Opendoor's marketing materials were filled with eye-catching charts that compared the net proceeds of their customers when selling to Opendoor versus selling on the market. These charts consistently portrayed that customers would earn thousands of dollars more by choosing Opendoor.
Sellers who fell victim to the deceptive advertising and marketing tactics of online real estate company Opendoor Labs, Inc. will soon receive a much-deserved refund of almost $62 million, courtesy of the Federal Trade Commission. The FTC's complaint, filed in August 2022, exposed Opendoor's scheme of luring home sellers with false promises of higher profits and cost savings compared to the traditional sales process. Finally, justice is being served and those who were tricked can now reclaim what is rightfully theirs.
The FTC claimed that Opendoor lured in potential sellers with false and deceptive information. In truth, those who sold to Opendoor ended up pocketing thousands of dollars less than if they had gone through the traditional selling process, and many ended up shelling out more in fees than usual. As part of a final administrative order, Opendoor has agreed to provide financial restitution and put an end to their deceitful 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.”
Based in Tempe, Arizona, Opendoor ran an internet-based real estate enterprise where they purchase houses directly from consumers, offering an alternative to selling on the open market. Marketed as an "iBuyer," Opendoor utilizes advanced technology to provide consumers with competitive offers and lower transaction costs, aiming to save them money compared to the traditional home selling process.
Opendoor's marketing materials were filled with eye-catching charts that compared the net proceeds of their customers when selling to Opendoor versus selling on the market. These charts consistently portrayed that customers would earn thousands of dollars more by choosing Opendoor.
However, according to the complaint, it turns out that the majority of customers who sold to Opendoor actually ended up losing thousands of dollars compared to selling through a traditional realtor. This was because Opendoor's offers were generally below market value, and their costs were higher than what customers would typically pay with a traditional realtor.
The investigation by the agency revealed that Opendoor was found to have misrepresented several key points: using projected market value prices in their offers to buy homes, failing to disclose fees while actually profiting from buying low and selling high, and consumers potentially paying less in costs by selling to Opendoor compared to traditional sales.
If you have any questions about your payment, reach out to the refund administrator, Epiq Systems, at 1-888-546-2054 or visit the FTC website for FAQs on the refund process. Remember, the Commission never asks for payment or account information for refunds. Explore the interactive dashboards for state-specific refund data from FTC cases. In 2023, FTC efforts resulted in over $324 million in refunds to consumers nationwide.
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