This happens in every industry, especially once they start getting on a roll. New companies come about with a 'revolutionary way of doing business'. We've seen it before in real estate with Zillow, and we all know how wrong their 'Zestimates' are. This time, it's called Opendoor. They've started to roll out a plan in DFW trying to buy homes in cash. Sounds like a good idea, right? Cause at least you wouldn't have to pay those outrageous Realtor commissions, right? There's so much you need to know about this, and none of it makes you any more money by using them.
If you're house is worth less than $600K in Dallas-Fort Worth, you've probably received one or more letters from them telling you they'll buy your house at a certain price within the range listed on the letter. I've received a few of these, and they were always much lower than the real value of my home (what Realtor doesn't know their own homes worth?). On top of that, there's more. I have a current seller who originally entered into an agreement with them, only to back out after finding out what they were really about.
- They buy the home for lower than market value (cause saving Realtor fees somehow offsets this, right?)
- You must fix EVERYTHING on the inspection report, or they want a price reduction (off an under market value offer) to compensate
- They charge you between 6-12% of the sales price in fees (Candy's Dirt reports it's around 10%!!!! Realtors normally charge up to 6%, but it's negotiable!)
So let me get this straight. They're trying to buy it for less than market value because 'cash is king'. Then they want a completely clean home, with zero issues. Then they're gonna charge you WAY MORE THAN A REALTOR does in fees? How does that help you? Included in the fee they charge is 5.5% so the company can re-list the home with one of their Realtors! So you're paying for a Realtor you never even get the benefit of using!
There could not be a more perfect example of why you should always consult with a Realtor. With a Realtor:
- We list your home at market value (at least us good ones do)
- We help you NEGOTIATE repairs (i'm currently doing that on my listings i'm typing this)
- We normally charge up to 6% (instead of the 10% they charge), but Realtor commissions are negotiable in Texas.
- We are actually here to protect your best interest, and work on your behalf
Using a sample home worth $200K on the open market, the table below shows you how a scenario between the two would likely play out, given how the two sides operate. Assume house is paid off.
The bottom line is simple. When you're looking to sell your home, it's fiscally responsible (yes, political terms during political season) to consult with a Realtor and put numbers on paper to see what makes the most sense for you. It's our duty to help you make the most educated decision possible. When I'm at a listing appointment, I sit with the sellers and give them the numbers the home is worth based on comps, I advise them on what repairs need to be made in advance, and I calculate very accurately what they will walk away with at the closing table based on the figures we discussed. Opendoor comes nowhere near the level service I, or other top producing Realtors, provide our clients. Make the right decision, and consult with me first.