Leaving Money on the Table with Opendoor – ibuyers taking your equity from you
Its time to sell my personal home. We have a situation that requires at least 2 more rooms for a family member to live with us. I know my homes value (I am a Realtor, 20 years now and I average $10-$12M a year in annual sales, so I am no slouch). I priced my house after running comps, at a sweet spot of $474,900. Now, I could have “set the market” at $500k or “given it away: at a price lower than $474,900. I have a corner lot, a swimming pool wrapped with travertine tile which cost north of $50,000 to build (pool is a big one, and six feet deep at its deepest point). Lot size is just over 12,000 square feet. We have a huge grassy area for kids and dogs. Plenty of mature shade trees. Sport Court and RV Slab and Gate.
The house itself is a 3 bedroom plus den, along with 3 bathrooms (3 full, one powder). Split floor plan, 16 foot ceiling in the great room (kitchen and dining as well) with 10 feet everywhere else. Bamboo flooring in the great room and bedroom #3. Carpet in the master and guest room. Tile everywhere else. All single level with just under 2,400 square feet, plus a 3 car garage. So its a nice house. Fulton Home actually (Solid builder in AZ, in fact, we had it inspected, only items “wrong” with the house were two windows that no longer want to stay open). Located in a neighborhood of 109 other homes, all single level or basement homes. No two story homes to be found.
So, I reached out to Opendoor and Offerpad just out of curiosity and to honestly see what they offer and how. I am going to drop numbers now, so be prepared.
Again, my house comps out at $474,900 (sweet spot as I call it).
Opendoor offered me a price range of $398,000 to $486,000. The Catch? They tack on a fee of 8%. Convenience fee they call it. oh, and an additional 2% for closing costs etc. So 10% right off the top. Now, we know everyone needs to make money, so they have to “pay” less than its worth for them to stay in business (I totally get that) BUT… For Math and fairness, I averaged out their offer to $442,000. Now to the math:
Open Door Offer:
$442,000 x 10% = $44,200 which means my NET with OD would be $397,800
(right at their low range of the offer provided)
$436,422 x 10% = $43,642 which means my NET with OP would be $392,779
(I used the same percentage to be consistent. Offerpads fees are all over the place)
Conventional Sell (with a Realtor):
$474,900 x 7% = $33,243 which means my NET with a REALTOR would be $441,657
Did you get all that? Okay, so lets break it down now. After all is said and done, Opendoor leaves me with $397,800. Offerpad leaves me with $392,779 and using a Realtor, leaves me with $441,657.
So the question becomes, is it truly an “inconvenience” to have potential buyers walk through your home? Is it really such a hassle to have one or two (maybe three) open houses in a Month to sell your home for “Fair Market Value?” Remember, I priced my house in the “Sweet spot” not setting the bar, but not giving it away. This “click of the mouse” convenience is going to cost, based on my scenario, a home owner between $43,587 and $48,878 dollar!!
For those of you who don’t realize it, for every $10,000 you finance, you’re adding $60 a month to your payment, So if you were able to use $40,000 of the above proceeds as part of your down payment, you’ll be saving yourself $240 per month (that’s $2,880 a year-that’s a nice vacation if you plan it right).
You need to sell your house, educate yourself. This formula may work for some, but on a whole, I cannot imagine anyone walking away from $30 to $40,000 dollars just to avoid having buyers walk through their homes (which is all done by appointment nowadays, so there are truly no “drop ins” as some of the commercials you see and hear lead you to believe). Get your FREE market value by clicking here, fill out your info, and I’ll get back to you within 24 hours. No hassle, no spam, no lighting up your phone or in-box, just an honest opinion, based on your home and its comparable sales, then you make the choice.
I can pretty much guarantee you, I will save you money and put more of it in your pocket than Opendoor, Offerpad, Zillow, Redfin etc etc etc.