This story was updated with new information on Monday, August 1, 2022
Do you know the truths about selling to Opendoor in Charlotte NC? Whether it’s TV, radio, billboard or print ads, you probably have seen and heard advertisements by direct home buying companies such as Opendoor, Offerpad and others. These companies promise to give homeowners a guaranteed or instant cash offer for their home. They promise the convenience of a hassle-free home sale. But at what cost? Just how much is this convenience really worth?
According to Inman News, the Federal Trade Commission recently took action to stop online homebuying firm Opendoor Labs, Inc. from cheating potential sellers with misleading claims. The company will have to pay a $62 Million Dollar fine and was ordered to stop deceiving consumers about the supposed benefits of its service. At issue was the FTC’s findings of Opendoor cheating potential home sellers by tricking them into thinking that they could make more money selling their home to Opendoor than on the open market using the traditional sales process. However, in reality most people who sold to Opendoor made thousands of dollars less than they would have made selling their homes using the traditional sales process.
So just how much is the convenience advertised by iBuying companies such as Opendoor really worth? We sounded the horn back in 2019 and published actual sales data which is shown below:
Is the convenience of an instant cash offer from these companies worth $12,568? If so, you’re in luck! Because that’s the average amount that Charlotte homeowners have undersold their homes to Opendoor and others during the most recent six-month period as of the original publishing date. The average margin is even wider with their competitor Offerpad. It’s supposed to be a new high tech way of selling a home. However, the concept is not new at all. You’ve likely seen the “We Buy Ugly Homes” slogan on signs and highway billboards. Such offers come from real estate investors who buy homes from sellers at steep discounts just to turn around and re-sell them for significant profits. Direct Homebuyer offers are just a high tech approach of doing the same thing.
These companies are betting on convenience being a primary motivation for many homeowners. However, it’s very important to know and understand the terms and conditions of these offers because there are always “conditions”.
Let’s look at the actual cost of this convenience compared to a traditional sale. First lets set the record straight with the Opendoor comparison in the table below. Opendoor uses national averages which include high priced markets in California, Arizona, Florida and other regions. You should know that all real estate is local. Since we are the local real estate experts in the Charlotte area, we will deal strictly with actual Open Door homes for sale in Charlotte NC which you will see in the revised second table below. But before we do that, let’s look at Opendoor’s comparison as shown on their website:
Opendoor Comparison to Traditional Offer
In Opendoor’s example above, they charge a “seller fee” (i.e. “commission”) of 7.3%. On their website, they also note that it could be even higher. By comparison, a customary commission in a traditional listing is usually around 5% to 6%. But wait! Opendoor then adds inflated allowances on the Traditional Offer side for Staging and home prep costs, Seller concessions and Homeownership and overlap costs. We will address each of these allowances below.
Let’s address Opendoor’s inflated 2% Seller concessions allowance that was added on the side of the Traditional listing. We pulled actual sales data in Charlotte for the last 90 days (as of 10/30/19) that includes 4,377 sales transactions. Of these sales, less than half (43%) included any seller concessions at all. The transactions that did have seller concessions was found to average only 1/2%, not the 2% that Opendoor shows in their comparison. Remember, we’re using actual Charlotte home sales in comparison to Opendoor’s national “estimates”.
Opendoor also adds a 1% allowance under the Traditional sale for “Homeownership and Overlap Costs”. This assumes that a seller will carry two mortgages which doesn’t often occur. However, we have entered into an exclusive partnership that eliminates this cost for our sellers for up to three months. So let’s scratch that 1% expense as well.
Now that we have removed the Opendoor “fluff” and used the actual Charlotte sales data instead of their estimates, the reality is that Opendoor’s Net Proceeds to Seller changes from a $3,400 advantage over the Traditional offer in their example above, to a $13,536 disadvantage to a Traditional offer in our example below:
Revised Comparison - Opendoor vs. Traditional
| Traditional Offer | Opendoor Offer | |
|---|---|---|
| Offer price (1) | $212,766 | $200,000 |
| Seller fees | $11,702 (5.5%) | $14,600 (7.3%) |
| Staging and home prep costs (2) | $1,064 (0.5%) | No prep |
| Seller concessions (3) | $1,064 (0.5%) | No concessions |
| Repair costs | Depends on assessment | Depends on assessment |
| Homeownership overlap costs (4) | $ -0- | Choose your close date |
| Closing costs | $2,128 (1%) | $2,128 (1%) |
| Total costs | $15,958 (7.5%) | $16,728 (8.4%) |
| Net Proceeds | $196,808 | $183,272 |
1Actual Charlotte home sales data shows that homeowners have undersold their homes to Opendoor by an average of 6% (see table below). The traditional offer price above reflects this additional 6% in offer price over what a typical seller receives from Opendoor. It is also shown below in the table of published listing prices of Opendoor homes for sale in Charlotte NC.
