Take the Pain Out of Selling Your House – Online
If you've ever sold a house, you know what a major headache it can be. First, there's the hassle of pinpointing the right real estate agent. Once you hire an agent and list your home, then comes the really hard work.
You'll need to stage your home and keep every room meticulously clean so that total strangers can tramp through them on a daily basis. Not to mention you'll probably have to get lost for all of these showings. (Most real estate agents recommend that you leave the house when a potential buyer comes to take a gander at your property.) That means you'll have to pack up the entire family, including Fluffy and Fido, and find something to do outside of the home for an hour or so – for every single showing. (For more, see 7 Absolute No-Nos When Selling a Home.)
When you finally get an offer, you'll have to haggle with the buyers, set a closing date, cough up real estate fees and deal with an avalanche of paperwork. To make matters worse, the average property sits on the market for more than three months, and many home sales end up falling through in the end. No wonder people say selling a home is torture.A Different (Online) Option
What if someone could take all the pain out of the home-selling process? That's exactly what one new start-up promises. Based in San Francisco, OpenDoor Labs Inc. (known to consumers simply as Opendoor) pays cash for homes, then quickly resells the properties, usually within 90 days. The company currently buys and sells exclusively in the Phoenix market, but it is opening in Dallas soon, and has also stated plans to expand into Portland, Ore.
Once you enter your property information on the company's website, Opendoor makes an offer and purchases your home – potentially all within three days. According to the company's website, Opendoor makes you a competitive cash offer, so you can skip the months of selling and start your next chapter."
After purchasing a home, Opendoor gets the property ready for resale. It handles all the paperwork, inspections and any necessary repairs and lists the home on real estate sites. On average, the company makes a reported profit of $10,000 to $15,000 on each home. Opendoor, which primarily appeals to sellers who need to sell and move quickly, has bought and sold more than 200 homes since it started up in March 2014. In 2015, the company also launched a service for home buyers, allowing them to browse house listings, schedule a showing and even make an offer.Painless Process
Selling your home to Opendoor is surprisingly easy. To get started, you simply visit Opendoor.com and request an offer. You'll be asked to enter information about your property, including everything that makes your home special and other features that could improve its value. According to the website, this process only takes a few minutes and is completely free.
The same day, Opendoor sends you an offer based on a comparative market analysis as well as the information you provided. (Opendoor built its own price models and algorithms to fast-track this process. The system mines public and private data to generate a fair offer price within minutes of your online submission.)
If you choose to accept the offer, you'll then schedule a free home inspection through Opendoor. During this inspection, Opendoor will evaluate your home to confirm that it's in good condition. Next, you choose your closing date, which can be anywhere from three to 60 days later.
From here, Opendoor handles all the details of the sale, including arranging escrow. (You'll be charged a fee for this service, which is about 2% to 4% more than you would pay a traditional real estate broker.) On your scheduled closing date, you'll receive all the proceeds from the sale in cash.Is It a Good Idea?
If you're a skeptical home seller, you may think this sounds too good to be true. Is it really a smart idea to sell your home for cash to an online company? It depends, says Brendon DeSimone, real estate expert and author of Next Generation Real Estate: New Rules for Smarter Home Buying & Faster Selling" (Changing Lives Press, 2014).
You've seen those signs, ‘We buy houses for cash,' he says. It's more common now than it was a few years ago. These investors are in every market, and they're constantly offering to buy your house, make it quick and easy, and pay cash with no contingencies. Opendoor is basically the same idea.
DeSimone says whether or not this is an effective way to sell your home really depends on your unique situation – and particularly how much time you have. It's good for people in a rush, he explains. They don't have time, and they want a sure deal. Whether you're going through a divorce, need to relocate quickly for a job or are under the threat of foreclosure, Opendoor could be a viable way to sell your home fast. This is for those people who just want to get it sold, get the cash and be done in 30 days, he says.
Opendoor also appeals to sellers who are looking for a sure thing. There's a whole new group of people out there who just want some certainty, DeSimone explains. They don't want to deal with open houses, and they don't want their house exposed to the whole world on the Internet. They don't want to wait three, six or nine months. They just want to be done with it.
He offers the example of an empty nester couple with plenty of equity in their home. Say they want to move out of state, and they want to know that they can move on November 15th, he says. There's some certainty to doing this because you have a buyer lined up, and you have a closing lined up. When you list your house, there's a lot of uncertainty. It could take months, it could take a year. You don't know how many offers you're going to get, and you have to keep your house clean and organized. For someone who doesn't need every last penny out of that house but is looking for certainty, this is for them.When the Traditional Route Pays
On the flip side, buyers who want to make top dollar on their home should probably opt for the traditional real estate route. It is a well-known fact that when you go on the market, and you fully expose your home to all the brokers and the agents and the MLS [multiple listing service], that's going to get you top dollar for the house, DeSimone points out. That's real estate 101.
When you sell your house online for fast cash, you're definitely not going to make top dollar. If you don't care about getting every last penny out of it, and you're OK with missing out on three, five or even 10%, that's great. Just know that you could be leaving money on the table.The Bottom Line
Opendoor offers a quick and easy solution if you want to sell your home fast with no uncertainty. However, you probably won't make top dollar unless you list your home and suffer through the traditional home-selling headaches. If you actually do the whole dog-and-pony show, you'll get more money out of it in the long run, says DeSimone. But to some people, getting out quickly is more valuable than an extra five or 10%. That's the question you have to ask yourself: ‘What's more important? Do I want certainty or do I need every last penny out of my house?'
You may also be interested in A Homeowner's Guide to Online Real Estate and Selling Your House? Avoid These Mistakes.