Opendoor is a US-based real-estate startup with the promise “With Opendoor, your home is sold the minute you’re ready.”. Here is an article talking about the risks associated with the company and the sector in general.
Opendoor is unique in two respects:
- First, Opendoor is focused on sellers, the party with the least leverage in a typical residential transaction. Real estate agents sell lots of houses, buyers can choose from lots of houses, but sellers only have a single house to sell, which means the cost of any delay or complication falls on their shoulders. Opendoor relieves that burden by making an offer for the house based solely on an address and questionnaire; if the seller accepts Opendoor will send an inspector to verify the house, agree on any necessary repairs (which are paid by the seller), and close the deal as soon as the seller wishes.
- Second, Opendoor explicitly charges sellers for having replaced total uncertainty with a bank wire: not just the same 6% that typically goes for buyer and seller agent fees, but also an additional 0-6% for “market risk” — i.e. dealing with the uncertainty of actually showing and selling the house — along with the aforementioned repair costs.