✍️ Editor's take: Offerpad promises sellers the certainty of a cash offer and a fast closing on a date you choose. But Offerpad's restrictive purchase agreement, hidden cancellation fee, and negative online reviews suggest it's riskier than other iBuyers.
Offerpad is an iBuyer that provides cash offers to sellers in 14 U.S. cities. The company also sells homes and offers an MLS listing service.
Like other iBuyers, Offerpad aims to streamline real estate transactions. Using proprietary technology and an in-house team, Offerpad promises to provide cash offers within 24 hours and allow sellers to close in as little as 10 days.
However, these perks can come at a cost. Though Offerpad claims to pay fair market value, its customers sacrifice the opportunity to potentially net more on the open market.
While this tradeoff is true of all iBuyers, Offerpad appears to have problems with customer service and the cost and quality of its repairs.
Launched in mid-2015, Offerpad was the second-ever iBuyer after Opendoor. After a quiet start, the company raised $260 million in 2017 and began to expand across the U.S.
Like its competitors, Offerpad’s goal is to rethink the way real estate transactions unfold. Its cash offers provide an alternative to the time-consuming and uncertain process of preparing, listing, and marketing a home on the open market.
Once Offerpad purchases homes from sellers, it completes any repairs or renovations before selling homes directly to buyers.
In exchange for these services, Offerpad charges sellers a 6-10% fee (typically around 7%), plus closing costs.
Does your home qualify for Offerpad?
Because Offerpad expects to earn a profit by reselling homes, it’s selective about the homes it purchases.
Homes only qualify if they are:
- Within one of the 16 cities Offerpad serves
- A single-family residence that isn’t manufactured, pre-fab, or mobile
- Built after 1960
- Worth less than $500,000-$600,000
- On less than one acre of land
If your home doesn’t meet these criteria, Offerpad will not purchase your home.
Other disqualifying factors may come up later in the process. For example, Offerpad may back out if there are problems with your home’s title or if the inspection reveals significant structural or foundation issues.
Who should use Offerpad?
✅ Offerpad’s cash offers are worth considering if…
❌ You may want to avoid Offerpad’s cash offers if…
✅ Buying from Offerpad is worth considering if…
❌ You may want to avoid buying from Offerpad if…
Offerpad buys and sells homes in 16 U.S. cities across nine states:
- Alabama: Birmingham
- Arizona: Phoenix, Tucson
- Colorado: Denver
- Florida: Jacksonville, Orlando, Tampa
- Georgia: Atlanta
- Nevada: Las Vegas
- North Carolina: Charlotte, Raleigh
- Tennessee: Nashville
- Texas: Austin, Dallas-Fort Worth, Houston, San Antonio
Offerpad is a legitimate business that buys and sells homes. However, we found that it’s less transparent and more rigid than some competitors in the iBuying space, such as Opendoor.
Offerpad is a private company, so information about its financials isn’t readily available to the public. But real estate expert Mike DelPrete’s analysis of the iBuying space reveals that the business model is unlikely to be profitable. In fact, Offerpad competitors Opendoor and Zillow lose money by buying and selling homes.
Offerpad relies on two strategies for earning money:
- Service fees that cover the costs of holding and selling homes
- Reselling homes for profit
But given the iBuying space’s difficult margins, Offerpad almost certainly faces pressure to maximize its profit on every transaction. In practice, this can manifest as offer prices and fees that leave sellers feeling nickel and dimed.
Otherwise, transactions won't facilitate growth — or even maintain its bottom line.
Offerpad’s reviews reveal some highs and lows — but overall, they skew negative compared to other iBuyers.
As of February 2020, Offerpad has an average star rating of 1.77, according to 57 unique reviews across three platforms:
Additionally, Offerpad has 15 Yelp reviews that are not factored into its star rating.
While some customers praised Offerpad’s hassle-free approach to cash offers, other customers ran into difficulties that left them feeling nickel and dimed.
We found that:
- 32% of reviews mention repairs that were overpriced or poor quality
- 26% of reviews mention customer service issues — especially delays in communication
Complaints included issues with both Offerpad’s third-party vendors and the company itself.
Offerpad’s Better Business Bureau profile also reflects its struggles with customer service and repairs. Although it has an A+ rating, it also has 57 complaints.
Here’s what Offerpad customers had to say about their experience:
Britney L. struggled with unexpected repair costs and price adjustments while working with Offerpad, which ultimately impacted her plans to purchase another home.
Steve W. appreciated that Offerpad’s process was relatively fast and hassle-free — but was less enthusiastic about a surprise clean-up fee and hefty service charge.
Rachel E. needed to sell her old, outdated childhood home but didn’t have the time or resources to prepare it for listing. She was grateful for Offerpad’s as-is offer and flexibility on closing.
Whether you’re buying or selling a home, you’ll work with a combination of Offerpad’s in-house team and its third-party vendors.
Offerpad employees rely on their professional real estate experience and the company’s unique algorithm to analyze homes submitted online.
