyers (think We Buy Ugly Houses) and flippers, most iBuyers make fair offers for the homes they buy.
While you'll avoid paying realtor commission, most iBuyers charge service fees to offset their carrying costs and ensure a margin on each transaction — typically between 6-14%.
Read on to learn more about Opendoor and Offerpad: how they work, the pros and cons of each, and alternatives worth considering.
Overview of Opendoor
Opendoor offers a fast and convenient alternative to the traditional home selling process. Qualifying homes will typically receive a preliminary cash offer within 24 hours. If the seller accepts, they can close in as little as 14 days.
How Opendoor Works
- Request an offer online: After submitting your request — and assuming your home qualifies — Opendoor will get you a preliminary, no-obligation cash offer within 24-48 hours. You can either accept, decline, or, if you think your home has been undervalued, submit additional information and request a second evaluation.
- The on-site inspection: Once you accept the offer, Opendoor will send a representative to your home to perform an in-person assessment. If anything needs to be fixed, Opendoor will simply deduct the repair costs from your offer handle them itself after you move out!
- Close on the home: When the assessment is finished, you can set your own closing date. Opendoor offers flexible closing timelines, between 14 and 60 days after accepting its offer. At closing, you’ll pay a 6-14% Opendoor service fee plus traditional seller closing costs.
- Getting an offer is fast and easy: All you have to do is provide some basic info about your home via Opendoor's intuitive website. If your home qualifies, you'll get a preliminary offer back within 24 hours.
- Pays fair market value for homes: Opendoor makes money primarily through its service fees and market appreciation. It uses advanced algorithmic technology, massive amounts of data, and an in-house team of experts to ensure its offers are both fair and competitive.
- You don't have to handle repairs: Selling to Opendoor means you don't have to gamble on potentially unnecessary pre-listing repairs to help attract offers. Opendoor will assess your property and, if it finds any issues that need fixing, will simply deduct the cost from your offer and handle itself after you move out.
- Fast and flexible sale timeline: With Opendoor, closing timelines are flexible. You can schedule closing to be anywhere between 14 and 60 days.
- 6-14% service fee: Opendoor's average service fee is 7.1%, which is more or less comparable to commission fees charged by traditional real estate agents. That said, depending on your specific property and demand in your market, fees can range between 6-14%.
- Strict criteria for homes: Opendoor has strict criteria for the types of homes it's willing to purchase — e.g., must be in good condition, on less than half an acre of land, between $100,000 and $500,000, post-1960 construction, etc.
- Only available in 20 U.S. metro areas: Opendoor only operates in 20 U.S. metro areas. If you are located outside of this area, you cannot use the service.
As of August 2019, Opendoor has a A+ rating from the Better Business Bureau. There were 38 complaints closed in the last 3 years, and 32 complaints closed in the last 12 months.
Opendoor has a 3.6 average consumer rating based on HighYa based on 184 reviews as of August 2019.
Overview of Offerpad
Offerpad has a similar business model, with a few minor variations. For one, the average service fee is a bit higher, at 7.5% (compared to Opendoor's 7.1%).
How Offerpad Works
Here’s the process of selling your home to Offerpad works:
- Request an offer: After making a request online, you’ll receive a preliminary offer within 24 hours — that is, assuming your home qualifies.
- Accept or decline: Offers are typically take-it-or-leave-it. If you like the preliminary offer, you can accept — if not, you can decline and move on.
- The on-site inspection: If you accept the offer, an Offerpad representative or a third-party inspector will perform a home inspection to verify the condition of your home and/or uncover any necessary repairs. You can then deduct the costs from your price or handle yourself with a licensed contractor (note: all work will need to be approved by Offerpad prior to closing).
- Closing: Some sellers will be able to close within 8 days — most transactions close within 30.
- Fast cash offers: Qualifying homes receive offers within 24 hours.
- Choose your closing date: Sellers can close on their home within just eight days in some markets.
