FTC Fines Opendoor $62 Million

This just in. The Federal Trade Commission (FTC) will fine Opendoor $62 million for "misleading" home sellers.

Opendoor Labs, Inc. purchased just under 37,000 homes in 2021. Part of their marketing and sales pitch promised sellers would pay substantially less in fees when selling to Opendoor vs. a Traditional sale with a local real estate agent and the MLS.

According to the FTC investigation,

"the vast majority of consumers who sold to Opendoor lost thousands compared to what they would have realized in net proceeds
from selling on the market because Opendoor’s offers have been below market value on average and its costs have been significantly higher than what consumers typically pay.”  (emphasis added)

The FTC will issue customer refunds with the $62 million. The proposed settlement order also prohibits Opendoor from further misrepresenting what homeowners will have to pay, and requires the company their claims about costs, savings, or financial benefits.

Opendoor has been a difficult competitor for many agents to compete against, with promises of quick closings and market value or near-market value offers, combined with "lower costs" than when being represented by a real estate agent. Opendoor exploit's its status as "property owner" to operate outside the constraints of local real estate board rules and regulations. I am not surprised or saddened by this news. I am a local real estate professional, so my opinion is slightly biased. I believe there IS a place for iBuyers like Opendoor in the market, BUT the majority of home sellers will actually benefit more from partnering with a local REALTOR to receive customized and highly personal professional advice and services. The benefits of the "shop small" movement includes your real estate transactions.

Read the full story HERE.