Offerpad vs. Opendoor: Exploring the Key Distinctions Between iBuyers
Opendoor and Offerpad face significant risks due to the impending recession in the housing market. Both companies have suffered significant losses in 2022. Opendoor and Offerpad have purchased fewer properties and made lower cash offers to reduce their losses. However, these steps are insufficient.
Is it wise to sell your property to any of them in this situation?
Choosing an MLS listing may be more advantageous. You may obtain the total value of your home by putting it on the MLS through a cash buyer marketplace like Houzeo. Houzeo allows you to get your property on the MLS within 24 hours, and you may also evaluate bids from several national and local cash buyers.
Offerpad vs. Opendoor: An Overview
Offerpad and Opendoor are two iBuyers that use technology to make fast cash bids on properties. Offerpad was founded exactly one year after Opendoor in 2015, and as a result, they have some commonalities.
- Opendoor and Offerpad often pay between 70% and 80% of a home’s FMV.
- Both iBuyers’ final cash offer is frequently lower than their original offer.
- Both Offerpad and Opendoor have substantial service costs.
Offerpad, on the other hand, adds a new wrinkle. If you cancel the sale four days before closing, Offerpad will charge you a 1% cancellation fee.
How Do Offerpad and Opendoor Work?
Let’s look at the differences between Offerpad and Opendoor’s working processes:
How Does Offerpad Work?
Here are the procedures involved when selling your house to Offerpad:
- π° Request an Offer: Fill out the form on Offerpad’s website, providing detailed information about your house, including size, number of bedrooms, curb appeal, appliance type, and any modifications. You can also upload pictures or a 15-minute video of your house.
- π’ Calculation: Offerpad utilizes their AI-powered technology, an automated valuation model, along with input from their team of experts, to generate an offer for your property.
- π¨ββοΈ Response: You have the opportunity to accept or reject the offer presented by Offerpad. You have a 4-day window to make your decision. If you choose to reject the offer, there is no room for negotiation. On the other hand, if you accept the offer, you can complete the remaining steps online, including specifying the closing date and selecting a local move service, among other details.
- π¨ Inspection and Repairs: Within 15 days of accepting the offer, Offerpad sends an inspection team to assess the condition of the house. If any repair work is necessary, you have the following options:
- π Closing: Offerpad engages a title company or attorney to facilitate the closing process. You finalize the sale by signing the necessary documents and receiving the proceeds from the transaction.
How Opendoor Works
Here is a breakdown of the process involved when selling your house to Opendoor:
- π» Request an offer: Provide your address and basic information, including details about the condition and characteristics of your property, either through Opendoor’s online estimate form or their mobile app. Opendoor will research and evaluate the housing market to generate a preliminary offer for your home. You are under no obligation to accept this offer.
- π Virtual home tour: If you decide to proceed, Opendoor will assess the condition of your property by scheduling a free home assessment. Typically, the assessment takes about 10-15 minutes. This can be done through a live video session with a company representative or by submitting pictures and videos taken by the homeowner. The virtual walkthrough serves as an initial screening process before the next phase, which is the inspection.
- π Schedule an inspection: Opendoor will also send an estimator to evaluate the exterior of your house. Roughly 24 to 48 hours after these assessments, Opendoor will present a finalized offer for your home. If you disagree with the final assessment results, you have the option to cancel the deal without incurring any penalties up until the closing.
- πΈ Close the sale: If you decide to sell to Opendoor, you can proceed to close the transaction quickly. Sellers have the flexibility to close within a timeframe of 14 to 60 days. Before closing, you will need to upload information to an online dashboard to ensure that your home remains in the same condition as when the assessment took place. A few days after the closing, you will receive the proceeds from the sale of your home.
How Much Will Offerpad and Opendoor Pay for a House?
Offerpad and Opendoor often offer between 70% and 80% of a home’s Fair Market Value (FMV).
Opendoor and Offerpad have various ways of calculating repair expenses. Opendoor deducts the repair costs straight from the final offer they submit, whereas Offerpad gives you an option.
You can sell your home as-is and allow Offerpad to deduct the repair charges, or you may engage a contractor and conduct the repairs yourself.
Offerpad vs. Opendoor Service Charges
Opendoor and Offerpad fees are similar:
Offerpad Fees
| Offerpad Express | 6% |
| Offerpad Flex | 6% |
| Closing Costs | 1% to 3% |
| Repair Costs | 1% to 2% |
| π© Cancellation fee | 1% (if you cancel post the 4-day-cancellation windows) |
| Total Cost | 8% to 12% |
Offerpad makes it mandatory to use their title company. This does not cost you anything extra but generates additional revenue for them.
Opendoor Fees
| Service Fee | 5% |
| Closing Costs | 1-3% |
| Repair Costs | 1-2% |
| Total Fees | 7-10% |
Opendoor’s charges are directly subtracted from the purchase price.
What Type of Houses Does Offerpad Buy?
