Have you noticed all the recent publicity around Opendoor?
If you haven’t, then your about to!
Chances are, if you’ve gotten this far they will know, and you’ll soon start seeing Opendoor ads all around!
Opendoor recently raised approximately $400,000,000 in order to grow their brand, so you can bet a good chunk of that went right into helping bring you through the door.
Are they worth pursuing though? Read more to find out.
Who are the people behind Opendoor?
According to CNBC, Opendoor was founded in 2014 by a roster of tech entrepreneurs, including RentAdvisor co-founder Eric Wu and venture capitalist Keith Rabois. They don’t really call themselves “house flippers.” They are more of a tech company in the real estate field. Their opening market was Phoenix, AZ, and have since expanded to 16 other major metros. There is no plan to slow down, as they expect to be in 50 cities by 2020. They currently purchase $2.5 Billion in homes annually, which is up 225% compared to last year.
My name is Parker Stiles, and I decided to write this article because of the growing attention around this company. On a regular basis we work with sellers that we have either lost property from to Opendoor, or bought property from because they were unhappy with their Opendoor experience. I hope you continue reading to see who is a better fit for you. At the end of the day, we are a real estate solutions based company, and I want the best option for you and your family.
How does Opendoor make money?
The margins that Opendoor buys on are very small, meaning what they pay for the property, plus what they spend to renovate & hold the property, is very close to what they can sell it for. Sometimes even more, meaning they take a loss. Because of this, Opendoor wiggles in a variable fee for its services. This fee starts at 6 percent and rises to 12 percent for more risky properties.
Since the volume of homes purchased is so high, there are certain types of homes, and areas, that Opendoor will not buy in. To find these types of properties or areas, you will need to submit your information personally. Since my company is independently owned and more nimble, it allows me to purchase property in more areas, and with a higher distress level if necessary. We have purchased over 65 homes in the last couple years, and are excited to keep that number growing. We pride ourselves in that “personal touch” that is hard to come by these days, and love showing off what the sellers that work with us have to say afterwards (CLICK HERE).
How does Opendoor work?
What Opendoor says “is supposed” to happen…
- Submit your address and property information.
- Hear from an Opendoor representative & go into detail about your home.
- Receive an offer.
- Opendoor will inspect your home.
- Close and get paid.
What’s the Catch?
Opendoor will not buy in all areas. In areas they do buy in, there are pockets, price ranges, and levels of disrepair they they will not purchase.
This is all done over the virtually, over the phone. If you’re looking for someone to personally guide you through the sales process, you might feel lost. In the past we have helped sellers move, found them probate attorneys, let them stay in the house for a short term after closing, and many other methods of assistance to help this process go as smooth as possible.
This offer is sight unseen and is solely based on online information combined with what you verbally told them about the house’s condition.
Only after you have signed a contract saying you will sell Opendoor their home, will they come out to inspect your property. It is very common for you to skip over certain areas of disrepair when explaining the condition to Opendoor, because it’s your house, and your used to the condition it’s in. So when this inspections is completed, it’s common for the price to be dropped. We make our offers on site, immediately after inspecting, so we know what we can realistically pay for our properties.
If a price is agreed upon, closing will be set and eventually take place. Keep in mind, there will be more fees due at the closing table such as attorney’s fees, closing costs, possible agent commissions, etc. At Barrington, we cover all those costs for you. So the price you see, is what you put in your pocket.
Should you sell your house to Opendoor?
This is 100% your choice, based on the research you have completed. However, either way, it’s important to know that you’re working with an experienced professional! This job is too important to be playing with rookies. Before making a final decision, a quick checklist might look something like:
- Analyze all options for Pros & Cons
- Traditional Listing
- Independent Cash Buyer
- Corporate Buyer
- Make sure your only considering true professionals
- Know your bottom line (how much do you HAVE to take home?)
- Which options can 100% close by your needed date?
Regardless of your decision to list your property, sell to a corporate buyer like Opendoor, or work with a small local home buyer like me, I hope you will at least give Barrington the opportunity to make you an offer. It’s free, and we really place our focus on the situation that you’re in, and making the selling process feel as personal, and stress free as possible.
P.S. If you are interested in selling your home, make sure to check out the current promotions running on our Monthly Incentives Page.