How Does Opendoor & Offerpad Work?
How Do Opendoor & Offerpad Work?
Opendoor and Offerpad are the leading iBuyers in the market. They both advertise a smooth selling process without the hassle that working with a real estate agent can bring. These two companies are known for offering a fair sale price that is based on the market. Those that are interested in buying a home can also find homes for sale through both Opendoor and Offerpad.
But, how does working with an iBuyer work exactly? This article will tell you everything you need to know, whether you’re interested in selling your home or buying another one.
Opendoor Or Offerpad?
When selling a home through either iBuyer, homeowners will go through a similar process. However, there are a few key differences that homeowners will need to keep in mind when deciding which iBuyer to work with.
Determine Which iBuyer Services Your Area
There are a few markets that have both Opendoor and Offerpad. However, Offerpad is available in fewer markets than Opendoor, so it’s important that those considering selling their home determine which iBuyer they can work with.
Examine The Criteria For Selling Your Home
Both iBuyers have specific criteria that they look for in a home before purchasing it. For example, they will only buy homes that were made after a certain year. Neither
iBuyer will purchase a home that sits on more than two acres of land. If your home does not meet the criteria, you may have to work with a real estate agent. If it does, you can start the process of working with Offerpad or Opendoor.
Request An Offer
Once homeowners determine which iBuyer they will be working with, it’s time to request an offer. Most people can do this easily and quickly online.
The algorithm will determine an approximate value of the home.
Simply submit the request. Then, sellers will be asked for additional information about their home, such as the layout of the home. After that, they will receive an offer.
It’s important to note that the offer received is going to be different than the final offer. There will be fees and repair costs deducted from the final purchase price.
After receiving the offer, homeowners can either walk away or continue the process. Sellers are required to sign a contract with Offerpad that includes a 1% cancellation fee. However, Opendoor does not charge a cancellation fee, allowing homeowners to cancel the selling process anytime that they would like without having to pay the company.
Keep in mind that Offerpad and Opendoor will only submit an offer for certain houses that meet specific criteria. For example, they do not buy mobile homes or houses that are located in a flood zone. They are also not interested in buying homes if they are not sure that they can sell them. In these situations, iBuyers will not give you an offer on your home.
After you accept the offer, both companies will then want to inspect the house. They will do this either in person or via virtual inspection. If they schedule a virtual inspection, they will send a person to complete an exterior inspection of the property.
After the inspection, you’ll receive a final offer that includes a deduction for repair costs. This is when the two companies tend to differ in how they work.
Opendoor will automatically deduct the repair costs from the final purchase price.
Offerpad will give you this option, but they also give homeowners other options. They will let homeowners fix the repairs themselves if they are a contractor, or hire their own licensed contractor to complete the work. However, sellers only have four days to determine what they would like to do in order to avoid a 1% cancellation fee.
Because neither of these companies is known for negotiating, most people have very little success negotiating with them. However, that doesn’t mean that homeowners can’t try. After receiving the final offer, you can try to negotiate the purchasing price or the price of repairs to bring home more money. Whether or not this will work depends on the situation, though.
Accept The Offer
If you are not making repairs yourself, you can simply accept the offer. Homeowners that are going to complete the repairs themselves for Offerpad will have to have the repairs made, and then submit them to Offerpad. They might have to complete another inspection as well.
Upon accepting the offer, homeowners will sign a contract, and agree on a closing date.
After the closing date has passed, most homeowners will receive a payment within 2-3 business days. It should be directly deposited into their bank account.
“Must Knows” when Selling To Offerpad Or Opendoor
When selling your home to an iBuyer, there are several things that you’ll need to keep in mind before signing a contract.
They Do Not Cover Closing Costs
Homeowners that are not working with an agent to help them sell their home can easily make the mistake of assuming the iBuyer has included closing costs into the contract. While they can help beginners with real estate transactions or navigating the process, they will not always include the deduction of closing costs in the final purchase price. It’s important to keep that in mind.
There Is A Service Fee
Both Opendoor and Offerpad charge a service fee. Customers will find that they pay approximately 1% more in fees than if they were to work with a traditional real estate agent with experience in the real estate industry.
