Opendoor & Offerpad; What's Their Angle?
Rental Property Investor · Chandler, AZ · Member since 2011 · 145 posts · 79 votes
Opendoor & Offerpad; What's Their Angle?
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Robert AdamsBusiness Member
Real Estate Broker · Henderson, NV · Member since 2009 · 1k+ posts · 373 votesThey are in Las Vegas and Henderson now as well. My experience with them on the buyer side is over worded contracts but pretty smooth transaction and listed slightly above recent comps which is typical for our market. On the sellers side..............I wouldn't recommend it.
Here is how it works:
Over the past 7 years the Vegas Valley has seen enormous growth in the housing market and home values. Many people have no idea what their home is worth. Some homeowners even rely on outdated autovaluations like Zillow's Zestimates for home values. Then opendoor or similar company gets in touch with a homewoner (because they are spend an insane amount of money on marketing to reach sellers that are not in tune with the market). FOR EXAMPLE: The homeowner maybe bought their home in 2011 for $200k for the sake of round numbers. Now lets fast forward to 2018 and the home is now worth $400k. The seller looks on websites like Zillow and sees there home is worth $380k. This seller is already underselling themselves by $20k, but wait it gets worse. Then opendoor comes along and says we think your home is worth $370k to $380k BUT we will buy it right now from you without you having to market the home or do any showings etc for $375k but we are going to charge you a fee up to 12% (in our example this would equate to $45,000). Then on top of that they charge a 7% Commission (that would equate to additional $26,250). Then opendoor would clean the home, maybe paint it, maybe put new carpet if you are lucky then resell your home for $400k in a week or two. Below I have compared 2 examples of selling traditionally with a Realtor at 6% commisions (which it may be less as it is negotiable) vs selling with opendoor or similar service.
Comparing Opendoor to a Traditional Sale with a Realtor
$400,000 Home via OpendoorHome Value: $400,000Sales Price: $375,000 Charge 12%: $45,000 Commissions 7%: $26,250 Total Costs via Opendoor: $71,250 Net Proceeds to Owner: $303,750 | $400,000 Home via a RealtorHome Value: $400,000Sales Price: $400,000 Traditional Closing Costs 3%: $12,000 Commissions 6%: $24,000 Total Costs via a Realtor: $36,000 Net Proceeds to Owner: $364,000 |
In this Example Selling with a Realtor will save you $60,250!!!
Most homeowners I know could use an extra $60,000+ in their pocket! It is my firm belief that homeowners do not know how drastically their bottomline is affected by selling with these unethical companies.
BEFORE YOU SELL WITH ANY COMPANY ASK THEM "HOW MUCH MONEY WILL I WALK AWAY WITH?"AND THEN COMPARE THAT TO A TRADITIONAL REALTOR SALE.
I confronted them on a public post of Opendoor on Facebook, you can see for yourself how it went below
(after my question about them charging 19% they stopped responding):
HERE IS THE ORIGINAL POST
The Adams Team at Rothwell Gornt Companies4.970 Reviews
154 Replies
- Nashville TN · Member since 2018 · 4 posts · 2 votes7y
We’re in Nashville, and from a potential buyer’s perspective of someone that understands the market, opendoor is sweet. Me and the wife are ‘halfway’ looking for a house, but being able to drive around and see houses without bothering an agent with houses we aren’t going to buy is SWEET. it’s nice being able to see what $X will buy in Y neighborhood in person at our own leisure. I’m curious about pricing strategies for sellers, and the legitimacy of the high commissions and fees. If they are as slim a margin as it seems that they are business model, then I dig it.
- Realtor · Las Vegas, NV · Member since 2018 · 218 posts · 147 votes7y
What would be so sweet about looking at overpriced homes? Obviously open-door lists their homes over market value to try to maximize their profits..
- Investor · Frisco, TX · Member since 2015 · 84 posts · 52 votes7y
Originally posted by @Brandon Carriere:
What would be so sweet about looking at overpriced homes? Obviously open-door lists their homes over market value to try to maximize their profits..
Why do you say that Open Door "over prices" home? From what I have seen, they seem to be at or below market.
- Investor · Chicago, IL · Member since 2009 · 1k+ posts · 1k+ votes7y
What they do well is their analytics. This almost puts them into the category of "real estate tech" companies, even though the commercials and mailers are low tech.
An example of their analytics is they mail out based on research data about the owner. They target markets that have appreciation and homogeneous housing stock. Vegas and Phoenix are two such markets.