For Offerpad to consider purchasing your house, it must meet their specific criteria. Offerpad is selective about the homes they acquire, which has been a point of concern according to various Offerpad reviews. Here are the key requirements:
- π Location: The property should be located within one of the 22 markets covered by Offerpad.
- π Type of Homes: Offerpad purchases residential properties, including single-family homes, condos, and townhouses.
- π° Value: Offerpad considers homes with a value below $1 million, although this may also depend on the specific market.
- π² Plot Size: The property should be situated on a plot of land that is more than 1 acre in size.
- π Year Built: Offerpad typically focuses on homes built after 1960.
What Type of Houses Does Opendoor Buy?
Opendoor also has specific criteria and terms that a home must meet for a successful sale. Here are some of the requirements:
- π° Value: Opendoor considers homes with values ranging from $100,000 to $600,000, although, in high-demand housing markets, they may consider homes valued up to $1.4 million.
- π Type of Homes: Opendoor buys various types of properties, including single-family homes, townhouses, duplexes, and condos.
- π² Plot Size: The property’s lot size should generally not exceed 1-2 acres, with the specific limit depending on the market.
- π Year Built: Opendoor typically focuses on homes built after the year 1930.
- π‘ Condition: Opendoor generally prefers owner-occupied homes.
Offerpad vs. Opendoor Reviews: A Comparison
Let’s examine the reviews of Offerpad and Opendoor to determine which option is preferred.
Offerpad.com Reviews:
Most Offerpad reviews are generally positive, with an average rating of 3.9 out of 5 stars. However, it’s important to note that opinions vary among home sellers, and there are some complaints about this iBuyer.
Here are ratings from various platforms based on a sample size of reviews:
- Yelp: 1.5/5 (58 reviews)
- Reviews.io: 2.1/5 (21 reviews)
- Sitejabber: 4.5/5 (27,486 reviews)
Opendoor.com Reviews:
Customer reviews indicate that using Opendoor is convenient, and many people have found great benefits in terms of simplicity. Opendoor has received a rating of 4.3/5 across 3000+ reviews from platforms like Reviews.io, Yelp, and Better Business Bureau.
Here are ratings from some platforms:
- Reviews.io: 4.4/5 (3,126 reviews)
- Yelp: 3/5 (224 reviews)
It’s evident that Opendoor generally has more positive reviews and higher ratings than Offerpad. However, it’s crucial to thoroughly assess the reviews and consider individual experiences before deciding.
Offerpad vs. Opendoor: Which One Should You Choose?
When deciding between Offerpad and Opendoor, it’s important to consider the strengths and weaknesses of each.
Reasons to Consider Opendoor:
- Opendoor tends to offer higher prices for the homes it purchases.
- It operates in a larger number of markets compared to Offerpad (45 markets for Opendoor vs. 22 markets for Offerpad).
- Opendoor provides more flexibility to buyers.
- There is no cancellation fee with Opendoor.
Reasons to Consider Offerpad:
- If your house is valued at over $500,000, Offerpad may be a better choice.
- If you are in a time crunch to sell your house, Offerpad offers a faster process.
The best approach is to request risk-free, no-obligation offers from both Offerpad and Opendoor. Gathering multiple offers can help ensure the best possible sale price and favorable terms for your property.
Offepad vs. Opendoor Alternatives
If you’re seeking alternatives to Opendoor and Offerpad for selling your house quickly for cash, consider these two superior options:
- Houzeo: Houzeo is an FSBO website that lets you list your house on the MLS. By utilizing Houzeo, you can receive offers from various national and local cash house buyers, which can potentially increase the value of your property.
- HomeVestors: HomeVestors is a cash home buyer company that typically offers between 70% of your property’s FMV. It’s worth mentioning that the level of service and care you receive may vary as each HomeVestors office is independently owned.
By considering these alternatives, you can explore options that may better suit your needs and potentially offer more favorable terms for selling your house quickly for cash.
Frequently Asked Questions
1. Who is better Opendoor or Offerpad?
Opendoor emerges as a more advantageous choice over Offerpad due to several reasons:
1. Opendoor does not impose any cancellation fees, setting it apart from Offerpad
2. Opendoor tends to present better offers compared to Offerpad
3. Opendoor offers greater flexibility when it comes to closing timelines.
related: opendoor competitors, what is offerpad, offerpad fees, does opendoor buy homes, open door fees, opendoor las vegas, opendoor com reviews, offerpad atlanta, opendoor atlanta, how does opendoor make money, how much does, offerup charge sellers, offerpad las vegas, offerpad jobs, what commission does lennar pay realtors, offer up service fee, does offer, up have fees, who owns offerpad, how much does offerup charge for selling, open door homes for rent, opendoor austin, orchard vs opendoor, offer pad, opendoor vs zillow, offerpad vs open door, knock vs opendoor, offerpad vs opendoor vs knock, opendoor offerpad,
