You have to keep your home ready for showing to potential buyers constantly. You are always worried about buying offers. And finally while the consummation of the deal you should negotiate the price. No matter if you sell a home for the first time or you did it 5 or 10 times, the process still stays stressful and tensional. Fortunately, the Opendoor service can help you to make buying and selling easier and more transparent. It is achieved by making competitive cash tender offer. How does it work?
Generally, Opendoor’s process consists of three necessary steps:
- You list your home to Opendoor by filling special form on the website.
- Get an offer with the latest market data.
- Sign a treaty, choose a preferable move day and receive your money in cash.
Opendoor gives its clients an access to hundreds and thousands of real estate listings. Many of them haven’t yet approached the market. But just because Opendoor promises you to ease all operations with real estate, does it mean that employing their services is the perfect option in your personal situation? And even if it is, how much cash will you receive? We’ll cover this question in details below. For the beginning, let’s make a general survey on Operndoor’s working processes.
The Opendoor Methods of Work.
To ask for an offer on your real estate, you’ll have to enter the address of your home on the service’s home page. Then you’ll fill the special form and it will take you about 3 minutes. Then, the service will use its “proprietary technology” (mainly, it finds out what similar homes in your location were sold for) to give you an offer.
Opendoor Real Estate Offer.
Here’s an approximate example of what you may get if Opendoor finally makes a commercial offer on you estate.
Taking Your Offer.
If you are ready to take Opendoor’s offer, they will specify a date of a free home examination to find out the condition of its exterior, roof, structure, sanitary fitments, electrics, insulation, ventilation and heating installation.
If your home needs some upgrades (the majority of clients have to pay less than 1500$ for maintenance, ¼ don’t need any changes at all), you’ll have to finish them independently or pay some money to Opendoor for repair works. Even on this stage, you can still cancel a contract without paying any fees and forfeit penalties.
Continuing Your Own Life.
After finishing detailed inspection, you are to choose your suitable move-out day (not later than 60 days) and Opendoor will take the lead. You are to have a final walk through before closing your home to make sure that it is still in the condition you left it and that you stripped all your belongings.
Meanwhile, Opendoor will create an escrow account backed by a title company and you’ll have to sign all closing binders (it the necessity appears, a mobile notary officer can meet you anywhere you want). Then, on the day of the deal closing, an escrow agent will pass you the final sum of money. And there is it!
Will Opendoor work with any real estate, though?
The service’s Requirements to Offered Property.
Opendoor doesn’t make business on real estate flipping, who works with any kind of home in all imaginable conditions in case they get ¼ of money from a successful deal. On the contrary, they have very specific requirements to property you want to sell. According to Opendoor’s company site they include as follows:
- Real estate should be owned only by one family, fractional ownership is not permitted (condominiums and town-houses receiving conventional financing are possible)
- Home should be site built (pre-engineered and movable homes are impossible)
- Homes should be located in Phoenix (Arizona) or Dallas (Texas).
- The seller should have clear ownership rights (double deposition is not allowed)
- Homes should be built after 1960s
- Homes are evaluated at the sum from 125000$ to 500000$
- The square around the real estate should be less than 0,5 acres.
- If the home is not occupied while working with Opendoor, it should be leased to other people
- Homes should not be distressed and owned by a bank or government loan insurer
- Homes shouldn’t have unpermitted architectural replannings or other foundation problems.
- Homes shouldn’t have solar panels
- Homes shouldn’t have polybutyl sanitary equipment
- Homes shouldn’t have wiring made of alumimium
- Homes shouldn’t have roofs made of masonite or woodroof
What If You Want To Buy A Home With Opendoor?
If you want to purchase real estate instead of selling it (or maybe use both options at the same time), Opendoor can help you. They provide services in three metropolises: Phoenix, Dallas and even Las Vegas.
Comparing their business methods to traditional, Opendoor’s site claims that the company provides an opportunity to see any home from the available list at any day from 6 a.m. to 9 p.m. without a preliminary arrangement. Free application available for smartphones gives you a full access to the Opendoor’s listings. OK, now we’ve considered all basic Opendoor’s features and found out that the service can help you to sell or buy a home in a very brief period of time. But are you ready to pay for such convenience?
How Much Opendoor’s Buying Services Cost?
Asking for an offer from the company is absolutely free. You can cancel a contract at any moment without paying the forfeit until your real estate is inspected and the decision to continue cooperation is made. After signing a final contract Opendoor doesn’t give any significant discounts or attractive offers to save some money. For instance, Opendoor’s pricing comparison table says that you’ll pay just 2-6% less due to absence of agent commissions and seller bonuses.
But Opendoor demands extra payment that include a “market risk” payment in an amount of 2%. It’s not comprehensive if this offer is competitive (we’ll tell you more about that in next paragraphs). By a modest computation we can deduce that working with Opendoor you’ll end up paying at least 1% more than using traditional model of selling real estate.
How Much Cash May You Get If You Want To Sell Your Home?
Opendoor uses their own proprietary technology of evaluation homes and we don’t know nothing about the system for certainty. Opendoor says it was developed by professional and experienced statisticians and real estate agents and uses advertisements in your location. Apart from this, Opendoor’s company website says their services are very transparent, relevant to the current market and based on accurate correlation between location, unique peculiarities and other important characteristics.
What does it mean for a customer in simple words? We’ll make a definitive conclusion later, but now let’s look at Opendoor’s feedback by usual customers.
Is It Reasonable To Use Opendoor For Selling Your Real Estate?
The “reasonable” concept is very subjective, and an Opendoor’s feature may become a serious advantage for one person, and a terrible drawback for others. So we offer you a couple of facts for consideration:
Opendoor: Easy But Expensive.
We have no doubt that Opendoor eases the process of selling your real estate. But for the convenience you’ll have to overpay. How much will it cost exactly?
It depends on many variable factors, but we believe that overpaying is between 2 and 4.5% comparing to traditional realtor agencies. At first sight it doesn’t seem too much, but if the case is 250000$ home, the sum will be between 5000 and 11250$ that can’t be returned after the deal is closed. According to customers’ reviews on Yelp that we already referred to above, Opendoor often makes an offer that is lower than comparative market costs. The difference may be in tens of thousands of dollar.
The Company’s Limited Market.
While we were making research for this article, Opendoor worked only on Phoenix, Las Vegas and Dallas markets. So if you don’t live in these cities, Opendoors is not for you at all.
Taking in account all circumstances and features of selling real estate with Opendoor, we realized that there are two radically different types of customers that should choose Opendoor:
- whose who have a lot of ownership share in his or her home and a lot of money for a rapid sell;
- those who fell upon hard times and need a significant sum of money as quickly as it’s possible in the particular situation.
But if you don’t belong to any of these categories (for example, you have a little and not enough of ownership share or you don’t need to sell a home quickly), the traditional selling methods are definitely more suitable for you. As for buying, Opendoor’s unique system of visiting the listings at any convenient time from 6 a.m. to 9 p.m. without any arrangements eases the buying procedure especially for extremely busy customers.