what is your experience of using Opendoor for buying or selling your home?

Questions on how we spend our money and our time - consumer goods and services, home and vehicle, leisure and recreational activities
Post Reply
Topic Author
sabhen
Posts: 347
Joined: Sat Feb 27, 2016 1:03 am

what is your experience of using Opendoor for buying or selling your home?

Post by sabhen »

I like to ask members of thsi forum to share their experience with buying or selling their home via companies such as opendoor.

It seems painless on the surface, you get an estimate online and then a walk-through video via zoom for a firm estimate.

Is it really that simple? are there any pitfalls or issues that I am not aware of compared with the traditional route of working via a regular RE agent?
User avatar
rocket354
Posts: 518
Joined: Mon Dec 14, 2015 12:31 pm

Re: what is your experience of using Opendoor for buying or selling your home?

Post by rocket354 »

Hi, I recently sold one house, and am under contract to sell another. I got offers from Offerpad, Opendoor, and RedfinNow. I went with RedfinNow for both sales, but I can summarize my experiences with all three in case that helps at all.

For house #1, RedfinNow had by far the highest initial offer, so I did not followup with Opendoor or Offerpad and went with them. It just closed last week and everything went pretty smoothly. I think I got a higher price than the market would have given me.

For house #2 (the one still under contract) I got offers from all three. Opendoor was the highest, but RedfinNow was close, so I went went to the inspection with both.

For Opendoor, I just had to walk around the inside and outside of the house for 10-15 mins taking videos and upload them on their portal. Then, the next day, they had someone come out to do an exterior "evaluation" which only lasted about 20 mins. After that they gave an updated offer which was slightly higher, but also now included their repair costs which was almost exactly the same amount as the increase. So the net offer stayed the same, despite having some requested repairs. Time from inspection to updated final offer was about 24 hrs.

For RedfinNow, they did a full inspection (which they paid for) which also included a complete 3D imaging of the property. All of this took 3+ hours, so was a bit of a pain, but they paid for it, and there was no obligation if were to back out.

Opendoor would not budge at all on their offer. RedfinNow negotiated some with house #1, and then with house #2 I mentioned to them that Opendoor had a higher offer and they came back within hours with a offer that was slightly higher in the nominal sales price, with a slightly lower repair cost, and they offered to cover all closing costs, netting me an extra 1.5% in my pocket over Opendoor's offer. (Technically, *should* net me after we close.)

Also, RedfinNow's contract goes binding after an inspection period (10 days) while Opendoor has a flat $1250 earnest money deposit for their liability. So while you can back out at any time, they can also back out at any time and only owe you the $1250. For me, that was too stressful since I'd be leaving my home off the market and not fixing it up to get ready to either sell or rent, so my damages would be much higher if they backed out late in the game. So even if all else was just even, I would have taken RedfinNow just because they couldn't back out on a whim.

That said, Opendoor was professional the entire time, and kept to their word and I would have had no problem signing with them if they'd had the higher offer.

For what it's worth, Offerpad was the lowest offer each time, and, while polite, seemed to have the highest pressure sales techniques. They tried to convince me that their lower offer before they even decided repair costs was actually better than the other offers which were still higher after repair costs. They also, from what I've read, charge you if you back out after the inspection period (which I did not do with them). Overall, I felt that I would not want to deal with them in general.

Hopefully this helps some.
Sam_957
Posts: 130
Joined: Tue Oct 27, 2020 7:04 pm
Location: Sonoran Desert Biome

Re: what is your experience of using Opendoor for buying or selling your home?

Post by Sam_957 »

I bought from them but later looked into selling. The fees end up being high and you may not get a competitive price. They are hoping you’ll trade a few 10k for convenience and less worry. They will sell the house within a few months and profit from the actual market price.
User avatar
orcycle
Posts: 212
Joined: Mon Jul 11, 2011 9:44 am

Re: what is your experience of using Opendoor for buying or selling your home?

Post by orcycle »

I sold a rental property to Opendoor in 2019. They were upfront about everything, no last-minute surprises, it all went very smoothly. Their fees are high but their original offer seemed to be above-market at the time, so I am pretty happy with the outcome.

I used to update their offers on another rental property but recently their website said they couldn’t make an offer (after several declines in offer prices), but I would probably go with a traditional realtor this time.
bob60014
Posts: 2444
Joined: Mon Jul 31, 2017 8:59 pm
Location: The Land Beyond ORD

Re: what is your experience of using Opendoor for buying or selling your home?

