It’s hard to estimate all of the costs of a traditional home sale because so many of your expenses depend on the demands of the buyer and the amount of time it takes you to sell.
When you sell to Opendoor, you get the certainty of a competitive offer and control over your moving timeline; you avoid many of the costs and stresses of the traditional process. Here’s a refresher on how it works.
“But it sounds too good to be true.”
We hear this all the time so here’s what we’ll cover…
- Opendoor vs Traditional: Compare the costs side-by-side
- Our fee vs agent commissions: What’s the difference?
- The Opendoor service charge: We’re transparent about our pricing
How Opendoor compares to a traditional sale explained in 2 minutes.
After you tell us about your home, our goal is to have a competitive, all-cash offer in your inbox within 24 hours. You avoid the costs of listings, showings, and home prep. You also choose your close date and do all of the paperwork online.
Opendoor vs Traditional: Compare the costs side-by-side
When looking at the costs to sell your home, it’s natural to fixate on the 5 to 6% typically paid in agent commissions. But… selling your home can add up to more than 10% of the sale price when you consider all of the costs like seller concessions, holding costs, repair costs, housing overlap costs, and closing costs.
The chart below shows how these costs can add up for a $200,000 home. You avoid many of these costs when you sell to Opendoor.
Click the links to jump below and see how each expense differs with Opendoor vs the Traditional process.
|Staging and home prep costs||1%||No prep|
|Seller concessions||2%||No concessions|
|Repair costs||Depends on assessment||Depends on assessment|
|Homeownership and overlap costs||1%||Choose your close date|
|Total costs:||$21,000 (10.5%)||$17,400 (8.7%)|
*Opendoor fee represents average in all markets as of March 2019. Traditional agent commission is estimated at 5.5%. Other selling costs are estimated based on internal and industry data for markets in which Opendoor operates.
If you’re planning a sale, use our home sale calculator to input your own costs and estimate your net proceeds—the amount of money you pocket after closing.
1. Seller fees
The seller pays commission fees for both their agent (the “listing agent”) and the buyer’s agent. The total commission in many areas ranges from 5% to 6% of the sale price, which is often split evenly between the listing agent and the buyer’s agent.
Even if you’re planning to save money by selling your home on your own, you’ll likely need to pay a commission fee of about 3% to the buyer’s agent. According to the National Association of Realtors, 87% of buyers have an agent.
Selling to Opendoor
Instead of agent commissions, we charge a service fee. It covers the costs of buying, maintaining, and eventually selling your home.
Our fee currently averages 7.7% across our markets, but it can range between 6-13% based on how long we expect it will take to sell your home. When you receive an offer, you know exactly how much our fee will cost.
2. Staging and home preparation costs
Before selling you’ll typically need to make your home “show ready” to attract buyers. Paying to stage your home isn’t required, but it’s often recommended. This includes cleaning and decluttering your home, paying storage fees for furniture you need to hide away, and any cosmetic touch-ups like fresh paint, new carpet, or updated fixtures and appliances.
We estimate these costs at about 1% of the sale, but they can be more expensive if you need to hire a professional stager or if your home requires significant updates.
Selling to Opendoor
There are no staging, storage, or prep costs when you sell your home to Opendoor. We give you a competitive, all-cash offer based on the important factors: your home’s features, condition, and current market trends.
3. Seller concessions
You’ve found a buyer—congrats! But wait, they’re asking for concessions? Buyers often ask sellers to cover costs such as inspection fees, processing fees, transfer taxes, and even agent commissions. This is why the highest offer isn’t always the best offer.
Our analysis of home sales data indicates that when buyers in Phoenix, Dallas, Las Vegas, and Atlanta ask for concessions, they ask for about 1.5% to 2% of the sale price on average.
4. Repair costs
After you’ve agreed to an offer, the buyer will typically have the home inspected for any defects. Buyers may ask you to make the repairs yourself or they might request a credit equal to their expected costs of making the repairs.
Negotiating repairs can be a headache, and the costs are difficult to predict upfront because every buyer is different.
