Maybe the question should be " Do you know how much money you lost by selling to Opendoor, OfferPad, ZHomes, Knock, UpNest, etc?"
OpenDoor, OfferPad, Zhomes, Knock, UpNest and a dozen other new listing alternatives are trying to disrupt the real estate industry by providing new processes and alternative listing services for sellers to sell for a discount in exchange for convenience, almost like trading in a car. It is like selling your car to CarMax. You walk in, give your car and walk away with cash.
It is good to have more options for the home sellers in any real estate market but one of the questions is that who is representing the seller in these transactions? Who looks after the interests of the seller especially when the buyer is a very well-funded corporation that is much more informed on the processes, fees, values, negotiations, documentation and representation than the everyday homeowner. These companies are the buyer and therefore are looking out for the buyer’s (their) interest. It is not in the buyer’s best interest to disclose how much the seller is leaving on the table. Sellers need to be diligent and get their "Net Proceeds to Seller" from a Realtor as well as their "Net Proceeds to Seller" from other alternative listing services and then make an informed decision.
These alternative listing services and others vary in fee structure, processes, and representation per company, but for our example today we are going to focus on OpenDoor.com's fee structure, process, values, documentation and representation per the information provided on their website and other public websites (See Sources section below).
While OpenDoor claims that the deal is transparent, the homeowners may not read the fine print to realize how much money the homeowner is leaving on the table, or as I call it the "Cost of Convenience". Below is a side by side comparison of not only the fees, but also the sales price difference. Pay most attention to the bottom line that shows the Estimated Cash Before Close / Net Proceeds to Seller, this is what the seller would walk away with using both processes OpenDoor or similar service and with a Realtor.
Note: Comparison below is directly from OpenDoor.com but has been edited to show a true comparison after researching both processes.
Source: OpenDoor.com - Dec 26, 2018
Estimated Home Ownership & Overlap
OpenDoor estimates that it will cost you 1% in overlap costs which means “This is an estimate of the additional costs you may pay for owning your home for a longer period of time, including taxes, insurance, utilities, HOA fees, and costs related to overlapping mortgages if your home sale and new property don't close at the same time. Source: Opendoor.com” But any good REALTOR can help you coordinate the sale & purchase of your new home so that there is no overlap especially in a seller’s market which makes this cost zero.
Seller's Pay for Repairs
Another important point to note, is that when selling your home on the open market, seller's are not required to do any repairs. That is a point for negotiation between buyer and seller. When selling to Open Door, they expect the seller to complete all necessary repairs that come up during the home inspection.
The bottom line is simple. When you're looking to sell your home, it's a good idea to consult with a top Dallas Realtor and put numbers on paper to see what makes the most sense for you.
A good Realtor will provide you an overview of the current market, prices of similar homes, repairs needed, time required to sell and can provide you the expected money in your pocket after all the closing expenses. In addition, your Realtor is your point of contact for the whole transaction from start to finish. So call us today if you are thinking of selling your home in Dallas metro area instead of listing your home with OpenDoor!
OpenDoor makes money by offering you convenience of selling your home quickly but you have to decide whether that convenience is worth the money you are leaving on the table.
About us:
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The above information regarding the “Is OpenDoor worth considering when selling your home in Dallas?” was provided by Nitin Gupta, CRS, GRI. Nitin has experience helping families buy and sell homes in the Dallas/Fort Worth area. If you’re thinking of selling or buying, he’d love to share his knowledge and expertise.
The communities he proudly serves include Coppell, Irving, Flower Mound, Southlake, Grapevine, Trophy Club, Colleyville.