Post by bob60014 »

If you need to ask the question, they might not be for you.
London
Posts: 408
Joined: Sun Dec 11, 2016 11:50 am

Re: what is your experience of using Opendoor for buying or selling your home?

Post by London »

rocket354 wrote: Thu Jun 16, 2022 5:14 pm Hi, I recently sold one house, and am under contract to sell another. I got offers from Offerpad, Opendoor, and RedfinNow. I went with RedfinNow for both sales, but I can summarize my experiences with all three in case that helps at all.

For house #1, RedfinNow had by far the highest initial offer, so I did not followup with Opendoor or Offerpad and went with them. It just closed last week and everything went pretty smoothly. I think I got a higher price than the market would have given me.

For house #2 (the one still under contract) I got offers from all three. Opendoor was the highest, but RedfinNow was close, so I went went to the inspection with both.

For Opendoor, I just had to walk around the inside and outside of the house for 10-15 mins taking videos and upload them on their portal. Then, the next day, they had someone come out to do an exterior "evaluation" which only lasted about 20 mins. After that they gave an updated offer which was slightly higher, but also now included their repair costs which was almost exactly the same amount as the increase. So the net offer stayed the same, despite having some requested repairs. Time from inspection to updated final offer was about 24 hrs.

For RedfinNow, they did a full inspection (which they paid for) which also included a complete 3D imaging of the property. All of this took 3+ hours, so was a bit of a pain, but they paid for it, and there was no obligation if were to back out.

Opendoor would not budge at all on their offer. RedfinNow negotiated some with house #1, and then with house #2 I mentioned to them that Opendoor had a higher offer and they came back within hours with a offer that was slightly higher in the nominal sales price, with a slightly lower repair cost, and they offered to cover all closing costs, netting me an extra 1.5% in my pocket over Opendoor's offer. (Technically, *should* net me after we close.)

Also, RedfinNow's contract goes binding after an inspection period (10 days) while Opendoor has a flat $1250 earnest money deposit for their liability. So while you can back out at any time, they can also back out at any time and only owe you the $1250. For me, that was too stressful since I'd be leaving my home off the market and not fixing it up to get ready to either sell or rent, so my damages would be much higher if they backed out late in the game. So even if all else was just even, I would have taken RedfinNow just because they couldn't back out on a whim.

That said, Opendoor was professional the entire time, and kept to their word and I would have had no problem signing with them if they'd had the higher offer.

For what it's worth, Offerpad was the lowest offer each time, and, while polite, seemed to have the highest pressure sales techniques. They tried to convince me that their lower offer before they even decided repair costs was actually better than the other offers which were still higher after repair costs. They also, from what I've read, charge you if you back out after the inspection period (which I did not do with them). Overall, I felt that I would not want to deal with them in general.

Hopefully this helps some.
Posts like this are why I come to this board. Great informative reply. And this isn’t even a topic I particularly care about.
Topic Author
sabhen
Posts: 347
Joined: Sat Feb 27, 2016 1:03 am

Re: what is your experience of using Opendoor for buying or selling your home?

Post by sabhen »

Invaluable infos. Thanks a lot.
MGBMartin
Posts: 234
Joined: Thu Nov 04, 2021 11:09 am

Re: what is your experience of using Opendoor for buying or selling your home?

Post by MGBMartin »

London wrote: Thu Jun 16, 2022 7:51 pm
rocket354 wrote: Thu Jun 16, 2022 5:14 pm Hi, I recently sold one house, and am under contract to sell another. I got offers from Offerpad, Opendoor, and RedfinNow. I went with RedfinNow for both sales, but I can summarize my experiences with all three in case that helps at all.

For house #1, RedfinNow had by far the highest initial offer, so I did not followup with Opendoor or Offerpad and went with them. It just closed last week and everything went pretty smoothly. I think I got a higher price than the market would have given me.

For house #2 (the one still under contract) I got offers from all three. Opendoor was the highest, but RedfinNow was close, so I went went to the inspection with both.

For Opendoor, I just had to walk around the inside and outside of the house for 10-15 mins taking videos and upload them on their portal. Then, the next day, they had someone come out to do an exterior "evaluation" which only lasted about 20 mins. After that they gave an updated offer which was slightly higher, but also now included their repair costs which was almost exactly the same amount as the increase. So the net offer stayed the same, despite having some requested repairs. Time from inspection to updated final offer was about 24 hrs.

For RedfinNow, they did a full inspection (which they paid for) which also included a complete 3D imaging of the property. All of this took 3+ hours, so was a bit of a pain, but they paid for it, and there was no obligation if were to back out.

