Until mid-2022, the argument over whether Offerpad vs. Opendoor was the better iBuyer raged on. However, the falling housing market in 2023 has turned this rivalry into a question of which iBuyer will survive.
Both iBuyers experienced significant losses in the fourth quarter of 2022. To minimize their losses, Opendoor and Offerpad have lowered the number of properties they acquire and the amount of cash they provide. However, this technique may not be enough as the impending recession poses a risk to both corporations in the housing sector.
Is it wise to sell your property to any of them in this situation? Using an MLS listing may produce better results. You might obtain 100% of your property’s worth by selling it on an MLS through a cash buyer marketplace like Houzeo.
With Houzeo, your listing can be uploaded to the MLS within 24 hours, and you can also compare offers from various national and local cash buyers.
Which is Better: Offerpad vs. Opendoor?
What is Offerpad?
4.6/5
(179 reviews)
Queen's Take
Offerpad’s closing process is faster than other “cash for houses” companies. So, you should request a cash offer from Offerpad if you want to sell your house quickly.
Offerpad has been in business since 2017 and has bought, sold, and renovated nearly 10,000 houses. Offerpad has a team of experienced professionals and advanced technology to help homeowners sell their houses quickly for cash.
- Fees: 6% of Home Sale Price.
- Offer: 80% to 100% of the property’s Fair Market Value (FMV).
- Property Type: Only house built after 1960, with a maximum lot size of 1 acre and a max valuation of up to 1M.
- Terms: The closing can be done in less than 10 days.
👉 We Recommend: Offerpad is a good option as an iBuyer. However, their final cash offer is calculated after deducting closing costs, typically 6% to 13%.
- Sell As-Is: Offerpad buys houses in as-is condition, you do not even have to stage your home.
- Additional Options: You can even choose to stay long-term if you make a deal with them.
- Good Coverage: Offerpad buys houses for cash in 21+ markets across 16 states, including Alabama, Florida, Georgia, and Texas.
» Pros and Cons of Offerpad: Check out this detailed pros and cons of Offerpad.
- Cancelation Fees: There is a 1% cancellation fee if you back out of the deal after accepting.
- Closing costs: Offerpad service fees (5%), plus deduction for repairs, typically 1% to 7%.
- Lowball Cash Offers: The closing costs and service fees can add up to more than 10% of the purchase price in some situations, resulting in a lower cash offer than expected.
On TrustPilot, Offerpad has received 165 reviews and a rating of 4.6/5.
» Offerpad vs. Houzeo: Read more to find out which is better, Houzeo or Offerpad?
Offerpad is a real estate company that makes cash offers for properties. Unlike other cash investors, Offerpad makes their offers using algorithms. To arrive at a rapid value, they use local housing prices, dwelling attributes, and home conditions.
The business model of Offerpad is similar to that of Opendoor. Aside from the fact that Opendoor is a considerably larger business, the main difference between Offerpad and Opendoor is that the former often charges a higher 6-10% service fee, whereas the latter charges a lower 5% flat service fee. If you want a more in-depth look at Offerpad, click here.
For sellers, Offerpad’s only substantial benefit over Opendoor is their free local move service. If you live within 50 miles of your new house, Offerpad will pay for a professional moving service to transport your furniture, merchandise, and belongings.
What is Opendoor?
4.4/5
(2,698 reviews)
Queen's Take
Opendoor is America’s best and largest iBuyer based out of San Francisco. Opendoor has been in business since 2014 and they offer instant cash for homes.
Opendoor is America’s best and largest iBuyer based out of San Francisco. Opendoor has been in business since 2014 and they offer instant cash for homes.
- Fees: 5% of Home Sale Price.
- Offer: 90% to 100% of the property’s Fair Market Value (FMV).
- Property Type: Only on owner-occupied properties built post-1930 with a maximum lot size of 1.5 to 2 acres.
- Terms: Upto 45 days out.
👉 We Recommend: Opendoor is a reputed iBuyer company, however their final cash offer is calculated after deducting closing costs, typically 6% to 13%.
- Advanced Technology: Opendoor offers the best UI experience for users.
- Fast Cash Offers: They give a preliminary cash offer within 24 hours.
- Good Coverage: They offer services in 51 markets including top cities like Boston, San Francisco, and Birmingham.
- No Cancelation Fees: You can cancel at any time without the worry of being charged a fee.
» Pros and Cons of Opendoor: Check out our detailed pros and cons list on Opendoor.
- Closing Costs: You will have to pay closing costs, typically 6% to 13%.
- Additional Charges: They also have a hefty service fee of up to 14% of the sale price.
- Strict Criteria: They have very strict rules of buying and will sometimes even back out of the deal at last minute.
Opendoor has an average rating of 4.4 out of 5 stars from 2,698 reviews on Reviews.io.
