Opendoor, the U.S. IBuyer that this week agreed to pay a $62 million fine for deceptive practices, followed that announcement by the Federal Trade Commission with an announcement of its own — a new sales program called Opendoor Exclusive that eliminates external agents and offers a first-come, first-served, no-negotiation sales program.
Opendoor called Exclusives “home buying at the tap of the button,” saying it would be “an e-commerce-like experience in order to streamline an existing process that creates far too much friction and cost.”
“I felt it was like shopping for a home on Amazon,” the company’s news release quoted one buyer, “Amanda M.,” as saying. It did not give her full name.
The program is fraught with complications, because the National Association of Realtors has been considering the elimination of “pocket listings,” those that are taken by an agent or broker and offered privately before they are added to a multiple listing service. Opendoor Exclusives offers homes for 14 days before they are listed in an MLS, for a lower price than will be offered through the MLS listing. (Of course, Opendoor said the price in Exclusives is not subject to negotiation; any price for the house listed on the MLS could presumably be negotiated.)
The company said it would eliminate bidding wars, because sales are first-come, first-served. The program has been offered in Austin, Houston and Dallas-Fort Worth, Texas, and is expected to be rolled out elsewhere.
“We see a future where people can buy and sell a home at the tap of a button — to make it as easy as hailing a ride or buying a plane ticket,” the company said.
Opendoor offers a refundable deposit; virtual tours; an appraisal-match guarantee up to $50,000, “fully digital checkout,” and the elimination of bidding wars. Buyers may use a buyer’s agent, but Opendoor won’t compensate that agent as would be typical in standard U.S. real estate transactions.
The Exclusives program was announced Tuesday. On Monday, the federal government announced Opendoor agreed to pay a $62 million fine to settle allegations that it misled consumers by offering below-market value prices, showing deceptive charts of sellers’ net proceeds, and more. The proposed settlement, which was accepted by Opendoor even though it denied the allegations will be used in part to reimburse consumers who sold to Opendoor.
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