Metro Detroit

OpenDoor

June 13, 2024

Perhaps you’ve seen the commercials OpenDoor, offering homeowners the option of selling their home without all the baggage that comes with a typical listing: fixing, staging, showing… and most of all, paying a Realtor.

Instead, like most iBuyers, OpenDoor promises cash for your home, with a quick closing, and the ability to save you the headaches of a traditional real estate transaction, while also saving you the real estate commissions.

Delightful.

A situation presented itself recently, where working with OpenDoor seemed to make sense; a client went under contract on a new-ish condo that was non-warrantable, so it made more sense to put as much money down as possible.

This would mean selling her current home first, and then closing on the condo.

Problem – we only had 3 weeks to list her home, get an offer, and close. Possible, but not ideal.

So, we reached out to OpenDoor and after answering a series of questions and providing a quick video tour of the home, they sent us a “pre-offer” for roughly $380K.

THE OPENDOOR PROCESS

The comps put us closer to $350K, so we proceeded – meaning OpenDoor would now send an “inspector” out (though not to do an actual inspection), which would then lead to the “actual/final” offer.

After spending an entire weekend jumping down one rabbit hole after another on Reddit to research what to expect (don’t try this at home kids), the consensus seemed to be that the actual amount they pay will be less than the initial quote – on average it seemed by $15K-$20K less – and good luck closing because the communication is terrible.

Our experience was in line with that assessment, and then some; the final offer came in $30K below the initial offer and we spent every day over the next 2+ weeks dragging them to the closing table, kicking and screaming.

They initially gave us a closing date 2 weeks out, which became 6+ weeks with their final offer, but we wrangled that back down to 3 weeks – closer to what had been promised to us with the initial offer.

Throughout the transaction, we dealt with about a half dozen people that in short time we were able to determine were likely just one person, who invented the other names to make it sound like they had a team.

Incidentally, we also started a drinking game where we had to do a shot every time their “team” was referenced and I can safely say our livers have been permanently damaged.

CLOSING WITH OPENDOOR

In the end, it took daily follow-up, and an uncomfortable amount of aggression (balanced with sensible diplomacy), to get this to the closing table – albeit in the 11th hour.

We closed on our client’s home on a Friday (which funded later that day), and we were able to close on her condo the following Monday.

In the end, we were charged a 5% service fee, along with various other fees + their repair estimate, so in all, we paid 6% (aka the standard real estate commission). So no money was saved.

Additionally, the cash offer did allow us to close within the necessary timeline, but unlike a typical cash offer, the quick closing was not automatic – it needed constant babysitting and follow-up.

Finally, any headaches that might be commonplace in a traditional real estate transaction (with a Realtor), were a drop in the bucket compared to the level of stalking that would be necessary for a Seller to clear a path to closing with OpenDoor.

So… is OpenDoor better than your garden variety standard cash offer? No.

Is it a more viable option than a standard mortgage closing if you need to be closed and funded in roughly 3-weeks? Yeah, probably… but buckle up.

For more information on all your options when it comes to building, buying, or selling – let’s chat! Building may be our specialty, but our experience across the residential real estate spectrum runs deep.

Whatever it is that you’re searching for, don’t do it alone – let us ensure you’re seeing EVERYTHING out there, and that all options are considered before moving forward. Even better, you can work with us FOR FREE and save THOUSANDS OF DOLLARS on the sale of your current home!

Let’s discuss your new home needs and get your search started ASAP!

The owners of The New Home Experts®, have over 40 years of combined experience in real estate, much of that with builders like Pulte & Toll Brothers.  They also provide market research for area builders, developers, and national firms.  If you’re considering a new home, remember: the builders’ rep represents the builder, not you.  Work with the only local agents in Metro Detroit to specialize in new homes, and save money in the process – ask us how!