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 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.
Opendoor Exclusives offers homes for 14 days before they are listed in an MLS, at lower prices than will be offered through the MLS listings, the company said. 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. But these houses are effectively FSBOs, or “for sale by owner” properties, since they are owned by Opendoor. Opendoor said the price in Exclusives is fixed and non-negotiable; presumably, any price for the house could be negotiable once it is listed on the MLS.
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 partly to reimburse consumers who sold to Opendoor.
This post has been updated to clarify the houses are FSBOs and would not be considered “pocket listings.”