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Offerpad vs Opendoor: The Answer May Surprise You

Offerpad vs Opendoor logo image.
In the Offerpad vs Opendoor debate, there is a clear a winner, and it may surprise you.

Offerpad vs Opendoor… who should you trust to by your house? Who will give you the highest cash offer and close the deal? The competition to buy your house is fierce. There are “We Buy Houses” companies popping up everywhere, in every market, making claims they will make you a fair cash offer with no fees, commissions or closing costs. But are they legit?

I happen to own a local “We Buy Houses” company and will do my best to give you an honest rundown. Many of these websites and “companies” are average Joe’s with very little real estate experience trying to get into wholesaling. All of the wholesaling online training and coaching says you should build a website to find motivated seller leads, which is why if you type in “We Buy Houses [city], [state]” you will see dozens (sometimes hundreds) of results pop up in Google.

Then there are big players, like Opendoor and Offerpad. There are many more too: We Buy Ugly Houses, 72Sold, Homelight, Clever Real Estate, etc). Even Zillow used to be an iBuyer before they went belly up in 2021 after over $1B in losses over a 4 year stretch of buying.

In this article, we’ll focus on two giants in the industry and compare them side by side. We look at features and benefits of both, cons, reviews and pick a clear winner at the end. Offerpad vs Opendoor. Let’s gooo!!!

What is Offerpad?

Offerpad was founded in 2015. This iBuyer will make you an all cash offer on your house within 24 hours and can close quickly with no fees, commissions or closing costs. They also hold brokerage licenses in several states and can help you get your house listed if that is a better option for you. In addition to home buying, Offerpad also sells and rents houses in specific markets. They can offer services such as cleaners, handymen and even have financing in some markets as well.

Offerpad has been paying cash for homes since 2015. Like many national homebuyers, they can be selective on what they buy.

Offerpad Process: How Does It Work?

Offerpad’s process is simple and mostly done online. You fill out an online form with details of your home, upload pictures and Offerpad will give you a cash offer in 24 hours. Like most iBuyer’s, the offer is contingent on an in-person inspection of the home. So if your pictures are misleading or you did not disclose something about the house, they may renegotiate after physically seeing the property.

Offerpad does provide a couple of perks that other iBuyer’s do not. They offer what is called “Flex Program” where you can use their offer as a backup while you list your property with an agent and take other offers. They can also offer you delayed possession, meaning you can stay in the house after closing for a pre-negotiated period of time. This can be especially helpful if you need the funds to close on your new home. It will also give you more time to move out.

Offers are typically lower than fair market value. After all, these companies need to make their money. However, on the front end, Offerpad offers are mostly higher than the competition. This is because they make money on the backend with fees. Just like a traditional sale where you pay agent commissions, you’ll end up losing about 5-6% to Offerpad in service fees. In addition the service fees, you also have to cover your own closing costs. Many local cash homebuyers do not charge fees AND cover all of your standard closings. Always remember to do the math before accepting an offer!

Key Features of Offerpad

  • Instant Offers: Within 24 hours of providing property information, homeowners can receive an almost instant cash offer.
  • Flexible Closing Dates & Delayed Possession: Sellers can choose their own closing date and get delayed possession for additional flexibility.
  • As-is Cash Sale. Cash sale meaning no banks, appraisals, or financing contingencies. House is bought as is so don’t have to make any repairs to sell it.
  • Concierge Services: They can help with local moves within 50 miles and in finding a new home.

Drawbacks of Offerpad

  • Service Fees: With the Express Cash Offer, Offerpad’s service fee is 5% plus an estimated 1% in closing costs. With their Flex Offer, the service fee is 6% plus the closing costs.
  • Not All Homes Qualify: Offerpad has specific criteria on what they will buy. For example, they will not buy manufactured homes, houses with structural issues or houses built before 1950.
  • Limited Availability: Offerpad is not available in all markets. There are several US States that have no presence.

What is Opendoor?

Opendoor is widely considered to be largest iBuyer. Like Offerpad, Opendoor provides homeowners instant cash offers, promising to close quickly and purchase the house as is. Founded in 2014 by Eric Wu, Opendoor operates in 26 states and offers a wide range of home buying and selling services. In 2022, Opendoor bought an astounding 34,962 homes. The rising interest rates slowed things down in 2023 (11,246 purchases) but the company plans to buy more in 2024.

Opendoor’s primary focus is providing all cash offers to buy houses. However, they offer other services such as the Opendoor complete program, which allows sellers to buy, sell and close in one transaction. They also have a partnership with Zillow across 45 US markets and national partnerships with title companies which enable’s Opendoor to wrap these costs into the transaction, saving you money.

