When approaching the largest transaction of a person’s lifetime, placing trust in the wrong organization can potentially cost millions. And that’s exactly what happened with Opendoor, a popular online home-selling platform.
Opendoor promised potential sellers a revolutionized approach to real estate that would save them thousands of dollars in fees and higher sales prices. In reality, however, the vast majority of customers lost money through Opendoor when compared to selling on the open market.
The Federal Trade Commission has now taken action against Opendoor labs and has fined them $62 million dollars and is requiring them to cease deceptive practices.
“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,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “There is nothing innovative about cheating consumers.”
Among other infractions, Opendoor violated the law by:
Using “projected market value prices” when making offers to buy homes. However, those prices actually included downward adjustments to the market values;
Claiming it made money from fees, but it made money by buying low and selling high;
Opendoor has now been required to:
Pay $62 million which is expected to be used for consumer redress.
Cease deceiving potential home sellers: Opendoor is prohibited from making deceptive, false, and unsubstantiated claims regarding how much money a seller will receive or the costs they will have to pay to use its service.
Cease making baseless claims: Opendoor is required to have competent and reliable evidence to support any representations made about the costs, savings, or financial benefits associated with using its service, and any claims about the costs associated with traditional home sales.
How to Protect Yourself
There are a couple of ways to protect yourself. Do you remember the old adage, “if it’s too good to be true, it probably isn’t?” It’s good to keep a bit of healthy skepticism in mind when approaching such a situation.
Additionally, do your research! Never take a salesperson or representative’s spiel at face value. Many of these presentations will feel high-pressure. Always step back and do your research.
HAVE A TRUSTED REAL ESTATE ADVISOR
Call upon someone you trust. In real estate, it’s important to have a go-to person who will always your best interests at heart. I’d like to be that person for you.
Don’t let the “bad guys” get you down. The world is filled with endless opportunities. When you are ready to “make your next move” give me a call! 928-821-1138