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to use my market, where Opendoor has been a pretty good while (2nd Q 18) ...
10% haven't had an agent. These Buyers paid 97% of list, so much of OD's savings went away. Further, these homes sat 2 weeks longer, so they essentially had to wait Buyers out.
61% of their homes have sold within (their expected?) 30 days and at an average 99.5% of list. But since so many involved buyer's agents, there went ~2.5% of their profit margin.
39% have taken over 30 days, and they sold for 95% of list price, and the BA fee, and the carrying costs.
they are advertising an average fee locally of 7%.
so 7% - [(61% x 3% discount) + (39% x 7.5% discount)] (I think I'm doing this right, hey it's Monday)
7% - 4.8% = 2.2%, average of 41 DOM/70 day close = 5.1 turns x 2.2% = 11.3% - and that considers $0 cost to prep and carry the house.
I am probably missing something and as you or someone said - as the SELLER all I cared about was that I got a good price with less hassle.
But, what I don't see is how much your equations account for whatever markup on the resale list price vs paid price. Granted, they pitch that they are only after the "fee", but in my case there was some amount of "profit" in the resale list price.
Also - a side note - whoever was figuring the holding costs for my place with 5% property tax - thankfully in AZ most counties have a property tax of just over 1%.....
I am probably missing something and as you or someone said - as the SELLER all I cared about was that I got a good price with less hassle.
But, what I don't see is how much your equations account for whatever markup on the resale list price vs paid price. Granted, they pitch that they are only after the "fee", but in my case there was some amount of "profit" in the resale list price.
Also - a side note - whoever was figuring the holding costs for my place with 5% property tax - thankfully in AZ most counties have a property tax of just over 1%.....
Indeed, to a Seller today the only thing that matters is their personal net proceeds ... of course, that's all that should ever matter.
The point that I and others are making - "long term" it does not appear they can make the kind of money necessary to satisfy their funding resources.
To account for the difference between their REAL purchase price (net after fee) and their sales price (before any compensation) would require - in my case above - looking at all 1,500 homes they've sold an estimating their net purchase (because when they "pay" $200K but charge 10%, it shows at 200K, not at 180).
One of my greatest concerns when showing OpenDoor properties is the unrestricted access they allow to anyone with a phone.
I'm always alert to surprises, and always concerned about being blamed for something someone else does.
One question when it comes to SELLING my current property to OpenDoor, can you back out AFTER signing the Offer to Purchase with them?
What are steps, actions, consequences?
In a word, yes. At least you could last summer, and I know that OfferPad, at least, didn't offer such a guarantee or easy withdrawal (not sure about the other ones like Knock or Zillow).
In my feedback to OD, I mentioned that was why we decided to proceed with them instead of OP.
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