There is a new real estate venture coming to town called Opendoor. Much like Zillow's Instant Offer and OfferPad this service promotes the ease of moving. This service is a bit like the others out there. The potential seller enters the home information on the site and within 24 hours the seller will get a cash offer on the property. The benefits of using Opendoor is the the seller does not have to list their home and get it ready to sell, there will not be potential buyers come through the home, and the seller can choose a closing date between 14 and 60 days.
When the offer is provided, Opendoor will come back with the cash offer and a list of their fees. In David's test of Opendoor, the offer that was given did come in a market value, unlike the offer David was given by Offerpad. The list of fees will show right away why Opendoor does not claim to save the seller money. One of the fees listed on the offer is the customer experience and risk fee. This is a fee that can range from 6%-8% of the purchase price. Another fee they give is 2% seller concession which they say is about average on a typical real estate transaction. To compare, the typical commission the seller pays to the real estate agents is 6% and an agent knowledgable on the market can negotiate the seller concession.
Opendoor states by using their service there will not be a mortgage overlap when selling and then buying a property. This means that if the seller cannot sell their home and they buy another they will have 2 mortgages. Often times people get nervous about the chance they will either have to pay 2 mortgages or they could be homeless if their home sells quickly and they cannot find another one. By working with an experienced real estate agent the seller can avoid these situations.
Opendoor only provides one offer. An experience real estate agent can provide the proper exposure for the property and create urgency for the chance of receiving multiple offers on the property. The seller then has the leverage to choose the offer that will be the best option for them.
While Opendoor, Offerpad and Zillow's Instant offer all sound hassle free in the commercials, they do have their downsides. A seller looking for a convenient way to sell their property that is quick and easy this may be the way to go. However, by going the "quick and easy" route and not choosing to use an experienced real estate agent the seller will most likely not net the money they could have if used a real estate agent to sell their home.
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