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Sometimes you have to think outside the box to sell your home. For instance, instead of a traditional agent-assisted sale, you could sell to an iBuyer, an online company that can make an offer almost instantly, and close quickly too. Offerpad is one such company, promising a fast and easy sale in many U.S. markets. Its services may be useful to homeowners who are in a hurry to sell their home, or who have a stagnant listing that’s not getting any bites.
Like most iBuyers, Offerpad makes all-cash offers. This means there’s no need to worry about a buyer’s financing falling through, or wait for underwriting to be completed, so the sale can close more quickly than traditional sales. Buyers can also purchase a home from the company. Here’s more about how Offerpad works — and whether it’s worth selling your home to the company.
What is Offerpad?
Offerpad is a real estate buying company and one of the country’s biggest iBuyers. It has been in operation since 2015, buying, selling, renovating and renting homes across the U.S. It holds brokerage licenses in several states.
Homeowners who want to sell can initiate the process online and upload photos and/or videos to help Offerpad assess the value of their home. The company will usually make a cash offer within 24 hours.
In some cases, Offerpad can also provide services to get your home sale-ready, like house cleaners and handymen, and they have home-loan services in some markets as well. Buyers in many markets can also buy a home through Offerpad.
How does Offerpad work?
The process of selling your house to Offerpad is done almost entirely online. You fill out some information about the property and upload a few pictures, and within 24 hours, they send you an offer. It’s important to note that the offer is contingent on an in-person home inspection. In addition, not all homes are eligible: Offerpad only operates in specific markets, and it does not buy manufactured or prefab homes or homes with major structural issues. It has value and lot-size restrictions as well. Offers expire after a set period of time; they can be renewed, but it’s not guaranteed that they’ll be renewed at the same price.
Some sellers may find Offerpad appealing because they offer features that address common home sale complaints. For example, if you qualify for the Flex program, you can keep the company’s all-cash offer as a backup while also listing the home and soliciting additional offers. If you choose to accept the company’s offer immediately, the Express plan comes with the option to stay past the closing date while you pack up and a free local move (again, if you qualify).
You may be wondering how companies like this are able to make money. Most iBuyers are house flippers: Offerpad makes money by buying your home, renovating it and then renting or selling at a profit. The benefit to you is a quick and uncomplicated sale process, and the benefit to them is a flip opportunity. The company also charges a service fee of up to 7 percent — this is actually more than the typical 5 to 6 percent a seller would pay in real estate commissions on a traditional, agent-assisted sale.
Is Offerpad worth it?
The benefits of selling to Offerpad are most apparent for someone who prioritizes a fast and easy sale over getting the maximum offer possible. For instance, it may be a great fit for someone who inherited a property they want to get rid of without too much hassle, someone who needs to relocate ASAP for work or someone who needs the cash in a hurry. But it may not be the right fit for every seller. Here are some pros and cons to consider:
- Quick, convenient sale process: If your home qualifies, you’ll get an offer within 24 hours. You don’t need to hire a real estate agent or let a string of house-hunters into your home. The company lets you choose your own closing date as well.
- No financing: Offerpad extends all-cash offers, which means you’ll get your money sooner, with no risk of financing falling through and no need to wait on lengthy underwriting from lenders.
- Perks for qualified sellers: Those who qualify can take advantage of a variety of services, receive a free local move, earn a discount for selling a home and buying a new one at the same time, and more.
- Lower purchase price: Like all iBuyers, Offerpad needs to make money on their real estate transactions in order to stay in business. So don’t expect to get a top-dollar offer.
- Fees and closing costs: The company charges service fees that are comparable to, or even higher than, standard Realtor commissions: typically 7 percent for Express offers and around 6 percent for Flex offers (amounts may vary based on your market). As with a traditional sale, sellers are also responsible for closing costs, and if issues are found during the home inspection, you may have to offer repair concessions or consider a lower price.
- Limited availability: Offerpad does not operate in every market. That being said, it does buy homes in more than 1,000 cities across the country, including major markets like Phoenix, Denver, Tampa, Atlanta, Indianapolis, Las Vegas, Charlotte, Dallas, Houston and Nashville.
Find a trusted real estate agent
If you want to sell for the best price possible, the best route is usually to work with an experienced local real estate agent. Agents know their market inside-out, know how to get you the highest possible offer and can guide you through the selling process with professional expertise. Direct referrals go a long way here: Ask friends and family if they’ve worked with anyone they’d recommend. It’s also smart to look at “for sale” signs in your neighborhood and reach out to the Realtors whose names appear on the signs.
You can try. Offerpad is willing to hear you out if you feel there’s something their offer does not take into account, and they may even re-evaluate your property. However, they may not be willing to budge significantly from their original offer.
Offerpad is a legitimate company that was founded by Brian Bair in 2015. It holds brokerage licenses in 17 states and is publicly traded on the New York Stock Exchange. It has many satisfied clients — however, everyone’s experience is different, and every market is different, so it’s worth checking online reviews in your area before making a commitment.
Opendoor, another large iBuyer, operates in much the same manner as Offerpad. However, it buys homes in many large markets that Offerpad does not, such as San Francisco, Miami, New York and Washington, D.C. It also charges a lower service fee percentage. Each company has its own pros and cons, though, and the right one for you depends on your location and personal preferences.
The company analyzes recently sold homes in your area and the amenities on your property before making an offer — similar to what any buyer would do. They may lower their offer if they discover the need for repairs, also similar to any other buyer. Because iBuyers need to make money on the transaction, they typically pay less than you might get on the open market; the seller gets speed and convenience in exchange.