Why Is Open Door Is Misleading You About The Real Estate Market And Your Home’s Value?
Open Door is a house flipping company that buys homes at a low price and then re-sells the homes at a higher price. I think it’s great that consumers have more choices today when it comes to selling their homes.
It’s great as long as consumers are informed and not being misled about the real estate market and the true expected sales price of your home. What I’ve found when testing an offer for my own properties is the offers were very low. Because I’m working in the real estate business I know their offers are low. My fear is Open Door is preying on people who are less financially savvy and the people who can afford to lose money the least.
Because I previously requested an offer, yesterday I received this email from Open Door saying the Austin real estate market got 7.9% cooler. In what alternate universe is the Austin real estate market 7.9% cooler? Take a look at the most recent statistics from Austin Title. My home is located in MLS area CLS and the statistics show in reality the market is 8.64% BETTER!
In my opinion what’s happening is Open Door is sending out these emails indicating the market is becoming better for buyers hoping homeowners like you will be more likely to accept a low-ball offer from them. If you believe their email you are more likely to give Open Door the equity in your home rather than taking the chance of selling your home on the open market for significantly more money.
In my situation I requested an offer on our homes. Of the offers I received, even after considering real estate commissions and other fees, the offer would have netted me $27,000 less than selling on the market. Open Door will tell you they are essentially paying market value minus their fee. Of course, what they said the market value of my home was $27,000 under the true market value of my home. If you’re like me and you put away your money for a rainy day that’s a lot of money! Whenever I think about money, I calculate how much it is worth in 20 years with a reasonable 8% rate of return. In 20 years $27,000 invested at 8% would give me an estimated $125,845!!!
Many people don’t follow the real estate market carefully and are not financially sophisticated. Unfortunately, I wasn’t in contact with a woman raising 2 girls in our neighborhood who just sold her home to Open Door. Her home was similar to the home where I received the low-ball offer $27,000 below market value. I imagine that $27,000 tax free would be at least the equivalent of half her income for the year. Long term $125,845 might pay for a college education for one of her girls.
The real estate market is strong. All she had to do was call us and show her home a few times and she could have had a life changing amount of money. Selling your home is easier than working for 6 months and in 20 years you won’t remember selling your home but I bet the extra $125,845 will come in handy.
In today’s market there is no reason for someone to accept a low-ball offer. We have investors lined up who are willing to pay full price for a home and can close in as little as 2 weeks. These investors are also willing to let you rent the home back for a period of time which will make your move easier. If you are considering accepting an offer from Open Door or have any friends who are considering an offer contact us today to get a no obligation realistic estimate of what your home can sell for in today’s market.