Offerpad is an iBuyer, a company that provides users instant cash offers on their homes. So instant that seller can get an offer in as less as 24 hours and close within 10 days. Now that’s really quick for a home sale.
However, to decide whether you should sell to them or not, we outline some Offerpad reviews. But, first, let’s get an understanding of how Offerpad works.
How does Offerpad function?
Offerpad is the country’s second-biggest iBuyer by purchase volume. Sellers seeking to streamline their sale process without getting into the complexities of listing with agents, scheduling open houses, etc. iBuyers like Offerpad can be a good option.
Having said that, the repair deductions and service fees that the company charges can eat into your profits. This leaves you with less money in your pockets than you would likely get if you opted for the “for sale by owner” route. You should check out various For sale by owner websites for the same.
Offerpad does not buy all types of houses. They have very strict criteria and are very specific about the homes they purchase.
To qualify for their purchase, below are a few criteria:
- The house should be constructed after 1960
- Plot size must be less than 1 acre
- The price of the house must be less than $1 million. This varies as per markets.
- Only residential homes like condos, single-family houses, and townhouses qualify
Customers work with Offerpad’s internal team and 3rd-party vendors. The company’s employees depend on their experience and the in-house algorithm to assess the homes listed online. This allows them to decide on the cash offers.
This process might sound like a cakewalk, but as a seller you will have to coordinate with many points of contact. Also, the prices estimated for the properties are not revealed, which implies that sellers may have no idea how these prices were evaluated.
Offerpad fees
The convenience of a quick sale and hassle-free process comes at a price, which is their service fee. This usually ranges between 6% and 10% of your property’s offer price. The company computes the fee based on how much time and energy they should put in to resell your house. The average fee comes at around 7%.
The exact fee varies based on the costs the company has to pay when buying your house i.e. on maintenance, taxes, utilities, etc. Then there is the cost that they will incur during the resell of your place, for example, the buyer’s agent commission.
One should note that the closing costs do not comprise the company’s service fee. The closing costs and repairs you will have to make will be reduced from your sale price.
Closing costs usually range from 1-3% for the seller. There are no hidden charges levied by Offerpad. But, it does not explicitly mention its cancellation fee.
Offerpad Reviews
Offerpad reviews on trustworthy sites like Yelp and Trustpilot back the legitimacy of the company. Positive Offerpad reviews appreciate the excellent customer service, great communication, and a seamless process.
However, there are more negative reviews than positive. Many past sellers state that as the company will make money from selling your home, the likelihood of its offer falling short of your expectation is high.
Once sellers deduct the service fees and repair costs, the profits will further fall. Some Offerpad reviews also reveal that besides the high costs and not-so-great offers, the realtor compels sellers to sign an agreement before knowing the final sale price.
Sellers get only four days to decide if they wish to go ahead with the deal or not. And if they choose to cancel the deal, reviewers say that the company charges a 1% cancellation fee.
By contrast, discount real estate platforms like Houzeo, Redfin, etc charge a nominal flat fee in exchange for a suite of services. In Houzeo reviews, sellers mention that their listings got more visibility, which not just enhanced their reach but also gave them the freedom to pick the best offer from several ones.
Some Houzeo reviews also state that after registering sellers can customize the packages based on their needs and also pick services like pricing assistance, contract review, and professional photography.
Many Offerpad reviews mention that sellers have faced issues because of the company’s inflexible terms and stringent qualification criteria.
Is Offerpad the right choice for you?
Here is a quick summary of when you can consider Offerpad and when you should avoid it:
Consider when:
- Selling your property quickly is more important than money
- You wish to avoid the typical process of home-selling and get to the last part
Avoid when:
- You want a high price for your property
- You are uncomfortable with the idea of signing the agreement without knowing the closing costs of your home
If iBuyers like Offerpad are not your cup of tea you can look at alternatives like flat-fee MLS websites which enhance your reach and offer more savings.
