Open Door, Robo Buyers? What in the world is happening!
So yes this is a real thing, and we are here to debunk any myths and share with you how these people work!
Before we talk about Opendoor, it is important that you know who we are. Just as Opendoor, we are real estate investors. We have been helping people with their real estate needs for several years in our community, and in the past couple years, all over Florida. We are very well known in our community for our reputation and the purpose of this article is to help differentiate us from other investors, that way you feel more comfortable working with us when it’s your time to give us a call. Here is a link with more information about who we are.
Who are the people behind Opendoor?
Opendoor was founded in 2014 in California by a group of professionals from different industries, some of which include real estate, commerce, engineers, etc. Since founding they have expanded to 18 cities all over the country and have over 700 employees. They have references in their website from articles written about them from magazines like Forbes or Bloomberg, but these articles only talk about how they were created and how much money they raised to go into business. They don’t really talk about how they have helped people or if their services work for you as an individual.
As you can see they are pretty big and all over the place, in comparison to us. We are focused on a more personalized experience where we listen to your problems and try to find a solution where we can both benefit and walk away feeling like we all made the right decision.
So, how does Opendoor make money?
Well, that’s a pretty good question. They make money by buying your home at a really deep discount and selling it back into the market to a buyer that wants a home with some equity in order to make a profit. From your point of view, that’s basically what every real estate investor does, right? And yes, you might be right, although that’s pretty much what investors do, the process is always different depending on who you are working with and their level of knowledge in your specific market or neighborhood.
Now open door also has many FEES they charge. We will go into that a bit later but in fact unlike us MOST of their money is made with fees.
Like we said earlier, we have been buying homes in South Florida for several years and with each new home we buy we try to improve our process and the many ways we can help homeowners. With us, you won’t feel like you are dealing with a big corporation that thinks of you as numbers in a spreadsheet, on the very first phone call, you’ll understand that we are here to help you and we are more than positive that you’ll want to know more about how we can help you.
How does Opendoor work?
Based on their website, once you request an offer from Opendoor, they’ll look at the “market data” and come up with a number. Once you accept that offer and sign the contract they’ll come to your home and inspect it in order to come up with the things that you need to fix in order to sell to them.
Otherwise they would just discount it off of the purchase price at closing, yes, you read that right.
Most times you won’t get what they offered you in the first place. That’s a strategy that, unfortunately, a lot of investors use. They lock you in with a contract at an initial price, then once they do their “inspections”, they come up with a lower number plus fees, which is considerably less than what you initially agreed to. Sounds fair? You decide, but that’s definitely not how we work.
Here is a quick overlook of our process:
For Example we just did a deal with Jorge from Miami Gardens
1- Jorge called us on a postcard that he received
2- After we talk, we set up an appointment to go see the property
3- At the appointment we walked the house and filled out our inspection sheet to estimate how much money the house needs
4- We agreed to a fair price and we got a contract signed and we put a deposit for the home
5- Within 2-4 weeks we closed
Now let’s talk about Opendoor fees!!
It is very important for the homeowner to know what fees he or she is going to be paying at the closing table. At the end of the day, that directly correlates with the amount of money you are going to walk away with so you have to make sure both parties are clear about this topic. With us it’s simple, there are no fees. What about Opendoor? Well, in their website, they clearly state that their fees are 6.5%, which include their closing costs. Opendoor says in a traditional home sale the fees are about 10%, I am not really sure where they are getting these numbers in the first place but hey, that’s their math.
What they don’t really tell you, at least not so proudly, is that when you work with them those fees can go up to 13%, yes, you heard that right, thirteen percent. They have that in a really small font in their website. If that seems a bit too high for you it’s because it is.
That would mean that if you sell them your home for $200,000 you might end up paying about $26,000 in fees but the amount they’ll discount at closing for the repairs that need to be made. Does that sound like a good deal to you? That’s up to you to answer.
Like we said before, with us, your fees are 0, not even closing costs. Now that sounds like a good deal to me 🙂
Before you sign a contract with Opendoor
Signing a contract is not something you should do before really doing your homework first. After you sign that contract you are on the hook to sell your home and it is very hard to walk away from a deal after signing that contract in the case you get seller’s remorse or even if you don’t agree with their fees at the closing table. Here are a few things you should do before signing that contract.
1- Make sure you read and understand everything in that contract. If you don’t understand something make sure you ask and demand an explanation.
2- A few of the terms to be in the look out for are: Purchase price, deposit, closing date, inspection and special clauses or additional terms. Make sure you are clear about all of those.
3- If there is something you don’t understand or don’t agree with do not sign the contract hoping you’ll solve it later. You’ll regret it.
4- Make sure you get a different opinion. Contact us and we’ll tell you what we think it’s your best option, free of charge.
Selling your home is a big decision, so you should take the right steps and work with the right people that way at the end, you feel like you made the best decision for you and your family. Do your homework and really research every party involved, it is only going to be beneficial for you. If at the end of the day you feel like Opendoor is best for you, we at least gave you the tools to know how to deal with them or any other company looking to do the same.
Feel free to check us out and definitely give us a call should you have any questions about this topic. We are here to help you and we want you to feel comfortable working with us and have a great experience. Check out our reviews and see what people just like you are saying about us.