FTC Fines iBuyer Opendoor $62M for ‘Tricking’ Sellers

Dated: August 3 2022

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The FTC alleges the iBuyer used “misleading and deceptive information,” and its sellers “made thousands of dollars less” than they could have via a traditional listing.

WASHINGTON – The Federal Trade Commission (FTC) today took action against an online iBuyer. It claims Opendoor Labs Inc. cheated potential home sellers by tricking them into thinking that they could make more money selling their home to Opendoor than on the open market using a traditional sales process.

The FTC alleges that Opendoor used misleading and deceptive information when in reality, most people who sold to Opendoor made thousands of dollars less than they would have made selling their homes using the traditional process.

Under a proposed administrative order, Opendoor must pay $62 million and stop its deceptive tactics.

“Opendoor promised to revolutionize the real estate market but built its business using old-fashioned deception about how much consumers could earn from selling their homes on the platform,” says Samuel Levine, director of the FTC’s Bureau of Consumer Protection. “There is nothing innovative about cheating consumers.”

Opendoor, headquartered in Tempe, Arizona, operates an online real estate business that, among other things, buys homes directly from consumers as an alternative to consumers selling their homes on the open market. Advertised as an “iBuyer,” Opendoor claimed to use cutting-edge technology to save consumers money by providing “market-value” offers and reducing transaction costs compared with the traditional home sales process.

Opendoor’s marketing materials included charts comparing their consumers’ net proceeds from selling to Opendoor versus on the market. Those charts almost always showed that consumers would make thousands of dollars more by selling to Opendoor. In fact, the FTC complaint states that the vast majority of consumers who sold to Opendoor actually lost thousands of dollars compared with a traditional real estate sale. It says Opendoor’s offers have been below market value on average and its costs higher than what consumers typically pay when using a traditional Realtor.

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Marc & Shelley Kerschner

As a husband and wife Real Estate Team we each bring our strenghts to help you in your Real Estate transaction and goals. Marc, a retired Doctor of Chiropractic, has been a Realtor since 2008. He ....

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