2Local market experience has shown that a typical home seller will spend approximately $1,000 for home prep. For the purpose of this example, we are using ½% as opposed to the 1% used in Opendoor’s national example.
3Actual market data consisting of 4,377 transactions in Charlotte shows an average seller concession of ½%, as opposed to Opendoor’s 1% used in their national data example.
4We leverage a strategic partnership which eliminates this cost for up to three months.
Here are the Truths About Selling to Opendoor in Charlotte NC
Now let’s go a step further by using actual 6-month sales data including Open Door homes for sale in Charlotte, dating back to April 2019 obtained from the Charlotte Regional Realtor Association. See the table of Open Door homes for sale in Charlotte NC below. It will show how much Opendoor actually purchased homes for (Column A), and subsequently at what prices they listed them back on the market for (Column B). You’ll see that homeowners undersold their homes to Opendoor by an average of $12,568 (Column C) or 6% (Column D).
Open Door Homes for Sale in Charlotte NC
| Address | City | (A) Opendoor Purchase Price | (B) Opendoor List Price | (C) Seller Undersold Amount | (D) Seller Undersold % | Subdivision |
|---|---|---|---|---|---|---|
| 2823 Azalea Hills Drive | Charlotte | $230,000 | $255,000 | ($25,000) | -10% | Arbor Hills |
| 2526 Cochrane Drive | Charlotte | $170,000 | $195,000 | ($25,000) | -13% | Meadow Hill |
| 6155 Fazenda Drive | Charlotte | $185,500 | $210,000 | ($24,500) | -12% | Alexander Heights |
| 9022 Arbor Creek Drive | Charlotte | $225,500 | $250,000 | ($24,500) | -10% | Arbor Creek |
| 10310 Moores Chapel Road | Charlotte | $164,500 | $188,000 | ($23,500) | -13% | Belmeade Green |
| 4707 Belle Plaine Drive | Charlotte | $139,500 | $161,000 | ($21,500) | -13% | Hope Valley |
| 2538 Stream Bank Drive | Charlotte | $193,500 | $215,000 | ($21,500) | -10% | Meadowhill |
| 5028 Rolling Oak Lane | Charlotte | $157,000 | $177,000 | ($20,000) | -11% | Rolling Oaks |
| 9909 Laurel Lake Lane | Charlotte | $310,500 | $330,000 | ($19,500) | -6% | White Oak |
| 8715 Earthenware Drive | Charlotte | $181,500 | $200,000 | ($18,500) | -9% | Potters Glen |
| 4011 Kalispell Lane | Charlotte | $357,500 | $375,000 | ($17,500) | -5% | Dominion Bridge |
| 6312 Woodthrush Drive | Charlotte | $142,500 | $160,000 | ($17,500) | -11% | Hickory Ridge |
| 6904 Passeres Court | Charlotte | $203,000 | $220,000 | ($17,000) | -8% | Bradfield Farms |
| 10506 Four Mile Creek Road | Charlotte | $233,000 | $250,000 | ($17,000) | -7% | Raintree |
| 8824 Castlebay Drive | Charlotte | $283,500 | $300,000 | ($16,500) | -6% | Landen Meadows |
| 12618 Provincetowne Drive | Charlotte | $381,500 | $398,000 | ($16,500) | -4% | Reavencrest |
| 11005 Spice Hollow Court | Charlotte | $294,500 | $310,000 | ($15,500) | -5% | Thornhill |
| 9106 Nathaniel Russell Lane | Charlotte | $132,000 | $147,000 | ($15,000) | -10% | Ivystone |
| 8800 Royal Scot Lane | Charlotte | $170,500 | $185,000 | ($14,500) | -8% | Braewick |
| 9316 Quilting Bee Lane | Charlotte | $241,000 | $255,000 | ($14,000) | -5% | Davis Meadows |
| 5922 Sullins Road | Charlotte | $166,000 | $180,000 | ($14,000) | -8% | Forest Pawtuckett |
