Opendoor vs Offerpad
Offerpad vs. Opendoor
Homeowners that want to get their home off of the market fast continue to reach out to iBuyers like Offerpad and Opendoor in lieu of working with more traditional real estate agents. These companies often buy homes as-is and streamline the selling process to make sure that homeowners get the quick sale that they are looking for. However, there are a few key differences between these companies. We’ll go over all of the differences that you need to know to make an informed decision about which iBuyer is right for you.
Both Place An Offer In 24 Hours
When it comes to an iBuyer, they are well known for quick sales, and both of these companies take that seriously. You can expect an offer from either company within one day of submitting an inquiry.
Can You Cancel Anytime With Opendoor?
Opendoor gives clients the option to cancel the sale at any time without having to pay a penalty. For example, if a client carefully considers the sale price and later decides that they do not want to sell their home for the price, they can cancel. The same applies if a homeowner decides that they are not happy with the repair costs.
When working with Offerpad, clients do not have this option. Often, they are still charged a 1% service fee if they choose to cancel.
How About Service Fees?
If you’re paying a service charge, it’s important to consider how much that is going to cost you. Typically, an iBuyer will simply deduct this from the purchase price, which can drastically reduce how much you bring home from the sale. Fortunately, both of these iBuyers charge approximately the same amount.
Both companies will usually charge a 5% service charge. They will charge an additional percentage for repair costs. This is typically in the 2% range, but it does vary depending on the house. If the home needs a lot of repairs, homeowners can expect it to be significantly higher than this.
Closing costs are not usually covered by either of these companies.
Does Offerpad Has A More Flexible Closing Time-frame?
When considering Opendoor vs Offerpad, it’s important to think about how quickly you’d like to leave your house. Homeowners that have already purchased another property from the housing market might want to deal with closing a bit sooner. Likewise, those that want to take their time to deal with closing costs, real estate transactions, and other aspects of both selling and buying a home might need a little more time.
Offerpad can finalize the sale in as little as eight days. They also offer homeowners the opportunity to delay closing, including closing costs, for up to ninety days. Opendoor often takes two weeks, and their maximum time frame is only sixty days.
Offerpad Is Not In All Markets
Although both of these companies are considered market leaders, Offerpad has limited availability. They are primarily available in main cities, such as Pheonix and Dallas. Homeowners that do not live in more popular cities will have better luck working with Opendoor. It’s important to check the availability of both companies in your area before deciding which one to work with. Some homeowners will only have one option.
Offerpad Offers More Flexibility Regarding Repairs
Opendoor has one option for homes that need repairs: they will deduct the cost of repairs from the final purchase price. They conduct assessments themselves and determine the approximate cost of the repairs. Homeowners do not have a say in this.
This is where Offerpad truly outshines Opendoor. The Offerpad solutions give homeowners more choices regarding repairs. Deducting the total cost of repairs from the fair market value is an option. Another option is that homeowners can simply decline the repairs, but Offerpad can then revoke their offer to buy the house.
A third option, and one of the best Offerpad solutions, is to have someone else complete the repairs, or repair it yourself. This can often save homeowners a significant amount of money, and put more money in their pocket. The only catch is that homeowners will only have four days to contact contractors and tell Offerpad the repair estimate.
After the repairs are completed, Offerpad does require that a receipt is presented. They will need to know who the contractor being hired is, and their license number for verification purposes. Then, Offerpad will complete another inspection.
Offerpad takes things one step further to make repairs easier on homeowners, and to prevent delays on the closing date. They do offer several repairs and services for free. They can provide homeowners with handyman services to complete small home repairs that will add aesthetic appeal to the home. Pool cleanup and landscaping are other services that are offered. Homeowners can also receive carpet cleaning and deep home cleaning. This means that homeowners have to do significantly less when they sell their homes. Instead, they can focus more on moving.
Local Move Service
While both companies offer a local moving service to help homeowners relocate in a timely manner, the average cost can be slightly higher with Offerpad. Offerpad assesses how many rooms you are moving, and where you will be moving to. Opendoor often offers a flat rate for moving to help clients.
Is It Difficult To Negotiate Price With Opendoor?
Although Opendoor advertises that they offer a price that is close to the list price, there are plenty of instances in which that price was brought down significantly by repair costs. Homeowners that attempt to negotiate this will find it rather difficult, if not impossible.
While Offerpad is not known for negotiating the final sales price, they do provide more assistance regarding repairs. This little bit of wiggle room can help sellers make more money at the time of closing.