This process allows Offerpad to set cash offers based on fair market value, as well as establish prices for homes available for sale.
It also means that instead of working with a real estate agent, you’ll probably have several points of contact throughout the process.
If you already have an agent, you can sell to Offerpad through them — but you may still have to pay their commission. If you’re buying a home with an agent, Offerpad will pay a standard 3% commissionat no cost to you.
Step 1: Submit your information
To receive an initial cash offer, you’ll have to submit all the details about your home to Offerpad.
The website will guide you through a brief questionnaire, prompting you to provide:
- Your home's square footage
- When it was built
- The layout of the house
- Permitted and unpermitted additions
- Countertops and flooring
- Your desired closing date
You’ll also have the opportunity to submit photos of your home — which is highly recommended as images will help Offerpad produce an accurate price estimate.
If your property meets Offerpad’s criteria, you can receive an initial cash offer within 24 hours.
📢 When can Offerpad back out of a deal?
Translation: Offerpad can change its offer price and repair credits at any time during the transaction. If you don't agree with the changes, Offerpad can back out without penalty.
For example, if Offerpad says it will pay $300,000 for your home, then changes the offer to $250,000, you might object — but you'll have to agree, or Offerpad can walk away.
Once you receive your initial cash offer, you’ll face your first big decision: whether or not to accept. You’ll have four days to decide, after which your offer will expire. (After this point, you can renew your offer — but it may be higher, lower, or the same.)
When you accept Offerpad’s cash offer, you’ll have to sign a legally binding contract to progress to the next step — without actually knowing how much money you’ll ultimately receive from the sale.
📢 How accurate is Offerpad's initial cash offer?
Translation: Although Offerpad tries to provide an accurate cash offer from the start, it reserves the right to charge a repair credit after the inspection, or to adjust your cash offer, after the inspection stage.
By contrast, other iBuyers such as Opendoor only require a contract after the inspection, when you know exactly how much money you'll receive for your home.
If you feel the offer is too low, you can question Offerpad’s reasoning or point out anything the company may have missed. However, there’s no guarantee that Offerpad will adjust its offer.
Step 3: Complete the inspection
The day after you and Offerpad sign the contract, your inspection period will begin. Within 15 days, Offerpad will send a third-party inspector to your property.
This part of the process will be the same as a traditional sale. The inspector will spend about two hours combing over every inch of your property, looking for issues such as water damage, structural problems, or general wear-and-tear.
Offerpad requires homeowners to be present for the inspection, so it’s a good idea to follow along and ask questions as the inspector evaluates your property. This can help you avoid any surprises.
Step 4: Receive an updated offer
After the inspection, Offerpad will provide a list of repairs it deems necessary — as well as the estimated cost of completing them.
At this point, Offerpad might also update its cash offer — or back out entirely, if your home doesn’t meet its criteria.
If you’re able to move forward, you’ll have two options for how to proceed:
- Accept a credit equivalent to the cost of repairs
- Agree to hire contractors to make the repairs to Offerpad’s specifications
Note that for especially pricey repairs, you may be required to agree to Offerpad’s repair credit to proceed with the transaction.
Our conversations with Offerpad employees revealed a troubling red flag at the inspection phase. If you want to reject Offerpad’s updated offer, you only have four days to do so — after which you’ll be charged a cancellation fee equivalent to 1% of the offer price.
This is a tight window that would make it difficult to conduct your own inspection, receive estimates from contractors, or negotiate with Offerpad.
Step 5: Closing
One of Offerpad’s key services is to offer flexible closing dates. You can schedule your closing date anywhere from eight to 90 days after accepting Offerpad’s cash offer.
You can also arrange to stay in your home up to three days after closing through the company’s Extended Stay program.
Two days before closing, Offerpad will schedule a walk-through to ensure all repairs have been completed. (Unfinished or inadequate repairs could delay closing.)
If everything looks good, you can proceed to the closing table. You’ll be responsible for paying closing costs (typically 1-3% of the purchase price).
Offerpad uses third-party vendors for title services, depending on your location:
- In Arizona, Florida, Nevada, and Texas, Offerpad uses First American Title
- In Alabama, Offerpad uses Statewide Title Services
- In Georgia, Offerpad uses the law offices of McMichael & Gray
- In North Carolina and South Carolina, Offerpad uses the law offices of Hankin & Pack
At closing, you’ll receive a check for your net proceeds — the cash offer price, minus Offerpad’s service fee, closing costs, and any repair credits.
If you decide to sell your home to Offerpad, you’ll encounter several fees that may or may not be competitive with a traditional real estate sale in your area.
In total, you’ll spend 7-13% of your home’s purchase price on service fees and closing, plus a variable repair fee. In some cases, you may also encounter a 1% cancellation fee.
6-10% of offer price (typically around 7%)
1-3% of offer price
Variable, from $0 to tens of thousands
1% of offer price if you cancel outside the four day post inspection report window
Step 1: Get prequalified for a mortgage
To buy a home through Offerpad, you’ll have to be prequalified for a mortgage.