Opendoor would not budge at all on their offer. RedfinNow negotiated some with house #1, and then with house #2 I mentioned to them that Opendoor had a higher offer and they came back within hours with a offer that was slightly higher in the nominal sales price, with a slightly lower repair cost, and they offered to cover all closing costs, netting me an extra 1.5% in my pocket over Opendoor's offer. (Technically, *should* net me after we close.)

Also, RedfinNow's contract goes binding after an inspection period (10 days) while Opendoor has a flat $1250 earnest money deposit for their liability. So while you can back out at any time, they can also back out at any time and only owe you the $1250. For me, that was too stressful since I'd be leaving my home off the market and not fixing it up to get ready to either sell or rent, so my damages would be much higher if they backed out late in the game. So even if all else was just even, I would have taken RedfinNow just because they couldn't back out on a whim.

That said, Opendoor was professional the entire time, and kept to their word and I would have had no problem signing with them if they'd had the higher offer.

For what it's worth, Offerpad was the lowest offer each time, and, while polite, seemed to have the highest pressure sales techniques. They tried to convince me that their lower offer before they even decided repair costs was actually better than the other offers which were still higher after repair costs. They also, from what I've read, charge you if you back out after the inspection period (which I did not do with them). Overall, I felt that I would not want to deal with them in general.

Hopefully this helps some.
Posts like this are why I come to this board. Great informative reply. And this isn’t even a topic I particularly care about.
Me too.
That really was a great post, very informative.
Thanks for sharing your experience
Bad spellers of the world untie | Autocorrect is my worst enema
Auream
Posts: 537
Joined: Thu Mar 20, 2008 1:07 pm
Location: Raleigh, NC

Re: what is your experience of using Opendoor for buying or selling your home?

Post by Auream »

It’s possible that this won’t be happening anymore now that the market is cooling in many areas, but almost everyone around me who sold to OpenDoor or Redfin was kicking themselves when they saw how much higher the company flipped the house for. Worst example is a house I looked at back in March. Was sold to Redfin around February 1st for $600k. Appeared to have new carpet installed by RedFin but nothing else. Closed mid-April for $775k. Original seller made a $175k blunder selling to RedFin.
Tavistock1
Posts: 153
Joined: Thu Feb 06, 2020 11:57 am

Re: what is your experience of using Opendoor for buying or selling your home?

Post by Tavistock1 »

While I agree that these companies can sometimes be beneficial to consumers, having been an active realtor for decades I can see that there’s a reason why the industry of “full time brokers” exists. The seller is paying, like P&G and frito lay pay for shelf space in the supermarket, for “top shelf” exposure to gain the widest buying audience. We can argue about commissions ( negotiable) but I will say that when one of my kids sells a home, it’ll be with an experienced, successful Realtor.
UNCHEEL
Posts: 32
Joined: Fri Dec 18, 2015 9:36 am

Re: what is your experience of using Opendoor for buying or selling your home?

Post by UNCHEEL »

I love the commercials that hype how you can get a cash offer and sell you house to them "stress-free."
Personally, I'm in the camp that leaving $100k on the table is stressful.
AlphaLess
Posts: 3305
Joined: Fri Sep 29, 2017 11:38 pm
Location: Kentucky

Re: what is your experience of using Opendoor for buying or selling your home?

Post by AlphaLess »

London wrote: Thu Jun 16, 2022 7:51 pm
rocket354 wrote: Thu Jun 16, 2022 5:14 pm Hi, I recently sold one house, and am under contract to sell another. I got offers from Offerpad, Opendoor, and RedfinNow. I went with RedfinNow for both sales, but I can summarize my experiences with all three in case that helps at all.

For house #1, RedfinNow had by far the highest initial offer, so I did not followup with Opendoor or Offerpad and went with them. It just closed last week and everything went pretty smoothly. I think I got a higher price than the market would have given me.

For house #2 (the one still under contract) I got offers from all three. Opendoor was the highest, but RedfinNow was close, so I went went to the inspection with both.

For Opendoor, I just had to walk around the inside and outside of the house for 10-15 mins taking videos and upload them on their portal. Then, the next day, they had someone come out to do an exterior "evaluation" which only lasted about 20 mins. After that they gave an updated offer which was slightly higher, but also now included their repair costs which was almost exactly the same amount as the increase. So the net offer stayed the same, despite having some requested repairs. Time from inspection to updated final offer was about 24 hrs.