Opendoor Has More Lenient Criteria
Both iBuyers will only buy certain types of homes. Opendoor prefers that homes are lived in by the seller, and were built after 1930. They are rarely interested in homes that are worth less than $100,000 and prefer to only purchase homes with a maximum lot size of two acres. Single-family homes and townhouses are their primary interests. Opendoor will only purchase duplexes and condos in certain markets, and it often depends on the current market conditions. If they don’t know if they will be able to sell the home soon, they won’t be interested in buying it.
Offerpad also has criteria that sellers will need to meet. They will only purchase homes that were built after 1960. The home value should be less than $1 million. However, homes that have a rather low value might not make the cut, either. Offerpad only buys single-familyhomes such as houses, townhouses, and condos. They do not purchase duplexes. All of the homes that they buy have to sit on one acre or less of land.
Offerpad Doesn’t Offer A Definite Price Before Signing A Contract
This is one of the major downfalls of Offerpad. When homeowners receive their initial price from Offerpad, they are asked to sign the legally binding contract. Then, the offer that homeowners receive will go down once the house receives an inspection. Homeowners then have four days to cancel or they are charged a cancellation fee. This does not happen with Opendoor as they allow sellers to cancel anytime without charging them a cancellation fee.
This can cause problems if homeowners want to complete repairs with a trusted contractor they know as they only have four days to seal the deal. If the repairs are not completed according to Offerpad’s standards, and homeowners become frustrated, they don’t have the option of canceling the contract without paying a cancellation fee. Homeowners also don’t get a lot of time to determine whether they are content with the price.
Both Offer Similar House Prices
There are some reviews that state Opendoor offers a higher price and others that state Offerpad does. However, it’s important to note that the price offered by both companies is based on current housing prices and the current market. Both companies use a similar algorithm to determine a fair price to offer homeowners for their property.
Neither Company Has Hidden Fees
Both companies are upfront about their fees, with the exception of the cancellation fee that Offerpad has. Although this will be listed in the fine print of the contract homeowners sign, most clients are not informed about this cancellation fee by an agent or representative of the company until it comes time for them to pay the cancellation fee.
Things To Consider When Choosing Offerpad Or Opendoor
Homeowners will have to carefully consider which iBuyer they would like to work with before contacting them for an offer or signing a contract. These are some of the main things that homeowners need to consider to make sure that they choose the perfect iBuyer for their home.
Before delving into the details of each iBuyer, it’s critical to consider your location. Because Offerpad is only available in certain cities, they might not be willing to purchase your home. Homeowners that find themselves in that situation will have no choice but to work with another iBuyer such as Opendoor. The first thing you need to do is determine which company is purchasing homes in your area.
It’s critical for homeowners to look at the criteria that both iBuyers require homes to meet. Because one iBuyer only buys homes that were built after 1960, a seller that owns a home built in 1940 will only have one option. Carefully consider the criteria that both iBuyers insist homes have to meet to determine whether your home will be eligible to be purchased by both iBuyers or only one. This might instantly tell sellers who they will be working with.
Homeowners that prefer to simplify the process by having their iBuyer deduct the repair costs from the purchase price will be able to do this with either iBuyer. However, anyone that would prefer to personally hire a contractor or complete repairs themselves will need to work with Offerpad. Opendoor does not offer this option.
Opendoor is known for having a quick closing time, but they do not offer a lot of flexibility. Homeowners that would like more time in their house to pack and move or those that want to close sooner than two weeks are encouraged to work with Offerpad. They simply have a more flexible time frame that allows them to close as soon as eight days or as late as ninety days. Offerpad is a little more homeowner friendly when it comes to the sale price.
How does Offerpad make money?
Offerpad makes money by purchasing and then selling homes. They also own renovation business, so they make money when they complete repairs to the home themselves. Often, Offerpad will mark up the price of the home before selling to maximize profits.
Is Offerpad legit?
Yes, Offerpad is legit. A quick internet search of Offerpad reviews on Reddit will reveal a plethora of people that can testify they have worked with Offerpad.
Does Offerpad negotiate?
Offerpad rarely negotiates on the final purchase price of the home, much to the dismay of buyers. While they do not negotiate on the final cost of repairs, they do allow homeowners to hire their own contractor to help them save money on the final cost of repairs.
Does Opendoor negotiate with buyers?
No, Opendoor does not negotiate with buyers. They are well known for their lack of negotiation regarding both the purchase price and repair costs. However, sellers that do not like the price offered can cancel the sale at any time without having to pay a cancellation fee.
Is Opendoor still buying houses?
Yes, Opendoor is still buying houses. They have continued to keep their business model over the years and continue to thrive. Throughout the pandemic, they maintained proper safety protocol to allow homeowners to sell their homes.
Check out the rest of our blogs for more information on selling your home!