In this stage, you’ll gather all of the information about your financial history, such as your credit score and any debt you currently have. A lender will review your self-reported information and recommend home loans you might qualify for.
Note that this is different from pre-approval, which is not exclusively self-reported.
Step 2: Browse homes online
Similar to Zillow or Redfin, Offerpad has an online portal listing available homes in a given area.
You can filter results based on your criteria, such as the number of bedrooms or the square footage.
Step 3: Download the app
Rather than in-person tours, Offerpad allows prospective buyers to enter and tour properties on their own schedules.
Once you download the Offerpad app and verify your identity, you can use your smartphone to unlock Offerpad properties you’re interested in.
You can view homes any time between 6:00 am and 8:00 pm, seven days a week.
Step 4: Make an offer
If you find your dream home through Offerpad, you can make an offer with or without an agent’s representation. If you already have an agent, Offerpad will provide 3% buyer’s agent commission.
If your offer is accepted, you’ll have to work with Offerpad’s third-party lender, loanDepot, which has a 3.6 star rating on Trustpilot (based on 3,149 reviews).
📢 Are Offerpad's listing prices fair?
Offerpad uses a combination of proprietary software and in-house professionals to price homes for sale. After your offer is accepted, you'll be required to abide by the appraisal provided by Offerpad's vendor, loanDepot. Some online reviews note that loanDepot's estimates may not align with other lenders in the area.
Step 5: Closing
If you’re buying a home directly from Offerpad, you can schedule a closing date at your convenience — which can help you coordinate the timing if you’re also selling your home.
Offerpad uses third-party vendors for title services, depending on your location.
Free local move
If you’re moving within a 50 mile radius, Offerpad will cover the cost of your move. Depending on the size of your home, this is an estimated $560-1,100 value.
To provide this service, Offerpad partners with Bellhop, a third-party vendor with a 4.5 star rating on Trustpilot (based on 2,345 reviews). On the day of your move, Bellhop will pick up your belongings and deliver them to your new home.
One caveat: Bellhop does not provide any packing supplies or services. If you want your items to be boxed, wrapped, or protected, you’ll need to do so yourself in advance.
Offerpad allows sellers to stay in their old home for up to three days after closing, providing some breathing room for a less stressful move.
To be eligible, you’ll first have to complete a Post-Possession Addendum. This contract allows you to legally remain on the premises after selling your home, and it outlines the specific dates and deadlines you’ll have to abide by.
If you take advantage of this option, Offerpad will temporarily withhold $3,000 from the proceeds of your home sale. Once you vacate the home, Offerpad will inspect the property to make sure it’s in good condition and release the funds back to you.
If you’re interested in touring an Offerpad listing, you can take advantage of the company’s Instant Access tool.
To use Instant Access, you can:
- Download Offerpad’s app via iTunes or the Google Play Store
- Take a selfie with your smartphone
- Submit your U.S. driver’s license
Once you’ve verified your identity, you can walk up to the front door of any Offerpad home you’re interested in and request access via your smartphone. The door will automatically unlock, allowing you to tour the property at your convenience.
Properties can be unlocked any time between 6:00 am and 8:00 pm, seven days a week, meaning that you never have to schedule tours or attend an open house.
If you’re planning to purchase a home after selling your existing one, Offerpad may be able to coordinate the timing through its trade-in program.
You can choose any home — regardless of whether it’s an Offerpad-owned home, MLS listing, or new build — and then sell your current home to Offerpad to ensure the dates align.
This program currently available in about half of Offerpad’s service areas:
- Phoenix, AZ
- Atlanta, GA
- Orlando, FL
- Tampa, FL
- Las Vegas, NV
- Charlotte, NC
How does Offerpad compare to alternatives?
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
If you’re prioritizing speed over getting top dollar for your home, iBuyers may be a good option for you.
However, regardless of your situation, your home is an incredibly high-value asset. It's always worth exploring every option before choosing how to sell.
We encourage sellers to interview with qualified local agents to see if they can help you evaluate your options.
If you're looking to sell your home fast and are unsure of which way to go, Clever can help!
Get in touch to speak with our team of real estate experts who can help assess your situation and connect you with the best solutions for your needs.
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Forbes. "Startup OfferPad Raises $260M Debt, Equity To Upend Homes Sales Market In Competition With Opendoor." Accessed February 10, 2021. Updated January 25, 2017.
FINSMES. "OfferPad Raises $260M in Funding." Accessed February 10, 2021. Updated January 25, 2017.
Offerpad. "Questions about selling." Accessed February 10, 2021.
Offerpad. "Free local move." Accessed February 10, 2021.
Thumbtack. "How much do movers cost?." Accessed February 10, 2021. Updated October 6, 2020.
Offerpad. "Offerpad’s extended stay." Accessed February 10, 2021.
Offerpad. "Tour Offerpad homes on your schedule." Accessed February 10, 2021.
Offerpad. "Trade-in and move on." Accessed February 10, 2021.