Uncategorized August 2, 2022

FTC takes action to stop deceptive iBuyer programs from scamming home sellers

This week the FTC took action to stop the deceptive marketing and home buying process from Opendoor. 62 million dollars worth of fines, ouch! Opendoor is an iBuying company where they advertise to home sellers and makes claims that if they sell directly to them they will save hundreds if not thousands of dollars over selling with an agent on the open market. Essentially they claim if you just skip the selling process you will net more money than if using an agent and advertising the home to buyers.

When making offers Opendoor actually projected home prices lower than fair market value, they claimed they only made money on fees but were found to make their money based on buying low and selling high.

When a company makes a claim that seems too good to be true, do some research and contact an agent as well to see what the value on the market would be and what your net looks like then compare. It was found that Opendoor Service fees were equal to or higher than a real estate agents commission. Where is the savings they claim?

Many iBuyer programs claim repairs are based on their assessment instead of going on the market and having a buyer ask for unnecessary repairs. Who are they kidding, they make a high offer, typically sight unseen then send in their assessor (umm an inspector) and based on that report they then lower the price they are offering. Buyers will also make an inspection, sometimes these can be waived by the buyer) and then the buyer and seller negotiate. There really is no way to claim that the buyers are always asking for major repairs costing the seller money.

 

FTC Press release