Opendoor vs Offerpad Process

How does Opendoor’s process differ from Offerpad? They are very similar. You fill out an online form with your property information and you’ll get a preliminary offer. If you like the offer, Opendoor will ask you for a video walkthrough of the home followed by an in-person assessment to evaluate condition and make any adjustments to the offer if necessary.

One big difference between Opendoor vs Offerpad is buying criteria. Opendoor has a lot of restrictions on homes they will buy. For example, they won’t buy homes that are:

  • Manufactured or Pre-fab homes
  • Built before 1930
  • Over $600,000
  • Tenant Occupied
  • On a well and septic system
  • On lots with more than 2 acres
  • In a flood zone
  • Are in need of major repairs (structural & foundation issues)
Manufactured home. Offerpad and Opendoor do not purchase manufactured or pre-fab homes.
If you own a manufactured or pre-fab home, you might be out of luck with Offerpad and Opendoor.

Opendoor has a larger market presence than Offerpad, operating in 26 states (compared to only 14 for Offerpad). Let’t take a deeper dive into pros and cons.

Key Features of Opendoor

  • Instant Offers: Homeowner’s will receive a cash offer within 24 hours of submitting property info.
  • Flexible Closing Dates. Sellers can pick dates based on their schedules.
  • Home Trade-In: Homeowners can sell their current home and buy a new one in one easy transaction.
  • Virtual Tours: Like Zillow, Opendoor lets buyers browse homes they are offering for sale online.

Drawbacks of Opendoor

  • Service Fees: Like Offerpad, Opendoor’s service fee is 5% plus you pay approximately 1% in closing fees.
  • Pay for Repairs. Opendoor may ask you to pay additional fees for repairs. This typically happens when a homeowner provides misleading information about the house initially.
  • House Must be in Broom Swept Condition: Many iBuyers will buy your house “as is” and you can leave what you want. Opendoor requires the house to be fully empty.

Reviews and Customer Feedback

We all know reviews can be a mixed bag. Many times customers only take the time to leave a review when they’ve had a bad experience. This is why we pulled cumulative ratings and reviews from several sources including BBB, Trust Pilot and Site Jabber. Let’s see how the ratings for Opendoor vs Offerpad panned out!

Offerpad Reviews & Ratings

  • BBB Rating: 4.02 / 5 (266 reviews)
  • Trust Pilot Rating: 2.7 / 5 (184 reviews)
  • Reviews.io Rating: 1.9 / 5 (34 reviews)
  • Site Jabber Rating: 2.01 / 5 (68 reviews)
  • Glassdoor Rating: 3.1 / 5 (352 reviews)

Offerpad Reviews Summary: Offerpad’s rating with the Better Business Bureau is 4.02, which is surprising considering that many consumers take to the BBB when they had bad experience with a vendor. However, Offerpad did not fare as well with Trust Pilot, Site Jabber and Glassdoor.

Some reviewers reported having a great experience from start to finish and thought they received a fair price. Negative reviews indicate the company provides low offers and high service fees resulting in prices well under market value. Other reviewers reported that Offerpad would use their due diligence period (property inspection) to lower their offer or back out of the sale. Some reviews mentioned that they do allow you to back out of the contract, but there is a ‘hidden’ fee of 1% of the selling price to do so.

Opendoor Reviews & Ratings

  • BBB Rating: 1.11 / 5 (236 reviews)
  • Trust Pilot Rating: 4.4 / 5 (300 reviews)
  • Reviews.io Rating: 4.4 / 5 (3,309 reviews)
  • Site Jabber Rating: 1.2 / 5 (12 reviews)
  • Glassdoor Rating: 3.8 / 5 (873 reviews)

Opendoor Reviews Summary: Unlike Offerpad, Opendoor has a much lower BBB score (1.11 stars). However, they scored well with Reviews.io, Trust Pilot and better with Glassdoor. It’s possible the company may direct review traffic to specific sites, in this case Trust Pilot. It’s common for businesses to encourage reviews, especially if they know the customer had a positive experience. However, there is no way to confirm this or deny this.

Glassdoor is a review site for employees of the company to leave reviews, which might be the most telling because they actually work for the company. Opendoor has a better rating on Glassdoor than Offerpad which may indicate better management and culture within the workforce.

Overall, Opendoor reviewers reported many similar experiences as Offerpad. Low offers, service fees, and “bait and switch” where they make an initial offer and then lower it after more due diligence.

One Reddit reviewer wrote a very detailed and thorough review of his experience with Opendoor. This was noteworthy because Reddit users build up a “Karma” score and this user had a Karma score of over 22,000 over 3 years. He even responded to other Reddit users claiming he was paid to write the review, “I mean…you could always look at my actual history and see my kharma lol. At this point I wish I did get paid for this post…actually getting dms insulting me for selling a family home to corporate America…”

I believe this review to be a legitimate, truthful review of one customer’s experience with Opendoor.