Selling to Opendoor
After you request an offer, we schedule a free home condition assessment. If repairs are needed, we’ll provide you with an itemized list that includes the costs.
In calculating repair costs, we do our best to pass wholesale savings on to you from our partnerships with local vendors. You can either choose to handle some or all of the repairs yourself, or we can do the work after you move out and deduct the costs at closing.
5. Homeownership and overlap costs
Timelines almost never align perfectly so it’s easy to overlook costs for temporary housing like a short-term rental or a double-mortgage. You may also need to pay storage fees and extra moving costs, or alternatively, you may need to negotiate a lease-back for the transition period.
Even if you are able to align timelines, be prepared to pay holding costs for the days you still own your old home like property taxes, mortgage payments, HOA fees, utilities, and insurance. Our analysis of industry data suggests these costs typically add up to about 1% of the sale price assuming a transition period of one and a half months.
Selling to Opendoor
With Opendoor, you control when you move. You choose your close date, whether that’s in ten days or sixty days, and you have the flexibility to change that date if something comes up. Avoid the extra costs of short-term housing, storage, and holding costs during the transition period.
If you’re buying and selling at the same time, learn about our trade-in service. You can move in one, simple experience and save 2% on fees.
6. Closing costs
Closing is the final step of selling a home when money and documents change hands in order to transfer ownership of the property to the buyer. Closing costs cover items like title insurance, escrow fees, and HOA transfer fees. They can range from 1% to 3% based on the different fees and legal requirements for each state and municipality.
Selling to Opendoor
Closing costs are a part of every home sale, including selling to Opendoor. You’ll see your estimated closing costs when you receive your offer so there are no surprises.
How the Opendoor service charge differs from agent commissions
There are a lot of unknowns in the traditional process. When you sell to Opendoor, the service we provide is simplicity, certainty, and convenience. In return for that service, we charge a fee.
A common misconception is that you won’t sell your home for top-dollar because our fee is higher than agent commissions. When you consider the cost savings we outlined above and the full range of services we provide, your net proceeds can be higher with Opendoor. Plus, you can sell your home without the headache.
When you receive an offer, we show you exactly how much our service charge will cost. If you have questions about the offer or the fee itself, you can always speak one-on-one with your Opendoor Home Advisor.
What does the Opendoor service charge cover?
The majority of our service charge helps us pay for costs normally found in a listing agent’s commission like marketing costs, and the roughly 3% that we pay to the next buyer’s agent. The vast majority of our buyers have agents, and we honor the commission.
Unlike your listing agent, we cover holding costs associated with owning your home so you can choose your close date and move with certainty.
To do this, we forecast the amount of time it will take to sell your home using market trend data. Then we calculate the costs of property maintenance, utilities, taxes, and daily financing interest for each day we think we will own your home. Finally, the amount we collect for providing a stress-free experience is about 1% of our total service charge.
Here’s a breakdown of our fee for a recent offer in Minneapolis, MN:
Opendoor Service Charge
Commission paid to the agent of the next buyer, similar to a traditional sale.
Cost of prepping, staging, and listing to get your home ready for sale.
Cost of property taxes, insurance, financing, and maintenance.
Opendoor’s fee to deliver a hassle and stress-free experience.
We believe in showing you everything we can upfront, even if the costs seem higher, rather than pitching you on a lower sticker price and hitting you with hidden fees later.
Here’s what’s in an Opendoor offer:
When you receive an offer in your inbox from Opendoor, we break down exactly what our service charge will be, and we give you an estimate of your costs and your net proceeds. You’ll know all of this information before you start the process.
When you accept, you can cancel at any time before closing without a penalty, even after the free home condition assessment. You know your costs before making a decision.
Each person’s situation is unique, so when it comes to life’s biggest transaction, take into account the full costs of selling, your ideal moving timeline, and how hiccups along the way might impact your net proceeds. Finally, think about the time and effort you want to invest in the process. We’re here to help.
Get a competitive offer from Opendoor
Sell your home without the hassle. Requesting an offer is free, there’s no obligation to accept.
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By Tiffany Chi & Joe Gomez