For RedfinNow, they did a full inspection (which they paid for) which also included a complete 3D imaging of the property. All of this took 3+ hours, so was a bit of a pain, but they paid for it, and there was no obligation if were to back out.

Opendoor would not budge at all on their offer. RedfinNow negotiated some with house #1, and then with house #2 I mentioned to them that Opendoor had a higher offer and they came back within hours with a offer that was slightly higher in the nominal sales price, with a slightly lower repair cost, and they offered to cover all closing costs, netting me an extra 1.5% in my pocket over Opendoor's offer. (Technically, *should* net me after we close.)

Also, RedfinNow's contract goes binding after an inspection period (10 days) while Opendoor has a flat $1250 earnest money deposit for their liability. So while you can back out at any time, they can also back out at any time and only owe you the $1250. For me, that was too stressful since I'd be leaving my home off the market and not fixing it up to get ready to either sell or rent, so my damages would be much higher if they backed out late in the game. So even if all else was just even, I would have taken RedfinNow just because they couldn't back out on a whim.

That said, Opendoor was professional the entire time, and kept to their word and I would have had no problem signing with them if they'd had the higher offer.

For what it's worth, Offerpad was the lowest offer each time, and, while polite, seemed to have the highest pressure sales techniques. They tried to convince me that their lower offer before they even decided repair costs was actually better than the other offers which were still higher after repair costs. They also, from what I've read, charge you if you back out after the inspection period (which I did not do with them). Overall, I felt that I would not want to deal with them in general.

Hopefully this helps some.
Posts like this are why I come to this board. Great informative reply. And this isn’t even a topic I particularly care about.
+100!
I don't carry a signature because people are easily offended.
AlphaLess
Posts: 3305
Joined: Fri Sep 29, 2017 11:38 pm
Location: Kentucky

Re: what is your experience of using Opendoor for buying or selling your home?

Post by AlphaLess »

Auream wrote: Fri Jun 17, 2022 7:07 am It’s possible that this won’t be happening anymore now that the market is cooling in many areas, but almost everyone around me who sold to OpenDoor or Redfin was kicking themselves when they saw how much higher the company flipped the house for. Worst example is a house I looked at back in March. Was sold to Redfin around February 1st for $600k. Appeared to have new carpet installed by RedFin but nothing else. Closed mid-April for $775k. Original seller made a $175k blunder selling to RedFin.
This is accurate.

Think of it this way. There are only two cases:
A. True home value is HIGHER than iBuyer offer,
B. True home value is LOWER than iBuyer offer.

Let's analyze each case separately.

Firstly case B. Since iBuyers use machine learning and historical simulation to come up with their "offer price", they try to minimize case B. Why? Because they don't want to overpay.

Presumably, the true home value is "V", and iBuyer offer is "O". If iBuyer private valuation is "P", then:
- iBuyer ensures that P ~ V,
- O is lower than P (but not by much).

They also ensure that near-term future price is HIGHER. Thus, they can sell it for more. This requires for them to have a home price index future valuation (where price index refers to the city-wide, or metro-wide price index).

Zillow was consistently overpaying, and also had a bug in their valuation model. They would take their own i-purchases (which were based on high offers), and they would use that as a basis of the home price index, which would further push the prices up.

The key to avoid buyer's (and seller's) remorse is to trade as close to true value as possible.

Of course, the iBuyer private valuation is known to them. So, the seller has to have a good private valuation too.
I don't carry a signature because people are easily offended.
AlphaLess
Posts: 3305
Joined: Fri Sep 29, 2017 11:38 pm
Location: Kentucky

Re: what is your experience of using Opendoor for buying or selling your home?

Post by AlphaLess »

UNCHEEL wrote: Mon Jun 20, 2022 7:30 pm I love the commercials that hype how you can get a cash offer and sell you house to them "stress-free."
Personally, I'm in the camp that leaving $100k on the table is stressful.
$100K over what price? $100K over a $2M is not a alot.

$100K over a $500K -> that is a lot.
I don't carry a signature because people are easily offended.
AlphaLess
Posts: 3305
Joined: Fri Sep 29, 2017 11:38 pm
Location: Kentucky

Re: what is your experience of using Opendoor for buying or selling your home?

Post by AlphaLess »

Also, the more astute and curious readers are encourage to browse through and read this.

This is a public document (Investor Presentation for 2022 Q1).

https://investor.opendoor.com/static-fi ... 2c0055fe6c

Ton of useful info.
I don't carry a signature because people are easily offended.
Auream
Posts: 537
Joined: Thu Mar 20, 2008 1:07 pm
Location: Raleigh, NC

Re: what is your experience of using Opendoor for buying or selling your home?

