Do Opendoor Properties Influence Market Value?

[KYLECODY]

So they are good to use as comparable sales? Trying to understand how they work or if there are some hidden fees I would need to adjust for. I didn't use the two for my Subject because they seemed to sell higher for no reason.

I use them all the time. No hidden fees/concessions to adjust for. Only you can decide if the two you didn't use were atypical sales. If they were abnormally low or high throw them out, otherwise they are fine. Listed on the open market, exposed, selling to typical buyers.

 

[Carnivore]

A nice clean vacant house versus a "lived in" perhaps smelly or cluttered house?

Actually your statement is pretty darn good one and is consistent with Realtor Lady thinking. They always recommend to owners to un-clutter the house. paint walls neutral colors, get rid of loud wall paper, remove unneeded furniture, keep the lawn cut, install a nice mailbox with flowers planted around it, make minor repairs .. ...etc etc

The mailbox thing is a biggie ...its the first impression that sets the tone - per many agents I have spoke with

 

[CindyR]

well i was thinking about this OD stuff so i did some more research. they really are gaining popularity here. i've probably appraised a half dozen of them already this year and these days there is always at least one OD comp in each appraisal.

So of those 940 homes they currently own, 245 were purchased in the past month. Prices ranged from $104K to $480K with an average right around $250K. And i also checked the County Recorded data and see about 425 warranty deeds recorded in the past month. so if 245 were purchases that suggests 180 were sold properties.

and if you do the math that looks like $4.9 M in those 8% fees charged to those sellers in the past month. Can that be right? Wow.

 

[TRESinc]

had never heard of them so i googled it. now i know why i have never heard of them....

 

[Andrei Fin]

Opendoor's claims of saving the seller money are puffed up. They figure a 6% broker commission, when most sellers can get 5%. They figure a 2% concession is a "standard cost". Then they do a home inspection and deduct the cost of repairs. This last point is maybe why these homes sell for slightly more (and also perhaps where the company makes its profit) since it's almost like "certified pre-owned".

 

[KYLECODY]

Opendoor's claims of saving the seller money are puffed up. They figure a 6% broker commission, when most sellers can get 5%. They figure a 2% concession is a "standard cost". Then they do a home inspection and deduct the cost of repairs. This last point is maybe why these homes sell for slightly more (and also perhaps where the company makes its profit) since it's almost like "certified pre-owned".

They make their money off the now 8% they deduct in fees from their offer. Than they make more on the markup after the fact. Its a great deal for them and I see the appeal to most non experienced sellers that are willing to take a little less to avoid the cleanup, listing, showings, inspections, appraisals, etc.

They currently own right at 940 in the Phoenix metro area. Bought 20 on Friday, 10 on Thursday and its a revolving door. Wish I could buy their stock, but they are still private I believe.

 

[Mike Kennedy]

How Opendoor calculates the value of your home

How Opendoor calculates the value of your home - Opendoor Guides

We don't just estimate your home value, we make a competitive, all-cash offer. Learn about our robust valuation model and local pricing experts.

www.opendoor.com

p.s. caveat, this Poster did a quick online search - and has had no relationship or interaction with the Company in question. Posted for info only relative to Home Values - only.

 

[glenn walker]

Yesterday I was looking at 8 near matches for potential comps in the sales grid. 6 were in the $225k-$230k range. The other 2 were around $240 with nothing standing out about them other than they were owned by Opendoor. In contrast, there were 2 other active Opendoor homes which were right in range but were still pending. I decided to look in other markets to see how other Opendoor properties fair and most (not all) were selling slightly above the average... maybe $5000 here, $8000 there.

Anybody else seeing this influencing trend in their markets and are you using Opendoor properties as comps?

Of course but so what , so did Zillow, red-fin, google and all sorts of new marketing platforms , the days of the 6% MLS listing may be disappearing as fast as the days of appraisers doing 1004's who are concerened about nickels and dimes. First we do not decide what is a comp based on marketing , in a tight range like you are talking about your talking about less than 7% from bottom to top. I deal in an-area where the medium price is $500,000 plus and we don't even think in those kind of terms - BUT -Open door homes are often turn key and ready to move into , also many are vacant where a buyer can move in and does not have to coordinate, with sellers moving out !! But no matter what, the days of everything being marketed or sold traditionally are changing . As both an-appraiser and broker, I see it this all the time -So basically do not form marketing bias's- Let the comparable's drive your final OMV-- Finally in your case a few sale's at $240,000 when the others were in the $225K to $230K range is probably one of the best ranges an-appraiser could pray for-- So no offense but why are you are pounding your head on the concrete ? When in reality you have a very tight range. Finally look at your market trend, is your market slowly increasing and your simply way behind the curve ? God I wish I had such easy assignments , but you definitely have a bracketed range and basd on your post , your reconciliation should easily be supported at the $230,000 to $238,000 range . LOL )

 

[Joe Flacco]

I would love to see their numbers. Average 8% fee - 3% for buyer agent - costs = not that much for the risk of holding the property.

The end of buyer broker commission rule would be a big boost to this model.

 

[Tim The Enchanter]

So of those 940 homes they currently own, 245 were purchased in the past month.

They are busy!
They are not here. A couple (few?) years ago I was seeing lots of homes bought by Invitation Homes, but have not seen them as a buyer or seller in quite some time.