There has been a lot of discussion around our office lately about Purple Bricks, Offer Pad, Open Door, 72-Sold, etc. In order to give this article its proper due, the writer must disclose this is my opinion, and unless I use actual statistics, it’s still just my opinion.
Let’s first start out by defining what these companies do. They make huge promises in their commercials of “no commissions” and “stay in your home for X months”, and “Make even more money”, etc. Often they are an automated service with phone representatives which may or may not even live in the United States. Some of these companies will “buy your home” sight unseen, and often you will never come in contact with a human.
Open Door, in particular, will make you a cash offer on your home. The initial offer is contingent on fees and repair costs. Often, the company will have your property relisted before it even closes escrow, and they will delay close until they find a buyer for more money than they purchased your house for initially. They don’t disclose this tactic in their contracts openly. This often leaves the seller waiting and delaying close of escrow, but not knowing why. Open Door also is supposed to go into the home and do repairs, but many times they do not, although they negotiate the price based on intended repairs. In my area the homes are typically in terrible shape, dirty, and no repairs have been performed. Also, in 2021, the company reported a net loss of $662 million up from the previous year’s $253 million loss. This is not a good business strategy. It does, however, speak to why Open Door is not doing any repairs on homes and trying to back-channel the deals without the seller even knowing.
This strategy is much the same throughout all the companies. A seller must also take in mind that anyone can walk up to your home, give a fake email and name to the operator, and gain access to the home. You certainly would not want to use any of these services if your home is not vacant…and be sure your homeowner’s insurance will cover losses if you list your house with these “virtual” companies.
Let’s not forget either that these services know nothing about your home, will never visit your home, and could care less about your situation. One article on Reddit was fascinating to read regarding Open Door’s lack of responsibility when closing escrow. https://www.reddit.com/r/RealEstate/comments/pdz871/opendoor_sucks/
The home buyers signed all their closing docs and the Open Door representative never showed up to sign. Days later the buyers found out the home still had not closed escrow legally, yet they were living in the house already. They called Open Door and the response was ” they are overloaded with closings and can’t give us any date when they might get to us!” Many comments followed, but few were correct. Their agent advised them correctly that they should not be in the home until it legally closes escrow, and the property records in their name. Until then, they are illegally trespassing in someone else’s property, and anything could happen. I.E. Fire, pipe bursting/Flood, etc. Who then is responsible and who is going to pay for the damage? Not to mention that Open Door could actually file a lawsuit against the buyers and their agent for allowing them access even though the Open Door representative told the agent to take the keys out of the lockbox and “toss it” because Open Door didn’t need it anymore.
Is this the kind of service you deserve?
The answer is no. I have clients who continually use my services in light of all this new proptech BS. Why, because I’m worth every penny.
I actually work for my clients. I find them homes they love, and negotiate better deals on both ends, and I get them what they want. I do all this while building relationship and trust. Now…I can’t do everything! I don’t read your contract to you line by line for 12 hours, but I do tell you to read it. I also answer all questions up front and have clients sign documents in places where signatures are not normally required…why? Because you need to know what’s going on. And if you don’t know, or don’t want to know, then you have only yourself to blame. And that’s where these companies are capitalizing. They’re selling you a pipe-dream. Good agents can help you make money on your investments, and their wisdom is priceless when looking for deals. I have made my clients billions of dollars collectively with their investments. It’s a win-win scenario. Love your Realtor, they work hard for you in many ways that are intangible and priceless. And every time you call them all worried and stressed out, they take that to bed with them every night also.
Don’t shortchange your agent, help them help you and forget these short-change companies who are preying on your lack of knowledge.
© Matt White - REALTOR® |