Opendoor bounces back from FTC Fine with new product launch — RISMedia

What a way to start a new month. That’s probably on the mind of one of iBuying’s most prominent players, Opendoor, as it launches a new product after being fined by federal regulators.

Days before the Arizona-based company is expected to report its final earnings, Opendoor received a $62 million fine from the Federal Trade Commission (FTC). The FTC accused the iBuying giant of “cheating potential home sellers” with misleading information about how much more money they could make selling their home to Opendoor than on the open market using traditional processes.

“Opendoor promised to revolutionize the real estate market, but built its business using old-fashioned deception about how much consumers could make by selling their homes on the platform,” said Samuel Levine, director of the Bureau of Consumer Protection of the United States. the FTC, in a statement Monday. .

The FTC claimed that Opendoor advertised that consumers would earn “thousands of dollars more” by selling to the iBuyer. A survey by the agency found that most consumers lost money by selling to the company.

The agency’s investigation uncovers several other alleged misdeeds, including Opendoor’s misstatement that consumers would likely have paid less fees by selling to the tech company than they would with traditional transactions.

The FTC also alleged that Opendoor was breaking the law by using projected market value prices when making offers to buy homes. The charges include downward adjustments in market values.

While Opendoor disagreed with the FTC’s allegations, the company announced in a statement Monday that it would pay the $62 million. According to the FTC, the company has also agreed to “stop misleading potential home sellers” and “stop making unfounded claims.”

The iBuyer also noted that the FTC’s allegations are related to activities that occurred between 2017 and 2019, and the company changed its target marketing messages “years ago.”

“Our decision to settle with the Commission will allow us to resolve the matter and focus on helping consumers buy, sell and move with simplicity, certainty and speed,” said Opendoor. in a statement. “We are delighted to put this business behind us and look forward to continuing to provide consumers with a modern real estate experience.”

The company appears to be doing just that as it launched a new product called Opendoor Exclusives on Tuesday.

Opendoor Exclusives, touted as a “one-tap buying experience for home buyers,” is a self-service product designed to bring an e-commerce-like experience to the home buying process, according to a statement from Opendoor.

“Between rising interest rates and low housing stock, it’s a challenging time to buy a home,” said Merav Bloch, vice president and general manager of Opendoor Exclusives. “In a competitive environment with high mortgage rates, aspiring homeowners feel frustrated, anxious and defeated after losing on bids. We built Opendoor Exclusives to make buying a home more secure and hassle-free.”

Launched in Austin, Houston and Dallas-Fort Worth, Texas, Opendoor Exclusives makes iBuyer’s offerings available to consumers for 14 days before being listed on a multiple listing service (MLS).

During that 14-day period, buyers will be offered discounted prices for which Opendoor will list the home on an MLS, according to the company page.

If a consumer buys a home from Opendoor Exclusives that appraises for less than the purchase price, the company said it would lower the price by up to $50,000 to match the appraised value under its Appraisal Price Match Guarantee.

“This gives you more confidence that you are not paying too much for a house,” said Opendoor.

“Our exclusive price means no bickering, no lack of transparency and no more love letters to sellers. With Opendoor Exclusives you are in control’, says Opendoor.

Additional benefits include a fully digital checkout and no penalties if buyers change their mind and go back anytime before closing.

Shoppers can explore and virtually visit homes owned by Opendoor on the Opendoor Exclusives site and go through a short verification process. To purchase an offer, consumers can click a “buy” button that allows them to sign a contract, make a serious deposit, schedule inspections, and finalize the lender’s details (including a review) online.

“We’ve heard from our customers how difficult it can be to buy a home in this market environment and how stressful the process can be, so we decided to build something better,” said Opendoor in the FAQ section of the webpage. of the program. “Because we own these homes, we can give our customers the opportunity to buy them before anyone else and make the purchase process simple and streamlined.”

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