Kim Tucker
$62 M Fine from the FTC This week the Federal Trade Commission fined Opendoor $62 million, saying the iBuyer misled customers by saying they could make more money selling homes to the company than they would selling the traditional route. The consumer was supposed to save based on lower fees and higher offers. But the FTC found that open market sales were often higher and Opendoor charged more fees than Realtors. At issue was false advertising, not their business model.
Partnership with Zillow PRNewswire shared that Zillow & Opendoor have announced a multi-year partnership that will allow home sellers on the Zillow platform to seamlessly request an Opendoor offer to sell their home. This will make it easy for customers to compare it to an open-market sale using a Realtor. At the same time, they also announced their new Opendoor Exclusives where they offer homes at a discount to subscribers 14 days before listing in the MLS>
Slashing Prices Inman is reporting that Opendoor is cutting prices in a bid to get surplus inventory off the books. They dramatically boosed home sales in the 2nd quarter of 2022, generating $4.2B in revenue, but they were sill showing $54 M in losses.
Buyers and real estate investors do have a lot of things in common when it comes to buying and selling houses. Opendoor, like most real estate investors that market to buy houses, said that they made market value offers. Sometimes making claims that they were "Fair Market Value" and at others "Competitive Market Value."
What is Market Value? When I was new to real estate agent, I did a lot of broker price opinions for the banks. When I would run comps on a house I was to provide the bank with several values: The price I thought it would sell for in 120 days or less if it was all renovated, listed with a Realtor, and sold in a traditional manner. The price it would sell for again in 120 days or less, again with a Realtor, but now selling As-Is with no repairs or updates. The price it would sell for in 30 days or less, as-is, to a cash buyer if it were listed by a Realtor. Those three values can vary quite a bit and we need to make sure we know the difference and why there is a difference. The biggest difference between the 3 values is the time value of money. A homeowner can spend a lot of time and money getting a home ready to sell, skipping all that time, effort and money has value. And hiring a Realtor to market
