How Does Opendoor Work? | For Sellers | For Buyers | Are Opendoor Offers Legitimate? | Opendoor Fees | How Much Can You Save? | Alternatives to Opendoor | Is Opendoor right for you?
What Is Opendoor?Opendoor is an iBuyer company. It buys houses for cash, usually offering less than fair market value. To get an offer, homeowners enter their home’s information on Opendoor’s website. The offer usually takes just a few minutes, and Opendoor promises a sale within days for qualifying homes. Unlike some iBuyers or “we buy houses for cash” companies that buy fixer uppers, Opendoor focuses on buying move-in ready homes in good condition. Opendoor is best known for buying homes with an instant cash offer, but homeowners can also use the company to list their homes on the market. |
As the nation’s largest iBuyer, Opendoor streamlines the sales process to help homeowners unload their homes quickly. But it has a few drawbacks, like not offering top dollar for the properties it buys.
Working with a real estate agent usually nets you more profit, even if you need to sell your home quickly. Not sure where to find the best agent? Our partners at Clever Real Estate have a concierge service that will match you with top agents in your area – you can interview as many as you like, for free with no obligation.
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How Does Opendoor Work?
Opendoor has options for buyers and sellers. You’ll pay a flat 5% fee if you’re selling your property. It’s slightly lower than a traditional agent commission of 6% but significantly more than the 1% you’ll pay when working with a discount real estate broker.
Homeowners are drawn to Opendoor if they need to sell their homes and get cash in hand within a few weeks. Usually, sellers receive an Opendoor offer within 48 hours and can close in as few as 14 days. Opendoor says it offers flexible timelines for sellers and closing can extend to 60 days.
Opendoor also works with buyers. If you’re looking for a house, search the website for available properties and submit an offer directly online or through your real estate agent. Typically, homebuyers using Opendoor close within 14 to 45 days, making it fast and straightforward to buy a home.
When buying through Opendoor, you won’t pay a fee for their service. However, you’re responsible for the buyer’s closing costs — usually around 2% to 5% of the sale price — no matter how you choose to buy the home.
How Opendoor Works for Sellers
Homeowners submit a questionnaire and photos of their property to Opendoor to begin the offer process. The site doesn’t require photos, but it can help you get a higher offer. They also ask you to record a video walkthrough of your home to provide more information for a more accurate price.
Only certain homes are eligible for an Opendoor offer and meet these criteria:
- Be single family or townhomes, with duplexes and condos eligible in certain markets
- Homes valued between $100,000 and $600,000, although exceptions can be made up to $1.4 million in certain markets
- Have a maximum lot size of 2 acres
- Homes typically must built after 1930
- The home cannot be in a flood zone
- The owner must have a free and clear title of the home
- Be located in a market where Opendoor operates
The company considers several elements to determine your home’s value:
- Unique features and upgrades in your home
- The home’s location
- Recent sales of similar homes (also known as comps)
- Current local market trends
How to Get an Offer From Opendoor
After submitting the online form, you will get an initial offer for your house within 48 hours if your home qualifies. Here’s a step-by-step guide to get an offer from Opendoor:
- Complete Opendoor’s instant offer form on their website. You’ll need information like property address, size, condition, features and photos.
- Check your email inbox for an offer. Opendoor sends you a preliminary offer and may request more information to give you an updated amount.
- Record a video walkthrough of your house. This gives Opendoor more information about your house so they can give you the best price.
- Review the offer. The final offer expires in 7 days. However, you can extend it to 14 days if you schedule a virtual walkthrough.
- Accept the offer. If you’re satisfied with the offer, you’ll sign the purchase agreement and set a closing date.
- Close on the sale. You can choose when to close based on your timeline. Opendoor will transfer the funds within a few days after closing.
Opendoor will do a free virtual assessment from your video walkthrough. If Opendoor requests repairs, the costs come out of your net proceeds. You can cancel the contract with no penalty before closing if you disagree with the requested repairs or think you can get more on the open market.