Post by Auream »

AlphaLess wrote: Mon Jun 20, 2022 8:00 pm
UNCHEEL wrote: Mon Jun 20, 2022 7:30 pm I love the commercials that hype how you can get a cash offer and sell you house to them "stress-free."
Personally, I'm in the camp that leaving $100k on the table is stressful.
$100K over what price? $100K over a $2M is not a alot.

$100K over a $500K -> that is a lot.
Opendoor doesn't do a lot of business above $1M. They're mostly in the "meat" of the market, the middle 50% of houses, particularly easy-to-value houses built by tract builders in the past 30 or so years, which in all but the most expensive markets in the country is well under $1M. In my area, it's probably about $400-700K.

I don't know if $100K is an average profit for them in this market, but it wouldn't surprise me. I mentioned previously a house I looked at (this is probably on the high end of Redfin profit margins). Sold to Redfin for $600K (minus fees that are usually ~5%), listed by RedFin at $689K, sold for $775K.
Glenn
Posts: 161
Joined: Mon Feb 19, 2007 6:06 pm

Re: what is your experience of using Opendoor for buying or selling your home?

Post by Glenn »

Neighbors sold their house last June to OpenDoor for $465k. That was on a Thursday. On Saturday, OpenDoor sold it for $525k. Two days later, with absolutely nothing done to the house by OpenDoor.

Oops.
User avatar
tooluser
Posts: 1228
Joined: Sat Oct 01, 2011 7:04 pm

Re: what is your experience of using Opendoor for buying or selling your home?

Post by tooluser »

It's important to distinguish getting enough profit versus getting the optimal profit. This is fundamental to the Bogleheads investment philosophy -- as an individual investor, you don't have to swing for the fences, and have not failed if you got enough for your needs.

By itself, the fact that the house was flipped later for more money does not indicate an incorrect investment decision unless you are selling real estate as a business. There are other considerations such as ease of transaction/simplicity, and intangible preferences such as whether you like the agent (whether a person or a corporation), or how much of a hurry you are in. Not everyone can sit like an owl on a telephone pole for an indefinite amount of time and scoop up the most careless varmints.

I hope to sell my house soon and will probably not ping any of the online services. But that could change after I talk to a few local real estate agents, if I don't care for any of them.
Like good comrades to the utmost of their strength, we shall go on to the end. -- Winston Churchill
Trism
Posts: 911
Joined: Mon Jul 18, 2016 6:34 pm

Re: what is your experience of using Opendoor for buying or selling your home?

Post by Trism »

London wrote: Thu Jun 16, 2022 7:51 pm
rocket354 wrote: Thu Jun 16, 2022 5:14 pm Hi, I recently sold one house, and am under contract to sell another. I got offers from Offerpad, Opendoor, and RedfinNow. I went with RedfinNow for both sales, but I can summarize my experiences with all three in case that helps at all.

For house #1, RedfinNow had by far the highest initial offer, so I did not followup with Opendoor or Offerpad and went with them. It just closed last week and everything went pretty smoothly. I think I got a higher price than the market would have given me.

For house #2 (the one still under contract) I got offers from all three. Opendoor was the highest, but RedfinNow was close, so I went went to the inspection with both.

For Opendoor, I just had to walk around the inside and outside of the house for 10-15 mins taking videos and upload them on their portal. Then, the next day, they had someone come out to do an exterior "evaluation" which only lasted about 20 mins. After that they gave an updated offer which was slightly higher, but also now included their repair costs which was almost exactly the same amount as the increase. So the net offer stayed the same, despite having some requested repairs. Time from inspection to updated final offer was about 24 hrs.

For RedfinNow, they did a full inspection (which they paid for) which also included a complete 3D imaging of the property. All of this took 3+ hours, so was a bit of a pain, but they paid for it, and there was no obligation if were to back out.

Opendoor would not budge at all on their offer. RedfinNow negotiated some with house #1, and then with house #2 I mentioned to them that Opendoor had a higher offer and they came back within hours with a offer that was slightly higher in the nominal sales price, with a slightly lower repair cost, and they offered to cover all closing costs, netting me an extra 1.5% in my pocket over Opendoor's offer. (Technically, *should* net me after we close.)