Closing Timelines Differ
Both of these market leaders offer different closing times. Offerpad is known for having a more flexible closing time, and for being able to close on houses in as little as eight days. This makes them a great choice for homeowners that are ready to hurry up and sell.
Opendoor takes slightly longer, with their closing time being two weeks. They typically close within sixty days. While this timeline can be limiting, there are cases when Opendoor will let homeowners have a later closing date if they request it in the beginning. Make sure that the closing date is correct before signing the contract.
Offerpad Cancellation Fee
Although they might not tell you in the beginning, Offerpad does charge a 1% cancellation fee. This will be charged regardless of whether you continue to sell your house through them. Some customers report not being notified of the cancellation fee, which caused a significant problem for them.
Sellers Can Always Request A Free Offer
If you’re not sure what your home is going to sell for, consider asking multiple iBuyer companies for an estimate. These are free, and you have zero obligation to actually sell your home to them. It’s common for homeowners to do this to make sure that they get the best price or to give them more leverage in negotiations.
Buying A Home From An iBuyer
Buying a home from an iBuyer is a relatively simple process. It’s similar to buying a property from a real estate agent. Homeowners that are interested in relocating can trade their house for another one that the iBuyer is selling to save themselves time, too.
Browsing Houses For Sale
Both Opendoor and Offerpad are active participants in the housing market. They have wealth of homes available for purchase. Most of their homes can be viewed on their websites or via their app. If homeowners see a home that they are interested in, they can begin the process of buying a home.
Both of these companies use lockboxes to let potential homebuyers view a house they are interested in at their own convenience. However, buyers that would like a tour of the home can schedule one. This gives buyers the opportunity to get a close-up view of the property that they wouldn’t get via a virtual tour online.
Finding A Lender
Once you have decided to buy a house from an iBuyer, it’s time to find a lender. Both iBuyers offer their own in-house lenders to make the process easier.
Some people prefer to find their own lender. This can be beneficial financially as it lets people get a lower interest rate. However, it can take longer to find an agent that wants to work with an iBuyer. Whether or not you choose this route should depend on your current finances, and how quickly you would like to close.
If you don’t want to work with a lender, the iBuyer of your choice can help you navigate the process of closing costs, etc. Most people that choose to buy a home from an iBuyer with money they get from selling their home choose this route to simplify the process.
Make An Offer
After you decide on a home that you would like to buy, you can make an offer. Those interested in purchasing a home can make an offer online, with the app, or by contacting the company directly.
Things To Remember About Buying A House Opendoor or Offerpad
When buying a house from both Offerpad and Opendoor, there are several things that you need to keep in mind. Making sure that you remember these things will guarantee that you do not wind up with buyer’s remorse.
Always Complete An Inspection
Both of these companies are known for quite a few things. Unfortunately, one of the things that they are known for is doing a shoddy repair job and marking up the price of the house. Sellers have stated that they are charged for repairs, but it appears as though the house simply receives a new paint job. Likewise, buyers are told that certain repairs are completed, which justifies a higher price tag. Then, they realize that they were not completed upon inspection.
Before purchasing a home from an iBuyer, it’s important for buyers to hire a professional to complete an inspection. This will help them spot problems before purchasing the house. In addition to that, buyers will have more negotiation room if they find that repairs will need to be completed.
Always Visit The House In Person
Buying a home online can be extremely convenient. In fact, it’s so convenient that some people have purchased houses without even seeing the house in person. This can lead to buyer’s remorse rather quickly as new homeowners discover that the house needs work or is located in a neighborhood they don’t like. It’s critical for homeowners to visit houses in person before buying them.
If there is a situation that prevents you from visiting a house, consider paying a trusted friend to make the visit for you.
Sales Can Fall Through
Occasionally, a sale can fall through at the last minute. This could be because the company and buyer cannot agree on a price. It could also be because the company has more than one person looking at the house. Remember that they sell their houses quickly, so it’s important to make sure that you’re ready to speed through the process with them.
As modern technology continues to offer everyone more convenience, it is becoming increasingly popular to see iBuyers in the real estate market. Opendoor and Offerpad are the most common iBuyers in the real estate market, so it’s important to know how they work before buying or selling your home online. Browse through the rest of our blogs to learn everything that you need to know about both Offerpad and Opendoor.