Hey guys Scott here with Homeport Residential and today I’m here to tell you about a real estate agent’s personal experience selling my home to OpenDoor. In this Blog Post I’m going to go over all the details of working with OpenDoor from my very first online home estimate through the closing date, and I’m going to go over OpenDoor’s service fees, closing costs, repair costs, and how much I made selling the home to OpenDoor verse selling the home with a traditional realtor and listing it for sale on the Multiple Listing Service or what’s known as the MLS. Hopefully, this objective review will help you decide if you should sell your home to OpenDoor.
Why Would A Real Estate Agent Consider Selling Their Home To Open Door?
Now the first question many of you might ask is why would a real estate agent, and broker sell their home to Open Door instead of selling it themselves or with another local real estate agent. That’s a great question and at the time I was recovering from having serious back surgery, and I lived around 2 hours away from the home. Additionally, the home was going to need a fair amount of deep cleaning and maintenance, as well as a significant amount of repair costs to get it ready for sale and I really needed to focus on my recovery, so I decided to give OpenDoor a try instead of going with a traditional real estate agent and sale process.
What Is The Home Selling Process Like When Selling Your Home To OpenDoor?
I started my home selling process to OpenDoor late one evening, by simply going to opendoor.com creating an account, and entering my home’s address and some very basic details about my home like number of bedrooms, baths, square footage, etc. Once I submitted all the required information I received an email from Open Door informing me they had received my initial home sale inquiry and they would get back to me within 24 hours with an initial offer estimate. The very next morning I had an email from open door letting me know my initial OpenDoor offer was ready. I was pleasantly surprised to see an initial offer range from $335,000 to $365,000. Based on the market analysis I did on recent comparable home sales in my neighborhood, I was only expecting to sell my home in it’s current condition, and it did need both repairs and maintenance, for anywhere between $305,00 to $325,000. So at this point OpenDoor’s offer estimate was looking extremely competitive to me and I decided to move forward with the process. It’s worth noting here that OpenDoor’s offer listed all the closing costs for my home sale, their service fee, repair cost, and closing date in a clear format, and when I closed on my home sale on the agreed upon date, all the cost remained the same and there were no hidden fees!
The next step was to schedule a 2 hour home inspection with an open door inspector and I did that through my open door concierge team member who was assigned to me and my home sale from the very beginning of the process through the close of escrow. I do want to take a moment and say that my open door team member did an amazing job throughout the entire sale. She was very responsive and addressed all of my questions and concerns in a timely manner.
How Long Does It Take To Receive Your Initial And Final Offer From Open Door?
Within a day or two after my home inspection was complete, I received my final offer amount, as well as my home assessment report from the home inspection. Open Door’s final offer amount was for $364,100 which was only $900 less than the top of their initial offer range. Along with the offer all of the seller charges were clearly listed on my seller dashboard. There was a 5% service fee, a request for a seller credit in the amount of $9,494 for repair costs and approximately $2600 listed for additional closing costs. This all looked great to me so I decided to move forward with Open Door, signed the purchase contract and everything went smoothly and on schedule until my home sale was complete.
How Does OpenDoor’s Offer Price Compare To Selling Your Home With A Realtor?
So let’s take a few minutes, break down OpenDoor’s purchase price, fee structure, and closing costs and compare them to how I would have done had I sold the home on the MLS myself or with a traditional realtor. Let’s start with the 3 best comparable home sales in my neighborhood. These three homes all sold within 60 days of my home sale, and are located within ¼ mile of my house. You will notice they are all 4 bedroom homes compared to my 3 bedrooms, and they are all at least 350 square feet larger than my home. Ideally, I would prefer to use 3 bedroom homes that are closer in square footage to my house for comparable sales, however there weren’t any 3 bedroom home sales in my neighborhood within the last 6 months of listing my home, so I had to settle for these comps. I will also mention that based on the listing photos for these homes they were all in significantly better shape than my home when it sold. You will notice that all of these homes sold for at least $12,600 less than my home sale to Open Door. Finally, Based on the size and condition of these comparable sales to my home, my best estimate for how much my home would have sold for by fixing it up and listing it on the MLS is around $330,000 to $335,000.
What Fees Does OpenDoor Charge To Sell Your Home?
Now the $9,494 repair fee I paid OpenDoor is on the high side, however this home really needed some work, and based on the condition of my home when I sold it, I expect that I would have had to put close to $10,000 into the home fixing it up and getting it ready for sale. So for me this repair credit worked out to about breaking even since I didn’t have to put a penny into the home before selling it to Open Door.
Next there is the 5% service fee that is charged by Open Door for their home purchase program. This fee is similar to paying a Realtor a commission to list and sell your home. Now I’m not going to discuss how much of a commission you might pay a Realtor to list your home because all real estate commissions are negotiable and there is no such thing as a standard commission amount.
Finally, there is the remainder of the closing cost for Title, Escrow and other miscellaneous fees that worked out to around $2600. This amount was about what I would have expected to pay for Title, escrow and other fees for a standard home sale at my sale price.
Is It Worth It To Sell Your Home To OpenDoor?
So based on my market analysis, some back of the envelope math, and how much I made on my home sale through open door, I estimate that I would have made around $18,000 dollars less had I hired a realtor to sell my home for me, and around $10,000 less had I sold the home myself as a licensed real estate broker.
Now that we know I was able to make more money selling my home through Open Door than a traditional home sale it’s logical to ask were there any downsides throughout the process? And In my case I can honestly say no. Most importantly, the purchase amount offered, the service charge, repair fees, and closing cost never changed! There were no hidden fees and I ended up netting the exact amount listed on my Open Door dashboard when I received my initial offer. The Open Door Team was extremely responsive and professional throughout the entire process and there were zero surprises or delays. Additionally, Open Door used the standardized purchase contract adopted by the California Association of Realtors which offers substantial protection for both home buyers and sellers, unlike some other iBuyer companies or new home builders, who use their own contracts which are written solely with their own best interest in mind. Overall I have to say that Open Door exceeded my expectations throughout every part of my home sale and I made more money as well, so that was a win win in my book.
Things To Consider Before Selling Your Home To Open Door.
I would like to wrap this post up with a word of caution and some things to consider before your sell your home to OpenDoor. Keep in mind that OpenDoor is in business to generate a profit like every other business out there, and often times newer business are willing to lose money initially in order to gain market share. So it wouldn’t surprise me as OpenDoor continues to grow in the real estate market if the amount they are willing to offer on future home purchases or their offer terms change and possibly come down. That’s why it’s always a good idea to have a professional realtor conduct a thorough market analysis on your home before you consider accepting any offer. If you have any questions about working with OpenDoor, other iBuyers, or anything real estate related, you can leave them in the comments or reach out to me directly.