The FTC just slapped Opendoor with a $62 million fine for 'misleading' customers about the true costs of its home buying business
The Federal Trade Commission is fining home buying company Opendoor $62 million for "cheating" home sellers. In a settlement announced on Monday, the FTC said Opendoor told customers that they could make more money selling their homes to the company than they by selling homes traditionally. The FTC found that, in fact, most people who sold their homes to Opendoor made less money than they would have selling to regular buyers via a real-estate agent. Opendoor, which bought 36,908 homes in 2021, is an instant buyer, or "iBuyer", which buys homes directly from owners and then resells them, sometimes making small renovations to homes. The company is able to close on homes much more quickly than traditional buyers purchasing via a real-estate agent. Opendoor, which reported $28 million in net income in the first quarter of 2022, makes money by charging its own fee in the place of a traditional brokers' fee.
“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 F.T.C.’s Bureau of Consumer Protection. “There is nothing innovative about cheating consumers.”
Read Full Article Here: https://www.businessinsider.com/opendoor-gets-62-million-ftc-fine-misleading-customers-costs-2022-8
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Doug Young - Managing Broker