Pricing is at the core of what we do. Our goal is to consistently make a competitive offer and provide an excellent customer experience.
Unlike a home flipper, our business model isn’t based on buying low and selling high. You'll also see in your next lesson on qualifying customers that we do not buy distressed properties in desperate circumstances. We focus on homes in good condition and aim to offer a fair price. The way we make money is by charging a fee for our service.
This article will cover:
- How Opendoor values homes
- What goes into the service charge
How Opendoor Values Homes
To make an offer on a home, we rely on:
- Unique inputs about the home: One of the most important parts of our valuation process is inputs from the agent or homeowner about the home’s condition, features, and updates. You’ll have the option to submit photos of the home along with information about any improvements the homeowner has made.
- Comps and robust data model: Opendoor has built a valuation algorithm that can compare hundreds of pairs of comps (recently sold, comparable homes nearby) for any given address. We also factor in millions of data points for a single city and decade-long historical pricing trends at the local and macro level.
- Team of local pricing experts: Our pricing teams are comprised of former appraisers, real estate agents, brokers, property investors, and other real estate professionals who act as a final set of eyes on our data model, ensuring we have a local perspective on neighborhood trends.
"You can say pretty conclusively iBuyers are making fair offers on the homes they buy."
- Mike DelPrete, real estate strategist in The Wall Street Journal
Service Charge Overview
Here's a breakdown of how we come up with our service cost:
- Buyer’s agent commission: Paid to the agent of the next buyer, similar to a traditional sale
- Listing cost: Cost of prepping, staging, and listing to get the home ready for sale.
- Holding costs: Opendoor pays property taxes, insurance, utilities, and maintenance costs until we find the next buyer. We calculate this by looking at how long it took similar homes in your area to sell as well as local market trends/seasonality.
- Convenience charge: Opendoor’s fee to deliver a hassle and stress-free experience.
You can see our current pricing and fees here at any time.
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