It’s important to note that many of the negative reviews for both Offerpad and Opendoor did not finish the process and sell their home to these companies. Many reviewers felt they received a low offer and left a poor review as a result.

Offerpad vs Opendoor: The Verdict

Gavel with balancing scale. There is a clear winner in the Offerpad vs Opendoor debate.
After reviewing the pros and cons in the Offerpad vs Opendoor debate, there is a clear winner.

In the Offerpad vs Opendoor debate, who is the winner? When taking a closer look, the companies are very similar. Their marketing is the essentially the same: Cash offer to buy your house as is, quick close, flexible dates, and they will help you move and find a new home. Negative reviews state they both make offers lower than fair market value, charge a service fee of 5% and require sellers to pay their own closing costs. Finally, both have a reputation of lowering their initial offer after doing more due diligence on the home.

However, some key differences set them apart.

Market Presence: Opendoor is the clear winner here. Opendoor currently services 26 states and Offerpad services 14 states. Winner: Opendoor ✅

Buying Criteria: Both companies are pretty limited on what they buy, but Opendoor has stricter buying criteria. For example, Opendoor won’t buy homes with septic systems or wells or homes with major damage. Winner: Offerpad ✅

Cancellation Fees: Offerpad has a 1% cancellation fee and will let you stay 3 days after closing. Opendoor has a free cancellation fee and will let you stay up to 17 days after closing. Winner: Opendoor ✅

Concierge Services: Offerpad offers free moves, cash advances for home renovations, listing services for sellers and loans and discounts when you bundle services all into one transaction. Opendoor does not have many perks. Winner: Offerpad ✅

Renegotiating Repairs: Both companies are known to reduce their initial offer price after the home inspection. However, many reviews claim Opendoor’s in home inspection is more thorough than Offerpad’s thus resulting in higher price reductions for repairs. Winner: Offerpad ✅

Conclusion: The Clear Winner

So, who wins the Offerpad vs Opendoor debate? If you are looking for a company that has less strict buying criteria and a more relaxed inspection period, Offerpad might be your best bet. If you like the option of cancelling with no fees and getting more delayed possession after closing, Opendoor is a better choice. However, there is a clear winner when it comes to finding the right company to buy your house with cash, as is and offer a quick close.

Local is Better

The clear winner: Find a local company with a good reputation that knows your market, can meet with you in person, evaluate the house and give you a fair price to buy the house as is. Many of these companies do not charge fees and offer to pay all of your closing costs as well.

In every market, there are several companies that buy houses. The easiest way to find a local, trustworthy company is Google. That’s right, the same search engine you used to find this article! Simply type in, “We Buy Houses [city] [state]” and dozens of results should pop up. Now you will need to do some detective work.

Many of the tops results that show up are national companies that are looking for clicks so they can sell your info to third parties. These “Pay per lead” companies profit from selling your information, in some cases to multiple other real estate companies. There are national homebuyers that do legitimately buy houses in several markets across the United States, but many of them have a similar model to Offerpad and Opendoor (initial offer is sight unseen, reduced offer after inspection, fees, etc).

Finding a Reputable Local Homebuyer

So how do you find a reputable local homebuyer? With a well-trained eye, and quick Facebook check, it’s easy to identify a credible, local homebuyer. Local companies usually have a website that is focused on the local market. Owners usually have pictures of themselves (sometimes even their family) and local phone numbers. These are all signs that you found a locally owned and operated company.

Local homebuyers usually usually show up in the Google business listings. From here, you will be able to see the address of their physical location, check hours and read Google reviews. The Google business listing should look something like this on your smart phone or computer.

When you connect with a live person at the company, ask them what neighborhoods they buy in and to give you some examples of some recent purchases. If the company is local, they should know the area well and be able to tell you some specific neighborhoods.

Ask them for an in-person appointment. If the company is unable to book you an in-person right away, there’s a good chance they might be out of state wholesalers or some other middle man. Local companies with a good reputation prefer to schedule an in-person appointment up front, see the house and make you a fair offer.

Conclusion

You have a lot of options when selling your home. While listing your home with a reputable real estate agent will usually get you most money, there are certainly instances where selling to a cash investor make more sense. If you need to sell quickly or if the house needs substantial repairs, cash always simplifies the selling process. Larger companies such as Offerpad and Opendoor could be an option, however you are better off working with a local company if you want a fair offer and a smooth transaction. Finally, the Offerpad vs Opendoor debate is settled once and for all.

About the author: Ryan hovers around a 10-20 handicap any given day. But the talent is there, no question.