Some have mused that this type of company can be an important part of the overall sales process in the future. I think they will remain a niche.
These companies are somewhat different than firms like "We buy ugly homes" who buy distressed properties.
These two companies are buying more quality real estate and closer to "market value." They can't afford to make too many mistakes because their margins are slim.
The question to sellers is "Will I be better off if I use a realtor?" And the answer is yes, but they are not leaving too much on the table. They take a slight discount and they get a quick and easy buyer.
- Real Estate Agent · Phoenix, AZ · Member since 2012 · 640 posts · 457 votes7y
I couldn't figure out how Opendoor made money, because the spread between what they paid and what they sell properties for is often very narrow. They have a ton of support staff and overhead as well. I'm actually representing the buyers on an Opendoor escrow right now and it's been less than easy to reach them via phone or email. You realize how crucial it is to be able to text/call/email a real agent day or night and weekends when trying to get a transaction closed.
I checked out their website and realized Opendoor makes money on fees, plain and simple. The average "service charge" to sell to them is 7%, but can range from 6% all the way up to 13%. If you accept their offer, they then schedule a "free home assessment" (read INSPECTION) to determine if repairs are needed. They make it easy on the seller by doing the work "post close", but they'll deduct the cost of the repairs from the purchase proceeds (All of this is disclosed right on their website) I've heard through the grapevine that they're very pushy with repairs and try to extract the most they can from the sellers.
So you're getting a generally below market offer price, paying at least 6-7% in transaction fees, and then also paying for repairs....tell me again how this is better for the seller than a traditional open market sales approach?
- Las Vegas, NV · Member since 2018 · 403 posts · 474 votes7y
They might make what sounds like a good offer, then after they get you in contract, they hit you with the “repair adjustments”. They also charge 8-9% sales fees.
But sure, they will buy your house fast.
- Las Vegas, NV · Member since 2018 · 403 posts · 474 votes7y
@John McCool
So you’re paying them 9.5% vs 6% to a realtor? Have they hit you with their “repair adjustment” number yet? Even if they don’t cut your numbers with the repair credit, you’re still paying them over 50% more than a “common” realtor commission.
- 7yColleen F.Pro MemberInvestor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
@Ryan Swan @Casey Powers I am having trouble understanding how the repair adjustment is any different from a buyers/realtors post inspection attempt to negotiate down the price which is happening a lot these days. Seems to me like you can walk away from either. And with a MLS offer you can burn 2 weeks on that post inspection attempt at negotiation while you show up on the MLS as for sale which to me is seem worse then opendoor which I assume is less public.
- 7yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @Casey Powers:
@John McCool
So you’re paying them 9.5% vs 6% to a realtor? Have they hit you with their “repair adjustment” number yet? Even if they don’t cut your numbers with the repair credit, you’re still paying them over 50% more than a “common” realtor commission.
to me they are just buying listings. although sure takes a boat load of capital to have to close on all of these then resell.. cost of capital will cut into thier margins.. along with tax's insurance utls.. especially if they play in Texas or other sky high property tax states.
- Las Vegas, NV · Member since 2018 · 403 posts · 474 votes7y
Originally posted by @Colleen F.:
@Ryan Swan @Casey Powers I am having trouble understanding how the repair adjustment is any different from a buyers/realtors post inspection attempt to negotiate down the price which is happening a lot these days. Seems to me like you can walk away from either. And with a MLS offer you can burn 2 weeks on that post inspection attempt at negotiation while you show up on the MLS as for sale which to me is seem worse then opendoor which I assume is less public.
So it's better to pay Opendoor over 50% more than you'd pay a realtor? Would you pay a realtor that much to have it "private"?
- Real Estate Agent · Phoenix, AZ · Member since 2012 · 640 posts · 457 votes7y
@Colleen F. it's similar but also fundamentally different in several ways:
1) OpenDoor is already charging a higher fee just for "privilege" to sell TO them
2) OpenDoor's offer prices are usually lower than market prices
3) It can be confusing to both consumers and agents, because OpenDoor is operating similar to a wholesaler in that they claim to close quickly, with cash, and make the sale process easier on the seller. The key difference being wholesalers buy properties AS-IS and don're quire the sellers to make any repairs.
4) They are buying as a for profit enterprise, and thus have a vested interest to buy at the lowest sales price, to charge the highest fees, and to have the seller make as many repairs as possible. OpenDoor wins when it's a zero sum game transaction. Contrast this to a typical residential resale transaction in which all parties (agents, buyers, sellers) are working towards a more equitable arrangement.