- More options for repairs: Sellers can deduct the costs of repairs from the offer, make repairs on their own, or refuse either option and hope Offerpad will still proceed with the sale.
- Lower Offers: Expect your offer to be below fair market value — up to 7.5%
- High service fees: Offerpad's service fees range from 6-10%, with the average service fee being 7.5%.
- Only available in 12 metro areas: As of August 2019, Offerpad only operates in 12 U.S. metro areas.
Offerpad has an A+ rating from the Better Business Bureau as of August 2019. There were 30 complaints closed in the past 3 years and 21 complaints closed in the last 12 months.
On Sitejabber, Offerpad has a 1.4/5 star rating based on six reviews as of August 2019.
Consider Every Option Before Selling
If you're considering selling to an iBuyer, it's important to explore every option before making a final decision — and that includes listing on the open market with a real estate agent.
The best real estate agents are experts at pricing and marketing homes to sell quickly. With the right approach, many can get fair market value offers (or better) within a matter of days, if not hours!
The big question, of course, is which approach will net the most (and ensure you sell within your required timeline, if that's a consideration). The truth is that there's no definitive answer. It all comes down to your specific situation and needs.
For this reason, it's worth at least speaking to a few local real estate agents before pulling the trigger and accepting an iBuyer's offer.
If you'd like to set up a free, no-obligation consultation with a top agent in your area, Clever can help!
What is Clever?
Clever connects sellers with top-rated, full-service real estate agents nationwide. As top-performers in their local markets, our partners are experts at selling homes quickly, and for a great price.
In fact, the average time to offer among sellers who list with Clever is 13 days — 2.8x faster than the national average.
What's more, Clever pre-negotiates reduced rates, saving you thousands in commission fees.
Traditional listing agents charge a 3-4% fee. Clever sellers pay a flat listing fee of $3,000, or just 1% if the home sells for more than $350,000.
- Save on fees: Whereas Offerpad and Opendoor charge 6-14% in service fees, the most you’ll pay with Clever is 4% in commission fees.
- Sell your home for more: Since Partner Agents aren’t looking to resell your home for a profit, they strive to get you the best possible price.
- Longer selling process: Unlike selling to an iBuyer, unless you sell to a cash buyer, you’ll have to go through a typical closing process of about 30 days.
As of August 2019, Clever has a 5-star-rating rating on Trustpilot based on 214 reviews.
Next Steps: Get Advice from an Expert
How to go about selling your home is a complex, high-stakes decision.
You need to ensure you’re a) choosing the right option and b) getting the best possible price, given your required timeline and priorities.
The key takeaway is that there’s no single right answer — the best approach for you will ultimately depend on your specific situation and goals.
If you’re currently weighing your options and trying to figure out how to sell fast without sacrificing sale price, Clever can help!
Our team of licensed real estate experts is standing by to answer questions, offer advice, and refer you to different services and solutions to fit your needs.
Importantly, our referral service is 100% free and there’s never an obligation to move forward with any of our recommendations. Fill out the form below to speak with one of our licensed experts!
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Top FAQs About Opendoor and Offerpad
Does Opendoor pay a fair price?
Yes, according to iBuyer expert Mike Delprete, Opendoor does pay fair market value for homes. It makes money via market appreciation and its service fees, which range from 6-14% (average is 7.1%).
Will Opendoor pay closing costs?
Opendoor does not pay typical seller closing costs. Sellers working with Opendoor will be responsible for the service fee and all other seller closing costs such as transfer tax, title insurance, repairs, and escrow fees.
Offerpad does not pay closing costs either. Just like Opendoor, sellers will need to pay the service fee and all other miscellaneous expenses associated with closing on a home.
Does Offerpad negotiate?
Offerpad negotiates with buyers, but not sellers. However, sellers can request that their home be reassessed if they believe Offerpad overlooked an important feature.
Opendoor follows the same model. They will negotiate with buyers and reassess your home, but they will not engage in traditional negotiations.