Opendoor and Offerpad both provide sellers a way to sell their homes 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 commissions, most iBuyers charge service fees to offset their carrying costs and ensure a margin on each transaction.
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.
» READ: Our Opendoor Guide
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 hours. You can either accept, decline, or, if you think your home has been undervalued, submit additional information to 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 and handle them after you move out. Or you can choose to handle the repairs yourself (as long as they meet Opendoor's standards).
- Close on the home: When the assessment is finished, you can set your own closing date. At closing, you’ll pay a 5% Opendoor service fee plus traditional seller closing costs.
» Find out if your home qualifies for an instant, no-obligation cash offer.
Pros
- 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 them after you move out.
- Fast and flexible sale timeline: With Opendoor, closing timelines are flexible. You can schedule closing to align with your new home purchase or other requirements.
Cons
- 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 21 U.S. metro areas: Opendoor only operates in 21 U.S. metro areas. If you are located outside of these areas, you cannot use the service.
Opendoor Reviews
As of October 20, 2020, Opendoor's average customer rating is 3.79/5 based on 962 reviews.
- Reviews.io: 4.01/5 (748 reviews)
- Yelp: 3/5 (214 reviews)
- Better Business Bureau: A+
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%.
» READ: Our Offerpad Guide
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 them 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 10 days, but you can have up to 90 days to close if need be.
Pros
- Fast cash offers: Qualifying homes receive offers within 24 hours.
- Choose your closing date: Sellers can close on their home within just 10 days in some markets.
Cons
- 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%.
- Limited availability: Offerpad only operates in 14 U.S. metro areas.
Offerpad Reviews
As of October 20, 2020, Offerpad's average customer rating is 2.1/5 based on 53 reviews.
- Reviews.io: 2.17/5 (6 reviews)
- Yelp: 1.5/5 (20 reviews)
- Sitejabber: 2.53/5 (27 reviews)
- Better Business Bureau: A+
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 fee of 5%.
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.