What do we think about OpenDoor?

[Amy Ranae]

Recently an investor friend mentioned OpenDoor. I hadn't heard of it so I looked it up. A few days later I received a mailer from them that they'll make me an as/is cash offer for my house and close whenever I want. I realize this isn't anything new, but they've got some good tech and really nice branding. 

From what I can tell, they are a brokerage/wholesaler.

What are your thoughts and experience on this? I asked them to make me an offer on my house, to see how it works, and who nows, if its decent, I might just take it.

[Wes Blackwell]

@Amy Ranae

Yes, they are a broker as well. They charge 6.5% service fee (more than the 5-6% commission you would be charged by a typical broker). See here: https://www.opendoor.com/w/pricing/

What I suggest doing is looking up homes on OpenDoor and seeing what they sold for before they flipped them. If you take into account the service fee and the spread after the sale, the total typical "cost/lost opportunity" to the original home seller is 12-13%. WAAAAY more expensive than a typical broker commission.

Yeah, they may do a little work to it and what not, but put plainly as a seller you're trading a higher price for a faster sale with more convenience. And there will always be a certain percentage of the market willing to make that trade. But as an agent you already know what most sellers want is a high price and that's it. They'll even wait for it.

OpenDoor makes it seem like you're actually getting more by using some creative math on their pricing page above. But anyone with a high school diploma should instantly see through the malarky and realize that OpenDoor's offer price is going to be nowhere near what you'd receive on the open market. Especially when you consider how multiple offers can create a bidding war and easily get sellers $5-10k more for their home based on that fact alone. 

In hot seller's markets like Phoenix and Sacramento you'd be a fool to take an offer from them when you could easily get 3-4 offers in the course of a weekend.