Generally, you should expect Opendoor to purchase your home below listing price, but that’s a sacrifice some home sellers are willing to make for a cash offer.
It’s a good idea to figure out how much your home is worth before selling to Opendoor so you know how much money you may potentially be leaving on the table. Our friends at Clever can help you weigh your options. With Clever’s cash buyer program, you can match with a top local realtor who can get you offer from iBuyers and compare them with you. They’ll also show you how much you can sell your home for on the open market (and you’ll save money on closing costs, since Clever only charges a 1.5% fee for most home sales).
If you think Opendoor is better, great! But if you think you can get more elsewhere, Clever’s partner agents will help you sell to someone else.
Want to learn more? Just fill out the form below to get started!
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Opendoor Reviews from Sellers
There’s a lot of positives about selling with Opendoor. You might sacrifice some of your profits, but you get out of doing repairs, fixing up the house and scheduling open houses.
However, reviewers didn’t always have nice things to say about the company, and you’ll find many negative reviews on Trustpilot. Overall, commenters noted frustration with a lack of communication and transparency from Opendoor.
The Better Business Bureau (BBB) had a few positive reviews that mentioned how easy and fast it was to sell a home to Opendoor. In addition, those reviewers were happy with the offers they received and got paid quickly.
| “Very Positive” CiCi, ⭐⭐⭐⭐⭐/5 My experience with them was very positive. The entire selling process, from beginning to end, was spelled out step by step on their website. You had to complete one step before you were able to move on to the next step. Uploading the video walkthrough and receiving an OFFICIAL offer was quick and smooth, took a week for the entire process. When they sent us the official offer, it contained a breakdown of the pricing, along with ALL the deductions. The price they offered for our home wasn’t bad considering other homes that sold around us. It wasn’t anywhere near their preliminary offer but you shouldn’t trust that number anyway, their objective is to resell and make money. Unfortunately, they do take a 5% commission, but they don’t require inspections, which is a huge plus and much less time consuming. Source: Trustpilot |
| “$133,000 Less Than My Zestimate” C.D., ⭐/5 Hoping to sell my house without the headache of listing with an agent and having showings, I submitted a request for an Opendoor offer. Upon doing so, I received an initial offer of $623K, which is about $133K less than my Zestimate, and about $160K-$190K than any list price a Realtor has quoted me (I’ve spoken with three). Given how low the offer was, I decided to call corporate instead. I spoke with a receptionist who also agreed something was off and said a rep would call me today, at 11AM my time. He/She never called, so I phoned the office again, and was told to keep waiting (as though I don’t have a full-time job myself) for the rep to call. It was also noted, however, that he/she might need to reschedule. Two hours later: still no call. No effort to reschedule, either. Overall, I’d rate this company very poorly for unreliable service, inconsistent offer prices, and difficulty getting in touch with anyone who might actually be able to address an issue. Looks like I’ll be listing my house after all… Source: Trustpilot |
| “No Respect for Timeliness of Deadlines or Contracts” Amy G., ⭐/5 The worst company I’ve ever had the great displeasure of doing business with. They lack professionalism and care on all levels. Unethical, no respect for timeliness of deadlines or legally binding contracts. Is truly a company I’d run fast from if you are approached by them. Better to give your house away or let it fall over before entering into a ******* deal with these crooked people. Source: Better Business Bureau |
Opendoor Pros and Cons for Sellers, According to Online Reviews
To sum it up, this is what sellers had to say about the good and bad parts of selling with Opendoor.
| ✅ Pros | ❌ Cons |
|---|---|
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How Opendoor Works for Buyers
Opendoor’s website lists hundreds of homes for sale, including homes they own and listings from the MLS (multiple listing service). If you see a property you like, you can tour it at your convenience between 6 a.m. and 9 p.m. daily.