| 9326 Royal Highlands Court | Charlotte | $276,000 | $290,000 | ($14,000) | -5% | Southampton |
| 9823 Eagle Feathers Drive | Charlotte | $198,500 | $212,000 | ($13,500) | -6% | Catawba River Plantation |
| 1801 Swan Drive | Charlotte | $241,500 | $255,000 | ($13,500) | -5% | Lawing Pond |
| 16629 Broadwing Place | Charlotte | $257,000 | $270,000 | ($13,000) | -5% | Falcon Ridge |
| 6510 Wild Orchid Court | Charlotte | $224,000 | $237,000 | ($13,000) | -5% | Forest Pond |
| 8028 Holly Hill Road | Charlotte | $176,000 | $189,000 | ($13,000) | -7% | Holly Hills |
| 3325 Aldwych Way | Charlotte | $239,000 | $252,000 | ($13,000) | -5% | Weston Woods |
| 4309 Dunwoody Drive | Charlotte | $184,500 | $197,000 | ($12,500) | -6% | Cobblestone |
| 3331 Ringtail Lane | Charlotte | $264,500 | $277,000 | ($12,500) | -5% | Lawing Pond |
| 5005 Prosperity Ridge Road | Charlotte | $222,500 | $235,000 | ($12,500) | -5% | Prosperity Ridge |
| 11309 Gandolfo Court | Charlotte | $268,000 | $280,000 | ($12,000) | -4% | Creekside at Wyndham Place |
| 6105 Cambellton Drive | Charlotte | $281,000 | $293,000 | ($12,000) | -4% | Highland Creek |
| 9705 Pecota Lane | Charlotte | $188,000 | $200,000 | ($12,000) | -6% | Preston Village |
| 8608 Mulberry Grove Road | Charlotte | $213,500 | $225,000 | ($11,500) | -5% | Olde Savannah |
| 7809 Ambleside Drive | Charlotte | $215,500 | $227,000 | ($11,500) | -5% | Wedgewood |
| 6117 Fazenda Drive | Charlotte | $174,000 | $185,000 | ($11,000) | -6% | Alexander Heights |
| 5033 Silabert Avenue | Charlotte | $241,000 | $252,000 | ($11,000) | -4% | Anthem |
| 4133 Davis Meadows Drive | Charlotte | $224,500 | $235,000 | ($10,500) | -4% | Davis Meadows |
| 1422 Mcilroy Road | Charlotte | $267,500 | $278,000 | ($10,500) | -4% | East Forest |
| 12917 Tahoe Drive | Charlotte | $249,500 | $260,000 | ($10,500) | -4% | Hamilton Lakes |
| 5913 Hamilton Oaks Drive | Charlotte | $129,500 | $140,000 | ($10,500) | -8% | Hamilton Oaks |
| 14311 Tapestry Woods Court | Charlotte | $221,500 | $232,000 | ($10,500) | -5% | Williams Glenn |
| 5207 Hawkins Meadow Court | Charlotte | $255,000 | $265,000 | ($10,000) | -4% | Caldwell Commons |
| 1100 Rock Point Road | Charlotte | $250,000 | $260,000 | ($10,000) | -4% | Sardis Oaks |
| 10306 Moores Chapel Road | Charlotte | $165,500 | $175,000 | ($9,500) | -5% | Belmeade Green |
| 2522 Purser Drive | Charlotte | $191,000 | $200,000 | ($9,000) | -5% | Milton Park |
| 13019 Red Vulcan Court | Charlotte | $239,000 | $248,000 | ($9,000) | -4% | Old Stone Crossing |
| 13721 Elsie Caldwell Lane | Charlotte | $243,500 | $252,000 | ($8,500) | -3% | Caldwell Commons |
| 6638 Bluegill Road | Charlotte | $286,500 | $295,000 | ($8,500) | -3% | Lawing Pond |
| 9225 Merlot Lane | Charlotte | $211,500 | $220,000 | ($8,500) | -4% | The Vineyards |
| 9839 Hanberry Boulevard | Charlotte | $223,500 | $232,000 | ($8,500) | -4% | Villages At Back Creek |
| 9219 Lake Spring Avenue | Charlotte | $256,500 | $265,000 | ($8,500) | -3% | Wedgewood North |
| 2328 Harwood Hills Lane | Charlotte | $232,000 | $240,000 | ($8,000) | -3% | Harwood Landing |
| 12302 Overcup Lane | Charlotte | $267,000 | $275,000 | ($8,000) | -3% | Hunters Ridge |
| 9912 Rocky Ford Club Road | Charlotte | $271,000 | $279,000 | ($8,000) | -3% | Prosperity Ridge |