» Opendoor vs. Houzeo: Read further to know which is the better, America’s biggest iBuyer or largest cash marketplace!
Opendoor makes all-cash offers to homeowners within 24 hours of submitting a request for an offer on their website.
Being one of the largest iBuyer on the market, if you accept an offer from Opendoor, make sure you’re willing to pay a service fee of 5% of the sale price.
Opendoor, unlike more typical cash purchasers, operates solely online and has already become an industry leader in real estate transaction analytics and housing market research since its launch in 2014.
Without displaying a home, selling to Opendoor provides a seller with a quick cash offer and flexible closing costs and dates. After providing the property address and completing a few simple requirements, a seller can receive a preliminary cash offer via Opendoor in minutes. The next step is to conduct a video walkthrough of the property so that Opendoor can make the best offer possible.
How Do Offerpad and Opendoor Work?
How Does Offerpad Work?
These are the steps involved when you’re selling your house to Offerpad:
💰 Ask For an Offer: Fill up the form on their website, which will require entire details of your house, right from the size, number of bedrooms, curb appeal to appliance type, and added modifications. For a more accurate evaluation, upload pictures or a 15-minute video of your house.
🔢 Calculation: Offerpad creates an offer using their AI-powered technology (automated valuation model) and consulting their team of experts.
👨⚖️ Response: Now’s your chance to accept or reject the offer made by Offerpad. You have 4 days to make up your mind. Should you reject the offer, there’s no room for negotiations. If you accept the offer, you can sign the rest online and fill in details about the closing date, choose a local move service, and more.
🔨 Inspection and Repairs: Within 15 days after you’ve accepted the offer, an inspection office is sent to verify the condition of the house for sale. If repair work needs to be carried out, you can:
- Do them yourself and get provide Offerpad with the receipts to adjust the cost.
- Let Offerpad do them for you, and you pay for them.
- Challenge the repairs and lose the offer.
📆 Close: Offerpad hires a title company or attorney. You sign on the dotted lines to validate the sale and receive your money.
How Opendoor Works
These are the steps involved when you’re selling your house to Opendoor:
💻 Request an offer: Submit your address and basic information, including property condition and characteristics in Opendoor’s estimate or mobile app for free. Opendoor will make a preliminary offer for your home by researching and evaluating the housing market. You have no obligation to accept this offer.
🏠 Virtual home tour: If you accept, Opendoor will evaluate the condition of your property by scheduling a free home assessment. The inspection takes 10-15 minutes usually. A company representative can virtually complete the assessment over live video with the homeowner, or the homeowner can take pictures and shoot a video with their camera or smartphone. The virtual walkthrough is a preliminary filter to pass your property in the next phase, inspection.
📒 Schedule an inspection: Opendoor will also send an estimator to evaluate the exterior of your house. Roughly 24 to 48 hours after these assessments, Opendoor will submit a finalized offer for the home. If you disagree with the final assessment results, you can cancel the deal anytime before closing without penalty.
💸 Close the sale: If you want to sell to Opendoor, you can move quickly to close. Sellers can close in 14-60 days. Before closing, you must upload information to an online dashboard to ensure your home is in the same condition as when the assessment occurred. Then, a few days after closing, you will receive the proceeds from the home’s sale.
How Much Will Offerpad and Opendoor Pay for a House?
Typically, Offerpad and Opendoor offer between 70% and 80% of a home’s FMV. Their first cash offer is typically more than their final one. The latter includes a 5% to 6% service charge and closing fees.
Opendoor and Offerpad take distinct techniques to repair expenses. Opendoor deducts the repair charges straight from the final offer, whereas Offerpad gives you an option.
You have the option of selling your property as-is and having Offerpad subtract the repair charges, or you may engage a contractor and fix the house yourself. If the repairs are significant, Offerpad may decide for you and subtract the costs from the final cash offer.
Offerpad vs. Opendoor Fees
Opendoor and Offerpad have similar pricing models:
Offerpad Fees
| Offerpad Express | 6% |
| Offerpad Flex | 6% |
| Closing Costs | 1% to 3% |
| Repair Costs | 1% to 2% |
| 🚩 Cancellation fee | 1% (if you cancel post the 4 day-cancellation windows) |
| Total Cost | 8% to 12% |
Offerpad will require you to use their title company. This does not cost you anything extra (since you must close at a title firm anyhow), but it generates additional revenue for them.
Opendoor Fees
| Service Fee | 5% |
| Closing Costs | 1-3% |
| Repair Costs | 1-2% |
| Total Fees | 7-10% |
Instead of deducting 5% to 6% from the price of the property, the charges are directly subtracted from the purchase price.
Buying from Offerpad vs. Opendoor
Offerpad sells these properties to new buyers with their groundbreaking feature of Instant Access— which allows you to visit a home without needing an agent.
