Opendoor vs Offerpad: How Do These Homebuying Companies Match Up?

What is Offerpad?

Offerpad is the second-largest iBuyer company in the country. It promises a cash offer for your home in just 24 hours. Like Opendoor, it also offers a home listing option for sellers.

Special perks of working with Offerpad include three extra days to stay in your house after closing and moving cost assistance.

When you contact Offerpad for an offer, the company will ask you a few questions and let you upload photos of your house. Like Opendoor, it typically performs a home inspection before finalizing its offer. It also gives you the option to either take their cash offer or list on the open market.

Similar to Opendoor, Offerpad sells the homes they purchase.

Opendoor vs Offerpad: How are they different?

On the surface, these companies have many similarities. However, their differences could affect the success and profits of your home sale, depending on your selling and moving objectives.

Fees paid

Opendoor and Offerpad have similar fee structures. The main difference is whether you decide to list with them or cancel an accepted offer.

If you accept Offerpad’s cash offer, you’ll pay a service fee that is 5% of the offer price plus 1% in closing costs. Meanwhile, if you list with the company, it charges 6% in commissions, 1% in closing costs, and an estimated 1% in seller concessions. If you cancel with Offerpad, however, you’ll pay a fee that’s 1% of their offer price.

Meanwhile, Opendoor’s cash offer comes with a 5% service fee and an estimated 1% for closing costs. The fee remains at 5% when you list with them, unlike Offerpad which adds a percentage point. Listing with Opendoor comes with 1% in seller concessions, but there’s no cancellation fee.

Post-closing occupancy

If you’re selling in distressed or urgent circumstances, you might not have a place to go lined up after closing. In normal home sales, many real estate agents are negotiating rent-back periods for home sellers.

Offerpad will let you stay for three days after closing. In contrast, Opendoor extends a “Late Checkout Program” to home sellers who take their cash offer, letting them stay in the house up to 17 days after closing.

Opendoor charges a daily rate that is calculated based on home value, utility costs, and days of rent-back. They also hold a $2,000 security deposit back from your sale proceeds, keeping it in escrow and releasing it once you’ve moved out.

Help with home improvements

Want to make a few repairs to your home before selling? Sometimes cosmetic fixes or minor repairs could increase the offers you receive, putting more money in your pocket. But it can be hard to come up with the money for these repairs if you’re already struggling or your money is tied up in other aspects of your moving plans.

Offerpad seeks to solve this problem by extending a home improvement advance to homeowners. It provides interest-free funds, requiring no cash deposit, so you can paint, install new flooring, fixtures, or countertops, and buy new appliances. It also offers free pre-listing services such as carpet cleaning, house cleaning, pool services, handyman services, and landscaping.

When you sell, they deduct the costs from your sale proceeds. If you accept their Express Cash Offer, you can skip repairs but expect a lower offer, as they take on the responsibility and cost of such fixes.

Opendoor doesn’t provide any of these services, nor do they offer an advance for you to fix up your home before listing. Any repairs that they deem necessary when they make a cash offer are deducted from your offer price, and they could require that the repairs be done before you close.

Markets served

Neither Opendoor nor Offerpad is nationwide — they both cover select markets, primarily larger metropolitan areas. Depending on where you live, you may not have a choice between which company to work with.

Opendoor operates in 50 markets in 26 states and the District of Columbia, from Austin, Texas, to Tucson, Arizona, but it doesn’t offer all its services in every area.

Meanwhile, Offerpad buys houses in over 1,000 cities and nine states, heavily concentrated on the West Coast. Similar to Opendoor, its program isn’t available in all areas of these markets.

How are they the same?

Opendoor and Offerpad offer several similar services and features, with a few small differences in the details.

Home value estimates

Both companies make an offer on your home by estimating its value. They look at recent comparable sales in your area, estimate your home’s condition, and make an offer on that basis. Because both companies resell your home for a profit, they are both likely to offer below-market value.

For-sale-by-owner (FSBO) listings

What if you don’t like the cash offer they give you? Both companies allow you to list your home for sale by owner (FSBO) on their platforms.

With Offerpad’s List with Confidence, you can put their cash offer on hold and try your luck listing on the open market. You can take advantage of its home improvement advance to make repairs and upgrades before listing, though you have to work with its program coordinator and contractors. The advance is offered interest-free.

Opendoor also lets homeowners list instead of accepting their cash offer. You can work with local industry experts to help you set your home’s price. While its service fee of 5% saves you more money compared to the nationwide standard of 6%, it’s unclear if that fee includes the buyer’s agent’s half.

Unlike Offerpad, Opendoor doesn’t offer a home improvement program. Instead, the repairs will be based on the buyer’s inspection.

Buy and sell at the same time

Many real estate companies seek to be a one-stop-shop for their clients’ real estate needs. Opendoor and Offerpad offer programs that allow buyers and sellers to buy and sell homes simultaneously.

Opendoor’s buy-sell landing page explains that you can sell your house directly to them, get everything you need to buy a home in one place, and avoid paying for multiple moves and mortgages. You can partner with one Opendoor team every step of the way.