Buying a house with Opendoor is straightforward. You can submit an offer directly or through your agent and you’ll typically get a response within a day or two. If your offer is accepted, you’ll sign a purchase agreement and move forward with the home buying process.
You can close on your home within two to five weeks. Buyers pay around 2% to 5% of the sale price in closing costs.
Can you negotiate with Opendoor?
Opendoor rarely negotiates with customers, but you may have more leverage working with an agent. Opendoor says they will work with you to find a price that’s fair for both parties, so there may be some wiggle room to negotiate — but don’t expect any major changes.
If you want your best shot at negotiating a home purchase with Opendoor (or any other seller), you should have an agent by your side.
If you’re looking for a great local agent, try out our partners at Clever Real Estate. Clever partners with expert agents from companies like Coldwell Banker, RE/MAX, and Keller Williams — and in 41 states, buyers can receive cash back on home sales just for using Clever.
🏡 Earn cash back when you buy a home
Did you know that 41 states and Washington D.C. allow cash rebates after closing? Our friends at Clever Real Estate can get you 0.5% cash back, just for finding a qualified local realtor through their network.
Opendoor Reviews From Buyers
Many reviews on BBB state they had trouble accessing self-guided home tours using the Opendoor app.
The app scans the home’s code when you arrive and is supposed to unlock it. However, one user stated an Opendoor representative told her she could not tour the house without one of their agents present.
Some buyers were concerned with Opendoor’s customer service response time. But, mostly, there is a general sense that the “deck is stacked” in Opendoor’s favor.
| “Experienced Discrimination” Angie H., ⭐/5 Experienced discrimination by Opendoor and ************ who told me that I must be accompanied by an agent if I want to tour their SELF TOUR homes. When asked why, especially since I have other investor partners who also currently use the app to SELF TOUR, I was told by this person that he was unable to tell me why. When I asked for him to have someone call me, he flat said no. Source: BBB |
| “Never Heard From Them Again” Keith, ⭐/5 Offerpad is terrible. Went to look at a house that they are selling in Clayton, NC and it looks pretty good. Needs some updates but overall not a bad place. I submitted my offer and waited to hear back from them. the responded about a day latter and said they had multiple offers and wanted our best offer. They gave a deadline that was 2 days latter to get the offers in so we easily made it. And that’s it, never heard from them again. No response, house is still on the market and they won’t answer the phone. Source: Yelp |
Opendoor Pros and Cons for Buyers
Overall, this is what Opendoor reviewers had to say about buying a house with the iBuyer.
| ✅ Pros | ❌ Cons |
|---|---|
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Are Opendoor Offers Legitimate?
Yes, Opendoor’s offers are legitimate. The company launched in 2014 in San Francisco and has helped thousands of customers.
Their primary business model profits from charging service fees when buying property from sellers. They can also make money from selling a home for more than they paid.
Opendoor has a decent reputation for making fair home offers, while other iBuyers may be more likely to low-ball sellers.
Opendoor Fees
Opendoor’s fees are a little lower than its competitors. Whether you sell your home to Opendoor or list with them, the fee remains at 5% — nearly the same as working with a real estate agent. You can sell directly to Opendoor or list your home with them on the open market.
| Expense | Selling to Opendoor | Listing With Opendoor |
|---|---|---|
| Service fee | 5% | 5% |
| Estimated closing cost | 1% | 1% |
| Estimated seller concessions | None | 0-2% |
| Repairs | Varies (based on Opendoor assessment) | Varies (based on buyer inspection) |
How Much Can You Save With Opendoor?
Opendoor charges a 5% service fee to buy or list your home. Sellers save little money on fees since traditional real estate commissions are around 6%. However, our partners at Clever Real Estate can connect you with top, local real estate agents who can help sell your home for a 1.5% fee.
