Opendoor has quickly established itself as one of the most popular online real estate companies in the United States. Offering to buy houses for cash, only charging a service fee of 5% on the sale price, Opendoor eliminates a lot of the headache and hassle of listing and selling real estate – making for quick, predictable, easy transactions. For a lot of home sellers, dealing with Opendoor is a super simple and straightforward kind of process. They offer a quick sale, which people like. If you have wondered how to sell my house fast click here to learn more about the process. They don’t have to worry about the headache and hassle of dealing with listing agents. They don’t have to worry about expensive repair projects. And they don’t have to worry about haggling and negotiating all that much. But what about hidden fees?
Is Opendoor really only going to assess a 5% fee on the transaction? Or is there more to it than that? Let’s find out below!
Breaking Down Opendoor Fees
Below we give you a more complete picture of the kinds of fees you can expect doing business with Opendoor. Right out of the gate you have the 5% service fee that we mentioned just a moment ago. This is standard across the board on all transactions. On top of that, though, you have extra “hidden fees” from Opendoor that can include:
- 1% to 3% extra to cover closing costs
- 1% to 2% to cover any repairs that may need to be done
- 1% to 2% to cover any extra “miscellaneous” fees you might get hit with
At the end of the day, this usually means that Opendoor clients are going to be ponying up between 7% and 10% of their total home sale price when they go with this service. A lot of folks feel like this isn’t an unreasonable charge to take advantage of the streamlined transaction nature of Opendoor sales. Other folks, though, are going to be a little bit miffed at the fact that there are so many hidden fees – to the point where the 5% fee advertised is functionally doubled.
The Truth About Opendoor Hidden Fees
Opendoor has built a pretty solid reputation with its client base on top of really transparent pricing. While you aren’t going to be hit with surprise fees when the transaction closes – you’ll know exactly how much Opendoor wants for a fee upfront and before you sign on the dotted line – there are some “associated fees” that you might not expect when doing business with this company. For example, higher repair costs that are negotiated between Opendoor and the cash buyer can end up being higher than the 1% to 2% we mentioned a moment ago. Sometimes closing costs will be higher as well, and that could technically be considered a “hidden fee” – even if Opendoor is pretty transparent when it comes time to invoice this charge. To avoid as many surprises as possible, it’s really important to be as crystal-clear and as transparent about the value and condition of your property when working with Opendoor themselves. The more they know about the property (the more accurate a picture you can present to them prior to listing), the more accurate their actual Opendoor estimate is going to be.
Will Opendoor Cover Closing Costs?
It’s critically important to understand that if you sell your property with Opendoor they are not going to cover every penny of the closing costs. Sure, Opendoor is going to handle 50% of the fee for covering the real estate closing on your property. But you are going to be on the hook for the other 50%. Expect to have to pony over anywhere between 1% and 3% of the final sales price to cover this half of closing costs, fees that will go to covering:
- Title fees
- Transfer taxes and
- Any associated prorated property taxes that might need to be paid off before the sale can finalize
Opendoor often advertises these fees as being 1% of the final sale price, but in reality, it’s not uncommon for this number to get bumped up to between 2% or 3% when all is said and done.
How Do Opendoor Fees Stack Up Against Realtor Fees?
Selling your home with Opendoor is (generally) going to cost between 5.5% and maybe 10% of the total sale price when you really break things down. That might seem like a lot – especially if you are comparing this final figure to the 5% that Opendoor regularly (and, truth be told, aggressively) advertises. Stack the 5.5% to 10% with Opendoor against the 8% to 13% (or more) you’re likely going to pay with a traditional realtor, though, and you can see why so many like to do business with Opendoor. Combine that with the fact that you usually get a faster sale and are working with all-cash buyers (so you don’t have to worry about financing falling through) and this pretty quickly becomes a bit of a no-brainer for many.
At the same time, Opendoor is always looking to move properties as quickly as possible. They do everything they can to facilitate fast turnarounds and quick transactions. A local realtor who better understands your market specifically may be able to plan for a longer-term transaction, guaranteeing that you get every penny of potential profit from your real estate sale – money you inevitably would have left on the table with Opendoor. That’s something to consider, too. Of course, Opendoor is pretty famous for being really transparent about the reality of its business model as well. Opendoor states that it’s not uncommon for their clients to leave about 3% of the total sale price on the table going with Opendoor versus a traditional realtor. That’s something you want to factor into the equation.
Quick Opendoor Example
Just to give you a more complete picture of what it’s like doing business with Opendoor, let’s say that you are looking to sell your home with this company. Let’s assume (for the sake of simplicity) that the sale price is $300,000, with $200,000 left on the mortgage. Selling with Opendoor might look like this:
- 5% service fee
- 2% in repair costs
- 1% in closing costs for the seller
… Leaving a net profit of about $76,000. The same homeowner might be able to sell the property with a realtor on a transaction that looks like this:
- 6% realtor commission
- 2% in repair costs
- 1% in closing costs for the seller
… Leaving a net profit of about $73,000. That’s in a bit of an idealized kind of situation, though. It may be that the folks at Opendoor weren’t able or willing to pay $300,000 but instead offered $280,000. In this case, a seller would only be taking home a net profit of about $57,000 (give or take) – making it a no-brainer decision to go with a local realtor instead. At the end of the day, it really all comes down to running the numbers and thinking about how you want to sell your property. Contact us for more information about how to sell your house for cash and keep more money in your pocket. Opendoor is well worth a closer look, though, as they don’t have hidden fees you need to be nervous about.
How Much Will Opendoor Charge for Selling Your House?
Opendoor has a service fee of 5% across the board, but it’s not uncommon for that number to double in reality when all is said and done.
Is Opendoor More or Less Expansive Than Hiring a Realtor?
Opendoor and their service fee is really competitive with standard realtor commission rates across the board. At the end of the day, though, every property is unique (as is every transaction) it’s tough to say whether or not Opendoor is more or less expensive than hiring a realtor.
Will I Get Hit with Opendoor Hidden Fees?
Opendoor hidden fees surprising you. Opendoor has a legendary reputation for pricing transparency and you’ll know exactly what you are on the hook for before you sign on the dotted line. If you have wondered how can I sell my house online, click here to learn more.