Offerpad’s buy-sell landing page provides separate options to buy or bundle. By bundling their services and coordinating your close dates, you can potentially save thousands of dollars and avoid paying double mortgages.

Offerpad also provides home loan mortgage services in Alabama, Arizona, Colorado, Florida, Georgia, North Carolina, Tennessee, and Texas. You can both apply for a mortgage loan for a new purchase and refinance an existing mortgage.

Opendoor scaled back many of its in-house home loan services and appears to be using partner lenders to help its clients find the best mortgage solutions.

Buy-sell apps

Both companies offer buy-sell apps with similar features. The apps allow customers to do everything from requesting a cash offer to shopping for a new home. They also allow you to communicate with their team members.

Opendoor’s app strives to be an all-in-one solution for buyers and sellers. It offers convenient features for shopping for and purchasing a new home, selling your current house, and closing the deal with speed and efficiency. Apple users give Opendoor’s app a 4.8 rating out of 5 stars. Google users give the app 4.4 stars.

Offerpad also describes its app as an all-in-one solution for selling your home or buying a new one. For sellers, the app is designed to be a simple, seamless way to manage the entire sale of your home 24/7. For buyers, the app provides robust features to shop for a home home using Offerpad’s smart search filters and detailed property information. Apple users give Offerpad’s app a 3.4 rating out of 5 stars. Google users give the app 3.1 stars.

How do Offerpad and Opendoor work for homebuyers?

Whether on a browser or through their apps, homebuyers can shop for homes as if it were a transaction in the regular market. When you buy a home from Opendoor or Offerpad, however, you’re likely buying a home they have purchased and are reselling. A number of reviewers have noted that the quality of repair workmanship wasn’t up to their satisfaction (see some of the reviews below).

• You can shop for Opendoor homes at this link: opendoor.com/homes
• You can shop for Offerpad homes at this link: offerpad.com/buy

How do Offerpad and Opendoor make money?

Both companies make money similarly. They buy homes and make money off the fees that they charge sellers. With Offerpad’s mortgage lending services, they also make money from fees and interest charges. In addition, homebuying companies typically repair the houses they purchase and sell them, which will also bring in revenue.

Opendoor and Offerpad reviews

How do online reviewers* rate Opendoor and Offerpad?

Opendoor review ratings

Google Reviews: 1.3 out of 5 stars from over 60 reviews

Most Google users do not give Opendoor a favorable rating. Some clients point out concerns over offer prices, which can be below market value, and the steep cost associated with the service fee and repairs. Negative buyer reviews have surfaced regarding the workmanship of repairs made on Opendoor properties sold through their website.

Trustpilot: 4.6 out of 5 stars from over 500 reviews

Many Trustpilot reviewers praise the Opendoor process, calling it smooth and seamless. The staff is often described as professional and respectful. Positive reviews also say that the video walkthrough and offer process were quick and painless. Some unhappy sellers used the term “bait and switch” to describe the difference between the preliminary and final offer.

Meanwhile, some clients who bought homes resold by Opendoor indicate general unhappiness with the quality of work done. They include complaints that they had no choice about using Opendoor’s closing attorney or title company, discovered serious issues with the house, such as mold problems,  encountered mixed-up paperwork, and dealt with poor communication.

Better Business Bureau: 1.13 out of 5 stars from over 200 reviews

Similar to the company’s Google reviews, BBB reviewers also rate Opendoor with a low score. Sellers who posted negative reviews use the term “bait and switch” in their reviews on this site, too, describing unprofessional communication and poor service. Buyers’ negative experiences continue, from poor communication to repairs done improperly to issues with gas leaks.

One buyer says that the company didn’t disclose serious, costly sewer and plumbing issues, but Opendoor wouldn’t negotiate. Another had to walk away from the purchase when the appraisal came in lower than the offer and Opendoor wouldn’t negotiate, telling them instead to bring the difference in cash to closing.

Sitejabber: 1.6 out of 5 stars from over 10 reviews

On this review site, many clients expressed frustration over paperwork problems, withdrawn offers after inspections, and increased fees. Some alleged that the company aimed to lower the offer as much as possible.

Offerpad review ratings

Google Reviews: 3.8 out of 5 stars from over 300 reviews

Positive reviews on Google mentioned Offerpad’s well-oiled selling and buying process. Customers said they felt the company had their best interest in mind every step of the way. Sellers expressed gratitude for the team’s professional, clear, and prompt communication. Several posts mentioned how selling for cash took the stress out of their home sale journey and relocation.

Trustpilot: 2.2 out of 5 stars from over 180 reviews

The majority of past customers didn’t appreciate that Offerpad lowered their initial offer by thousands of dollars after the home inspection. Others were frustrated that the company wanted expensive cosmetic updates. Some felt Offerpad wasted their time.

Better Business Bureau: 4.15 out of 5 stars from over 250 reviews.

Home sellers who left reviews with the Better Business Bureau report that there were no hiccups with their transactions with Offerpad. Everything went smoothly and they received acceptable offers. However, a few reviewers complained about offers they felt were too low.