The one part I do agree with you is that the OpenDoor transaction may be "less public". The seller could always explore an offer from them before electing to list on the MLS and begin accruing days on market.
- Las Vegas, NV · Member since 2018 · 403 posts · 474 votes7y
Right, although the details of the transaction aren't public in a realtor listing either. Once it's in contract, no one knows what's going on with it, same as with an Opendoor transaction.
Also from my understanding, Opendoor isn't negotiating the "repair adjustment", but just dictating how much more they're going to discount the price based on repairs they decide are needed. Contrast that with a traditional sale, where the repair request is always a negotiation.
Once the home is sold, the sales price is public record no matter how it was sold, so it's still not going to be "private". And selling cheap to companies like this, affects comps and helps drive down property values for everyone. You may not care now, but you will next time you want to sell, if this becomes too prevalent.
- 7yColleen F.Pro MemberInvestor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
@Casey Powers I am not reading 50 % more anywhere. I see people saying 7% for open door even though I believe you said 12% but in the end my question wasn't a price question. My question was why is it different regarding repairs. Repair credits eat up time on market with those "negotiations" in a traditional MLS sale. You as a relator receive commission on the OFFER price not the offer price minus repair credits so it is to your advantage to negotiate credits post offer even when the "defects" are known up front but that is another topic. My point is the house is tied up during that time resulting in more Days on Market. In my opinion that is a negative of MLS vs open door.
I also disagree on the public price, the public price on a sold home does not subtract credits at least not in my experience. Probably the same for open door. Just saying the sold price is not really transparent for either transaction. Who knows if you do better with repairs under either model that is not public information.
@Ryan Swan The ability to walk away is key in the repair for either open door or MLS it just takes longer for MLS. I agree higher prices for the transaction should be an issue that the seller evaluates and you do have a point that it is confusing to consumers who need to learn more each day about the buying process and for an infrequent purchase over many years. I think open door may have a place in the market, time will tell. It is just a more corporate wholesale like transaction for those who don't want to go through the relator process. Some people will pay more for that big company option rather then a wholesaler that calls them up. They want the house sold quickly and will pay for that privilege. I think if Open door doesn't deliver very quick close they will fail.
That said, I don't deal in a open door market or cookie cutter houses but it is important to me to understand the model and the difference from traditional MLS listings.
- Contractor · Magnolia, TX · Member since 2016 · 279 posts · 155 votes7y
Fair warning: I'm an Opendoor employee in Houston.
There is an absolute *ton* of misinformation in this thread, almost all of which is directly attributable to typical Realtor FUD (fear, uncertainty, and doubt - a common sales tactic). I'm at the tail end of lunch and don't have the time to craft a long-winded point-by-point response, but I will say this...
OD does not charge fee+commission+repair costs. We charge a fee comparable to a realtor's commission up-front, based on the information a seller provides about their home (and recent comps, trends etc.). We are constantly striving to lower these fees for our customers.
OD's repair cost asks are, again, comparable to what any buyer will ask for when their TREC inspection is completed. We shoot for "clean, safe and functional," when doing the assessment. We do not scope new flooring or paint or other finishes based on taste or cosmetics. We will happily buy and sell a home with funky colors if it's clean/safe/functional.
When sellers request an offer from us, we provide a side-by-side cost comparison based on using OD vs. traditional listing. Because our closing costs are lower than using a traditional listing, it is frequently less expensive to sell to OD than to list with a realtor, all else being equal.
Finally, sellers really need to question the claim that "Realtors have your best interests at heart, but OD is out to screw you." Studies have shown that realtors routinely hold out for more money when selling their own residence than they advise their clients to hold out for. Why? Because the commission structure (50% to seller agent, 50% to buyer agent - split 50/50 between broker and agent) means that a $10,000 bump in sales price for the seller only nets the agent $150. Why recommend against a lower offer when it delays the agent's payment and only adds a tiny bit to their bottom line? (See a write-up about it here: https://www.nytimes.com/2005/02/20/business/yourmoney/why-a-real-estate-agent-may-skip-the-extra-mile.html.)
That's all I've got time for now, but I'm happy to answer whatever questions you might have when I've got a little more time.
- Member since 2019 · 1 post · 0 votes7y
Hello Andrew Taylor, Thank you for your post. If you could answer these questions for me I would greatly appreciate it.