You can visit the houses any day of the week between 6 a.m. and 11 p.m. by using their app to generate your own entry code. You can conduct your due diligence at your convenience especially since the house isn’t occupied. Offerpad will also pay your agent a buyer’s agent commission.
In the case of Opendoor, there are select markets where they sell homes. Visit their website and have a look at the homes they have listed. The other option is to approach an Opendoor agent to help you lock down a house that is not owned by Opendoor.
Whenever you’re satisfied with the prospective house, submit an offer through their app or through your real estate agent—if you do not have a real estate agent, Opendoor will assist you throughout the buying process.
Next, you can either finance your own home or choose to go with one of Opendoor’s lenders (which will, in turn, save you $1,000 at closing) and back up your offer for up to 120 days.
Select a closing day as per your convenience post and you may be entitled to a 1% buyer’s refund at closing. To ensure that you get your money’s worth and your new home is delivered as promised, Opendoor offers a 90-day repurchase guarantee for a 3% charge.
What Type of Houses Does Offerpad Buy?
If you want Offerpad to buy your house, you will have to meet their list of criteria. They are very particular about the homes they purchase. However, many Offerpad reviews state how home sellers have faced trouble due to these inflexible terms.
| 📍 Location | Within one of the 22 markets that Offerpad covers |
| 🏠 Type of Homes | Residential homes – single-family homes, condos, and townhouses |
| 💰 Value | Any home less than $1 million (also depends on the market) |
| 🌲 Plot Size | On less than 1 acre of land |
| 📆 Year Built | Built after 1960 |
What Type of Houses Does Opendoor Buy?
Opendoor also lists field criteria and terms your home needs to fit for a successful sale. Some of them include:
| 💰 Value | Values between $100,000 and $600,000 (up to $1.4 million in hot housing markets) |
| 🏠 Type of Homes | Single-family homes, townhouses, duplexes, and condos |
| 🌲 Plot Size | Lots no larger than 1–2 acres. (depending upon the market) |
| 📆 Year Built | Built after the year 1930 |
| 🏡 Condition | Owner-occupied homes only |
Offerpad vs. Opendoor Reviews
Let’s take a look at the reviews of Offerpad and Opendoor to decide on the superior alternative.
Offerpad.com Reviews
Most Offerpad reviews are positive, with an average rating of 3.9 out of 5 stars. From across 279 Offerpad reviews, some home sellers have been content with their services, while some have major complaints from this iBuyer.
- Yelp: 1.5/5 (58 reviews)
- Reviews.io: 2.17/5 (21 reviews)
- Sitejabber: 4.5/5 (27,486 reviews)
Opendoor.com Reviews
Customer reviews reflect using Opendoor is easy, and people have benefitted largely from the simplicity. Opendoor has a 4.3/5 rating across 3000+ reviews on Reviews.io, Yelp, and Better Business Bureau.
- Reviews.io: 4.4/5 (3,126 reviews)
- Yelp 3/5 (224 reviews)
Opendoor vs. Offerpad: Which One Should You Choose?
When it comes to choosing between Opendoor or Offerpad, both have their respective hit and misses.
You should consider Opendoor, only because:
- It overpays for the residences it purchases
- Is more actively in larger markets as opposed to its competitor (45 vs. Offerpad’s 22 markets)
- Offers buyers more flexibility
- No cancellation fee whatsoever
And you should consider Offerpad only because:
- Your house is worth more than $500,000
- You’re short on time to sell your house
The best thing you can do is ask everyone in your area for a risk-free, no-obligation offer. Although Opendoor pays the most on average, this does not guarantee that it will pay the most in every situation, so getting as many bids as possible can help ensure you get the best possible sale price and terms.
Offepad vs. Opendoor Alternatives
If you are looking to sell your house quickly for cash, consider these two alternatives that are superior to Opendoor and Offerpad:
- Houzeo: Houzeo is an FSBO website in the United States that allows you to sell your house on the MLS in as little as 24 to 48 hours. Using this site, you may get offers from various national and local cash house buyers, thereby increasing the value of your property. You can even obtain 100% of your home’s Fair Market Value (FMV) with Houzeo.
- HomeVestors: HomeVestors is a cash home buyer business that provides 50% to 70% of your property’s FMV. However, they may deduct repair charges at closing. Furthermore, because each HomeVestors office is separately owned, the level of care you receive may vary across the country.
Frequently Asked Questions
1. What’s the difference between Offerpad and Opendoor?
One of the most significant differences between these two iBuyers is that Opendoor enables sellers to cancel the deal without penalty at any time before closing, whereas Offerpad charges a 1% cancellation fee.
2. Is Offerpad and Opendoor the same company?
No, Offerpad and Opendoor aren't the same company. While they are both iBuyers, they have certain differences in terms of their service fees.
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