Buyers who purchased homes resold by Offerpad had a different experience — they complained of poorly done repairs, leaks, and shoddy work. Others say that they tried to buy homes but had offers canceled without explanation or that Offerpad didn’t communicate with their agents.

Sitejabber: 2.7 out of 5 stars from over 60 reviews

Most of the customers who left reviews on this site expressed disappointment over the lowball offers. Some were frustrated at the rude inspection team and costly repairs. Meanwhile, buyers say that the minimal cosmetic changes that Offerpad made when reselling the home they purchased were of poor quality.

Alternatives to Offerpad and Opendoor

Opendoor and Offerpad aren’t the only cash offer companies out there — and if they don’t operate in your city or state, you might need to look elsewhere. Here are a few other companies to contact:

• Simple Sale (a HomeLight platform)
• We Buy Houses
• Clever Offers
• Keller Offers
• Mark Spain
• Express Offers
• HomeGo
• Homeward
• Sundae.com

If you’re a home seller considering Opendoor or Offerpad, consider requesting a no-obligation cash offer through HomeLight’s Simple Sale platform. It’s a fast, free online tool that provides a cash offer to buy your home. Receive the instant cash offer within 24 hours and close in as little as 10 days.

Simple Sale also compares your cash offer amount with an estimate of what you might receive when listing your home with a top agent.

Which is better, using an iBuyer or working with a Realtor?

The answer depends on your selling objective. For speed and convenience, an iBuyer is a good option. They don’t ask you to pick up the kid’s toys, paint the spare bedroom, or change the lightbulbs. Their process moves quickly from the accepted offer to the close date, and you can get your money and move within weeks.

However, if you’re selling a home in fairly good condition and aren’t in a hurry, working with a Realtor may be the better choice. Realtors have local market expertise and can help you price your home competitively. They’ll market it so that you might receive multiple offers, which can drive the final selling price above your listing price.

Yes, a Realtor could request minor fixes and cosmetic updates, but you’ll typically see their benefit in the higher sales price. It’s worth it to talk to an experienced agent and see what they could do for you.

What real estate services does HomeLight offer?

HomeLight offers additional services, too, as well as more tools for home sellers.

• HomeLight Simple Sale: Simple Sale connects you to one of the largest networks of cash homebuyers in the country. You can receive a no-obligation all-cash offer in 24 hours and close your home sale in as little as 10 days. Our platform will also show you options, such as what a top real estate agent might be able to fetch for your home, and who the highest-rated agents are in your area.
• HomeLight Agent Match: If you want to explore listing your home on the open market, our agent match tool will help you find an expert to talk to about your options. After you answer a few questions, we’ll provide you with the names of several top agents in your area. An experienced agent can provide a comparative market analysis to help you determine your home’s worth in its current condition and its possible sale price in the market after some repairs.
• HomeLight Buy Before You Sell: Through the Buy Before You Sell program, HomeLight can help you unlock a portion of your equity upfront to put toward your next home. You can then make a strong offer on your next home with no home sale contingency. You can also receive a guaranteed offer on your home in the event that it doesn’t sell on the open market.

Additional tools and resources

• Home Value Estimator: Want to find out how much your home is worth before accepting a cash offer from an iBuyer? Our home value estimator analyzes up-to-date sales information for comparable properties in your neighborhood, asks questions about your home’s condition, and provides a ballpark estimate of its value.
• Net Proceeds Calculator: How much will you make selling your home? Use our calculator to estimate the cost of selling your home and the net proceeds you could earn from the sale.
• Home Affordability Calculator: It’s not a good idea to strain your budget, so how much house can you afford to buy after selling your current residence? After answering a few questions about income and expenses, our calculator gives you a home-shopping budget.
• Best Time to Sell Calculator: If you’re trying to sell quickly and for the most money, when is the best time to list? The best time to sell calculator analyzes sales data where you live to determine the best time for you to list your home.
• Agent Commissions Calculator: How much will you pay in commission to an agent when you sell your home, and how does it compare to Offerpad or Opendoor’s fees? Our commission calculator helps you figure that out.
• Informative blogs in the HomeLight Seller and Buyer resource centers give you access to expert advice and quick tips.

iBuyers can be a good option, but homework is a must

Some of the complaints about iBuyers come from a lack of industry knowledge. These companies are primarily best for homeowners who need a fast, easy sale, whether it’s needing to sell to move an elderly relative into assisted living or to accommodate a sudden job change. If you’re in this situation or own a home that you can no longer afford or don’t want to take the time to prepare, an iBuyer can be a good option.

Homeowners who have no external pressures on the sale, and a home in decent — even not great — shape, would be wise to also consult with an experienced real estate agent. A proven agent can help you price your home competitively, negotiate for a longer rent-back period if needed, and connect you to various qualified buyers. HomeLight’s Agent Match service can connect you with a top real estate agent in your area.

Writer Dena Landon contributed to this story.

Editors note: The specifics of the mentioned buying programs can change. Please visit the company websites for the most up-to-date information.

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