For example, the average new home sales price in the U.S. was $511,400 as of May 2022, according to the U.S. Census Bureau. Based on that price, here’s what you can expect to pay in commission or service fees:
- Traditional Realtor Fees (6% total): $30,684
- Opendoor Fees (5%): $25,570
- Clever Real Estate Realtor Fees (4.5% total): $23,013
However, you must also consider the impact on profit of the different options. An iBuyer like Opendoor generally offers below fair market value. Listing on the market through an agent can increase your sales price and your profits.
But don’t just take our word for it — have a realtor get you offers from iBuyers, compare them, and then see how much you could sell for on the open market. That’s what you can do with Clever’s cash buyer program.
Here’s how it works: Plug in your ZIP code below and you’ll be contacted by a Clever agent. They’ll match you with up to three local realtors who can help you compare offers from cash buyers.Use their expert knowledge to decide how and where you want to sell. You might make more from Opendoor than putting your home on the market, or vice versa!
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How Opendoor Compares to Other iBuyers
Among similar iBuyer firms, Opendoor’s fees are slightly lower. Here’s how it compares.
| Company | Fees | Avg. Rating | Locations | Incentives |
|---|---|---|---|---|
| Opendoor | 5-7% | 4.3/5 | AL, AZ, CA, CO, FL, GA, ID, IN, MN, MO, NV, NJ, NY, NC, OH, OK, OR, SC, TN, TX, UT, VA | Buying, selling |
| Offerpad | 6-11% | 3.7/5 | AL, AZ, CA, CO, FL, GA, IL, IN, KS, MO, NV, NC, OH, SC, TN, TX, UT | Bundle rewards for selling, buying, financing |
| RedfinNow | 5-13% | 4.3/5 | AZ, CA, CO, GA, IL, MD, MA, MN, NV, NC, OR, TX, VA, WA, DC | Rebates depending on the resident state. |
| WeBuyHouses | None | 4.6/5 | AZ, CA, CO, CT, DC, FL, GA, ID, IL, KS, MA, MD, MI, MN, PA, TX | None |
Opendoor vs. Offerpad
Offerpad’s fees are similar to Opendoor’s, but Offerpad penalizes sellers who withdraw more than four days after the inspection report with a fee. Also, Offerpad has a history of making lower offers to sellers compared to Opendoor.
Opendoor vs. RedfinNow
Opendoor is more likely to give you a competitive offer than Redfin. Also, Opendoor is available in more areas than Redfin, so you’ll have better luck connecting with an agent.
Opendoor vs. WeBuyHouses
While Opendoor prefers homes in good condition, WeBuyHouses can buy homes in poor condition that need repairs. To offset those costs, WeBuyHouses will offer you less than the value to compensate for the cost of fixing it up.
Is Opendoor right for you?
Opendoor is an option for homeowners who do not want the hassle of selling their house traditionally. However, choosing this path means you won’t get top dollar for your home.
If you want some free advice, try our friends at Clever Real Estate. With Clever’s cash buyer program, you’ll get a realtor by your side who can get you offers from cash buyers. Then, they’ll help you compare those offers and see what price is best for you.
If you choose to sell with a Clever agent, you’ll only pay 1.5% ($3,000 minimum). Or, you may need to sell fast and a cash buyer offer may be the best route. Either way, you’ll make an informed decision.
Interested in learning more? Fill out the form below to get started!
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Recommended Reading
FAQs about Opendoor
Are Opendoor offers legitimate?
Opendoor’s offers are legitimate. Their primary business model profits from charging service fees when buying property from sellers. They can also make money from selling a home for more than they paid. Learn more about the legitimacy of Opendoor’s offers.
Can you negotiate with Opendoor?
Opendoor rarely negotiates with customers, but agents might have more leverage. There may be some wiggle room to negotiate — but don’t expect any major changes. Learn more about whether Opendoor negotiates with customers.
Is Opendoor competitive?
Opendoor is more likely to give you a competitive offer than Redfin. Also, Opendoor is available in more areas than Redfin, so you’ll have better luck connecting with an agent. Learn more about how Opendoor compares to other iBuyers.