The Opendoor addendum uses the verbiage “due diligence period”. The contract uses “inspection period and resolution period” Is this time period the same? Or does due diligence give Opendoor more time to back out since it’s not due diligence isn’t specified in the purchase and sale agreement?
In contract OpenDoor indicates seller to pay Title insurance. Is this cost additional, out of pocket expense? Or is it reflected in the net to seller.
Does Opendoor require the contract to be contingent on Appraisal?
Does an OpenDoor Repersenitive come to house prior to home inspection and can tell seller the emailed offer is contingent on seller making particular repairs upfront? Or are no repairs discussed until after home inspection?
If seller representation is requested by seller does the fees that are collected from seller by Opendoor cover the sellers agents commission if a compensation agreement is included? The net to seller will not change...Correct?
If seller representation is not requested by seller Opendoor has rights to all commissions/fees...?
Thank you.
- Member since 2018 · 9 posts · 16 votes7y
@Casey Powers
Yes I paid 9.5% to OD. They however did buy my house as-is without me having to remodel my master bath and a few other items my realtor suggested I do before trying to sell. My realtor's initial pricing was 385k based on comps in my area. OD paid 372k, less the 9.5% and I paid zero in closing costs. Typically the seller has to kick in some closing costs, so I feel that would cover a good portion of the difference between the 6% commissions and the 9.5% OD fee.
I'm estimating 20k for a master bath remodel and completing a few other items that my house needed to be ready for retail. Hitting a target price of 385k would have cost me 20k, so more like a 365k sale through my realtor IF the house sold for list price.
The repairs came in at 2k, that was for water heater replacement and a few roofing issues they found. I had the option to repair the items myself, or deduct the 2k from cash due me at closing.
In my case the simplicity and what seemed to be a fair offer for my house as-is made the deal.
Also, I've already bumped out my closing date by 3 weeks as it took longer to find my next house than I thought it would. If I remember right they allow 60 days of closing date changes.
- Investor · Shakopee, MN · Member since 2014 · 219 posts · 88 votes7y
OpenDoor seems to solve a lot of issues that plague sellers.
1. Avoids long sales process.
2. More clarity about fees up front.
In selling, it's hard to get details on commissions from a realtor. It's a little game because many won't outline their best commissions and fees up front.
3. A clean-cut when selling. (no haggling over repair costs)
They will give you a repair estimate, and you can proceed or cut bait. With a traditional sale, you first need to update according to whichever realtor you go with.
Then you need to get an offer and choose to accept.
Then once you accept, you wait for inspection and need to then wait for buyer suggested improvements.
Then if you don't like it, you face another 14-60 days waiting for your next offer as you relist. People who have been interested in your home now wonder what's wrong with your house that it got re-listed and move on.
On the buyers side, the ability to look at homes without an agent and without an appointment is huge.
People these days don't want to engage with a lot of people, so enabling the buyer to help themselves is a great alternative.
- Las Vegas, NV · Member since 2018 · 403 posts · 474 votes7y
Originally posted by :
I am not reading 50 % more anywhere. I see people saying 7% for open door even though I believe you said 12% but in the end my question wasn't a price question. My question was why is it different regarding repairs. Repair credits eat up time on market with those "negotiations" in a traditional MLS sale. You as a relator receive commission on the OFFER price not the offer price minus repair credits so it is to your advantage to negotiate credits post offer even when the "defects" are known up front but that is another topic. My point is the house is tied up during that time resulting in more Days on Market. In my opinion that is a negative of MLS vs open door.
I also disagree on the public price, the public price on a sold home does not subtract credits at least not in my experience. Probably the same for open door. Just saying the sold price is not really transparent for either transaction. Who knows if you do better with repairs under either model that is not public information.
I've personally never seen a repair negotiation cause more than a few days delay at MOST. Usually mine were all done within the original contract time with no delay.
My point is that with a normal sale you CAN negotiate the repair number, vs with companies like Opendoor, to my understanding, you cannot. You either take whatever repair adjustment they say, or walk (which means you wasted your time).
The reported Opendoor fee was 9.5%, over 50% more than most realtors charge. That doesn't include the guaranteed adjustment for repairs, which you won't find out until you're in contract with them. Again, that repair credit won't be negotiable, unlike a normal deal.
Days on market really doesn't mean that much. What really matters is the time it took to go into contract. As long as you don't insist on listing it at too high a price, that won't be a problem. Who cares how many days it was on market once it's sold?