Also, RedfinNow's contract goes binding after an inspection period (10 days) while Opendoor has a flat $1250 earnest money deposit for their liability. So while you can back out at any time, they can also back out at any time and only owe you the $1250. For me, that was too stressful since I'd be leaving my home off the market and not fixing it up to get ready to either sell or rent, so my damages would be much higher if they backed out late in the game. So even if all else was just even, I would have taken RedfinNow just because they couldn't back out on a whim.

That said, Opendoor was professional the entire time, and kept to their word and I would have had no problem signing with them if they'd had the higher offer.

For what it's worth, Offerpad was the lowest offer each time, and, while polite, seemed to have the highest pressure sales techniques. They tried to convince me that their lower offer before they even decided repair costs was actually better than the other offers which were still higher after repair costs. They also, from what I've read, charge you if you back out after the inspection period (which I did not do with them). Overall, I felt that I would not want to deal with them in general.

Hopefully this helps some.
Posts like this are why I come to this board. Great informative reply. And this isn’t even a topic I particularly care about.
Agreed. I wish there was a "like" or a "thank you" button to acknowledge useful posts like this.

It's impossible to know if anything posted here is helping anyone else, unless someone takes the time to reply.
User avatar
JAZZISCOOL
Posts: 2155
Joined: Sat May 18, 2019 11:49 am
Location: Colorado - 5,700 ft.

Re: what is your experience of using Opendoor for buying or selling your home?

Post by JAZZISCOOL »

AlphaLess wrote: Mon Jun 20, 2022 8:57 pm Also, the more astute and curious readers are encourage to browse through and read this.

This is a public document (Investor Presentation for 2022 Q1).

https://investor.opendoor.com/static-fi ... 2c0055fe6c

Ton of useful info.
Thanks. Very interesting. I agree the RE (residential) market has been ripe for disruption for a long time. It will be interesting to see how things evolve (e.g. with RE lobbyists, etc.).
lgs88
Posts: 563
Joined: Tue Jun 07, 2016 7:48 am

Re: what is your experience of using Opendoor for buying or selling your home?

Post by lgs88 »

JAZZISCOOL wrote: Mon Jul 04, 2022 12:55 pm Thanks. Very interesting. I agree the RE (residential) market has been ripe for disruption for a long time. It will be interesting to see how things evolve (e.g. with RE lobbyists, etc.).
My hope is that these services will do to real estate transaction costs what Vanguard did to mutual fund expense ratios and commissions.

The purchase or sale of a home is obviously a more complex transaction than the purchase of a share of Google (cf. low-cost brokerages) or some trinket (cf. Amazon). However, the status quo in real estate is coughing up 6% of sale price and STILL having a painful and stressful experience. Surely we can do better.

Disruption in the RE business model can't come soon enough.

Traditional realtor advertising sounds a lot like high-fee mutual fund advertising -- sure, we cost more, but you won't beat the market unless you hire us.
merely an interested amateur
User avatar
JAZZISCOOL
Posts: 2155
Joined: Sat May 18, 2019 11:49 am
Location: Colorado - 5,700 ft.

Re: what is your experience of using Opendoor for buying or selling your home?

Post by JAZZISCOOL »

lgs88 wrote: Mon Jul 04, 2022 1:02 pm
JAZZISCOOL wrote: Mon Jul 04, 2022 12:55 pm Thanks. Very interesting. I agree the RE (residential) market has been ripe for disruption for a long time. It will be interesting to see how things evolve (e.g. with RE lobbyists, etc.).
My hope is that these services will do to real estate transaction costs what Vanguard did to mutual fund expense ratios and commissions.

The purchase or sale of a home is obviously a more complex transaction than the purchase of a share of Google (cf. low-cost brokerages) or some trinket (cf. Amazon). However, the status quo in real estate is coughing up 6% of sale price and STILL having a painful and stressful experience. Surely we can do better.

Disruption in the RE business model can't come soon enough.

Traditional realtor advertising sounds a lot like high-fee mutual fund advertising -- sure, we cost more, but you won't beat the market unless you hire us.
All excellent points. Around here you could probably pay 4.8% commission for a "full service" broker but I still think the "value add" of any realtor is something I have questioned. In some markets (e.g. slow, rural), it may make sense to use an agent but the business proposition for companies like OpenDoor still seems very appealing and I expect the market share to grow.

I'm not in the market to sell but like reading about the RE industry and learning about the options when I do decide to sell. I spoke to someone from Zillow a few years ago just to hear their pitch. They exited that part of the business as many here know (at a big loss).

I would be curious to know how other countries work in terms of RE transaction costs and if digital models are also moving in (I would imagine so just like AirBNB etc. have evolved globally).
Post Reply