| 14717 Beckenham Drive | Charlotte | $158,000 | $165,000 | ($7,000) | -4% | Arlington Forest |
| 6822 Flat Creek Drive | Charlotte | $275,000 | $282,000 | ($7,000) | -2% | Southpointe |
| 16740 Prairie Falcon Lane | Charlotte | $248,500 | $255,000 | ($6,500) | -3% | Falcon Ridge |
| 2407 Oldenburg Drive | Charlotte | $306,000 | $312,000 | ($6,000) | -2% | Brandon Forest |
| 404 Erin Taylor Lane | Charlotte | $194,500 | $200,000 | ($5,500) | -3% | Alexander Park |
| 5615 Fairvista Drive | Charlotte | $334,500 | $340,000 | ($5,500) | -2% | Highland Creek |
| 10610 Pointer Ridge Drive | Charlotte | $225,000 | $230,000 | ($5,000) | -2% | Catawba River Plantation |
| 1921 Starbrook Drive | Charlotte | $265,000 | $270,000 | ($5,000) | -2% | Starmount |
| 5928 Downfield Wood Drive | Charlotte | $246,500 | $250,000 | ($3,500) | -1% | Highland Creek |
| 8708 Sedgeburn Drive | Charlotte | $273,000 | $275,000 | ($2,000) | -1% | Berewick |
| AVERAGES | $229,356 | $241,924 | ($12,568) | -6% |
The table of Open Door homes for sale in Charlotte highlights actual data in the market. So the question remains: Is convenience worth $12,568?
When it comes to these “instant cash offers”, all that glitters is not gold! If it sounds too good to be true…well, you know the rest. Know the truths about selling to Opendoor in Charlotte NC. Do your research and consult an experienced and trusted real estate professional to know all the facts. Know the true value of your home and don’t be undersold! If you’re considering selling, evaluate whether convenience is really worth leaving thousands of dollars on the table!
SPREAD THE LOVE AND SHARE with the social icons below if you think this information can be helpful to others!
REQUEST A FREE CMA (COMPARATIVE MARKET ANALYSIS) TODAY!
Are You Looking for a New Home in the Charlotte Area?
We can help you find the perfect home, no matter what you’re looking for. Our dedicated real estate team can keep an eye out for homes featuring things not usually listed in data bases and keep you informed, if you contact us and let us know what to look out for. Give us a call at 704-608-2794 or get in touch with us online to let us know what you’re looking for. We’ll help you find it!
If you’d like access to our exclusive real estate reports and worksheets for FREE, just fill out our simple, online, information request form.
In the meantime, please check out our:
- North Charlotte homes for sale
- South Charlotte homes for sale
- Uptown Charlotte homes for sale
- Homes for active adults in 55+ communities
- Charlotte area Luxury homes for sale
- Charlotte area New Construction homes for sale
Looking outside the city? Check out:
- Ballantyne homes for sale
- Harrisburg homes for sale
- Steele Creek and Lake Wylie homes for sale
- Concord homes for sale
- Mint Hill homes for sale
- Waxhaw homes for sale
- Weddington homes for sale
- Matthews homes for sale
- Huntersville homes for sale
- Union County homes for sale
Want help with home staging or home improvement ideas? Just ask or follow our blog! We also offer FREE real estate advice guides. For example, one guide points out nine common mistakes to avoid if you’re buying a new home. Another warns sellers about 14 common mistakes homeowners make when selling their homes.
Leave a Reply