Bottom line, you will pay more for the "convenience" and perceived "privacy" of selling with Opendoor or its competitors, and in the end, there's really no more privacy either way.
- Las Vegas, NV · Member since 2018 · 403 posts · 474 votes7y
Originally posted by @Dan D.:
OpenDoor seems to solve a lot of issues that plague sellers.
1. Avoids long sales process.
2. More clarity about fees up front.
In selling, it's hard to get details on commissions from a realtor. It's a little game because many won't outline their best commissions and fees up front.
3. A clean-cut when selling. (no haggling over repair costs)
They will give you a repair estimate, and you can proceed or cut bait. With a traditional sale, you first need to update according to whichever realtor you go with.
Then you need to get an offer and choose to accept.
Then once you accept, you wait for inspection and need to then wait for buyer suggested improvements.
Then if you don't like it, you face another 14-60 days waiting for your next offer as you relist. People who have been interested in your home now wonder what's wrong with your house that it got re-listed and move on.
On the buyers side, the ability to look at homes without an agent and without an appointment is huge.
People these days don't want to engage with a lot of people, so enabling the buyer to help themselves is a great alternative.
In a traditional sale, sellers can negotiate the repair request. You NEVER have to just take it or leave it. Most get negotiated to something agreeable to both parties.
Vs with Opendoor, you only get to take it or leave it.
- Rental Property Investor · TN · Member since 2018 · 2k+ posts · 2k+ votes7y
@Casey Powers said
"Days on market really doesn't mean that much. What really matters is the time it took to go into contract. As long as you don't insist on listing it at too high a price, that won't be a problem. Who cares how many days it was on market once it's sold?"
Actually for many sellers what really matters is the number of days until you have cash in hand. That includes selling time and escrow, and possibly falling out of escrow and starting over again.
People using wholesellers, opendoor, offerpad types of services are not necessarily doing it for privacy or convenience. They may have lots of reasons.
I have sold a house to a wholeseller rather than update and flip it because I inherited it and was 2100 miles away and did not want to use a regular realtor as the house was broken into 4 times in a month and I just wanted it sold So, yes I did not max out what I could have gotten, but then again, I did not have to replace any more windows...again, evict a squatter, or replace wires or pipes either. It was well worth it to me. Speed was my main objective. And once the scum knew the owner had passed away they were on that house like flies on ****!
I think that some folks that work at home, have many kids, have severe health needs may not want to deal with people in their homes to view it.
Or people about to loose their home in foreclosure, people in a divorce, people moving to a new area without a new employee moving expense account may need to sell their home fast ad have the cash to move.
Maybe the house needs repairs such that it will not qualify for most loans and the seller does not want to deal with waiting for the 'right' buyer.
Maybe they have had bad situations with realtors in the past. I know a lady who had a realtor with a group -extended large family- visit her house and walk into the master bedroom when she just walked naked from the bath to the master bedroom. Opps the realtor did not call, just in the neighborhood. Worse yet, they left her bedroom door open, gawking as they went on to a different room. They all had a good look before the realtor could get around them to close the door. Well, she won't let a realtor have a key again. Lock box gone that day!
Or maybe they had buyers not qualify and their house fell out of escrow. Many reasons and issues, where one may not want to deal with a typical sell.
Its not just convenience, but a better option in some cases. Its just another tool in the tool box that one may wish to use in some circumstances.
- Investor · Shakopee, MN · Member since 2014 · 219 posts · 88 votes7y
Originally posted by @Casey Powers:
Originally posted by @Dan D.:
OpenDoor seems to solve a lot of issues that plague sellers.
1. Avoids long sales process.
2. More clarity about fees up front.
In selling, it's hard to get details on commissions from a realtor. It's a little game because many won't outline their best commissions and fees up front.
3. A clean-cut when selling. (no haggling over repair costs)
They will give you a repair estimate, and you can proceed or cut bait. With a traditional sale, you first need to update according to whichever realtor you go with.
Then you need to get an offer and choose to accept.
Then once you accept, you wait for inspection and need to then wait for buyer suggested improvements.
Then if you don't like it, you face another 14-60 days waiting for your next offer as you relist. People who have been interested in your home now wonder what's wrong with your house that it got re-listed and move on.
On the buyers side, the ability to look at homes without an agent and without an appointment is huge.
People these days don't want to engage with a lot of people, so enabling the buyer to help themselves is a great alternative.
In a traditional sale, sellers can negotiate the repair request. You NEVER have to just take it or leave it. Most get negotiated to something agreeable to both parties.
Vs with Opendoor, you only get to take it or leave it.
This is my understanding of the processes:
Open Door.
1. Contact them
2. Get price
3. Schedule inspection
4. Get repair estimate
5. Agree to list or not.
6. Sold once closing is set.
7. End of process
Approximate total time frame maybe 2 weeks?
With an agent:
1. Contact various agents
2. Show house to various agents
3. Get pricing estimates on what they would list for.
4. Try to nail down commission rates and decide on realtor
5. Sign with realtor
6. Deal with realtor improvements. Paint colors, cosmetic repairs.
7. Fix those items
8. Get photos taken to market your house
9. Listing posted
10. Possible open houses. (Leave your house for this and inconvenient showings)
11. Wait for offer
12. Review offer and accept
13. Wait for inspection. Review new asks for repairs based on inspection
14. Negotiate repairs for that buyer.
15. Agree to close. Wait for closing date.
If that process doesn't go well, go back to step 10-11. Each time that period is going to be about 2 weeks in a good scenario, but I could be wrong.
Steps 1-5 will take likely 2 weeks alone if you are interviewing multiple agents.
I don't know what the frequency is of deals falling out from offer being accepted until final inspection, (best I can find is a article stating nationally 3.9% of sales failed in 2016, up from 2.1% in 2015) but it's a considerable pain for any seller to have to reboot that process trying to appease a single fickle buyer. It also seems as a negotiating tactic that is becoming far more popular.
My other assumption is that OpenDoor's margins will likely only decrease as time goes forward if the market dictates the need is there. If they are getting enough listings at their current rate, they are providing value the market deems commensurate with their pricing.
- Las Vegas, NV · Member since 2018 · 403 posts · 474 votes7y
Agreed that the real appeal of a company like Opendoor is speed of sale, no showings, and really not much else. That convenience costs money. That was my point all along - the perceived convenience costs money.
It is interesting to see just how much more people are willing to pay for "convenience", while often trying to get a realtor's commission down to practically nothing, for said realtor doing clearly tons more work. - Rental Property Investor · TN · Member since 2018 · 2k+ posts · 2k+ votes7y
Originally posted by @Casey Powers:
Agreed that the real appeal of a company like Opendoor is speed of sale, no showings, and really not much else. That convenience costs money. That was my point all along - the perceived convenience costs money.
It is interesting to see just how much more people are willing to pay for "convenience", while often trying to get a realtor's commission down to practically nothing, for said realtor doing clearly tons more work.I think that people are willing to pay the amount that is like a commission as people understand that the 6 percent or so would be lost when they resell and these folks are not keeping, but reselling.
When I sold to a wholeseller I looked at their price comparing it to what I would have in hand with a regular commission based realtor and decided the few dollars difference was well worth it.
For commission I have listed property with realtors that have a sliding commission rate and it makes sense to me. Each one had a slightly different sliding scale but they all are something like:
7% full service: you leave the area (or stay), realtor arranges and oversees all things, from cleaning the house, any repairs, snow removal and lawn care, shutting off utilities, etc. all with your approval of service and cost, plus regular service below
6% regular service: list and show package, weekly communication with seller about feedback from potential buyers, weekly communication about how to make changes to improve the chances of a sale
6.5% same as regular service, but communication will be monthly, unless something unusual arises
5% same as regular service but communication will be infrequent and only if a change is needed or a contract is presented.
I liked it because you could see what level of effort was being given for the different costs.
- 7yColleen F.Pro MemberInvestor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
@Casey Powers that's right in a traditional sale I can negotiate repairs or walk away but in the days waiting for the inspection and then the days after where they try to negotiate the costs you eat up days on market. Days on market matter since I am holding the house during that time and I have costs associated with holding. It also burns up my time and so many requests are things that the buyer should have considered when they wrote their initial offer but locking up the house by the buyer is the goal of the initial offer. Every single relator I have dealt with wants you to credit repair costs because you are going to have to tell the next buyer if you walk away. That hurts the future sale, why is it on market that long? , why is it back on the market? To boot your house is tied up. You as a buyer's relator don't care about time to close, as a seller I do. I really see a lot of room for improvement in the status quo and a new model can push those changes. As for tons more work by the relator, some do more, some don't. Your point about price was understood from the beginning but really people would not be selling wholesale or to OD if the status quo worked for everyone. There is room for improvement in the relator model and maybe this one of the ways that happens.
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