Federal Trade Commission Settlement: Opendoor to Refund Home Sellers $62M

Remember those ads where Opendoor strongly hinted that if you sold your home with them, you would save money? They’d buy your house, you wouldn’t mess with showings or repairs, It just sounded too good to be true.

The Federal Trade Commission agreed: Opendoor is now banned from making “false, misleading and unsubstantiated claims about how much money sellers will receive when they sell to Opendoor or about the costs of using Opendoor’s service,” as was reported in Inman News Wednesday.

“The order requires Opendoor 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,” the FTC said.

Opendoor admitted no guilt and strongly disagreed with the federal agency that it did anything wrong or misleading. Nonetheless, Opendoor will pay nearly “$62 million in refunds to tens of thousands of home sellers and end its allegedly deceptive advertising under a settlement with the Federal Trade Commission, according to an FTC announcement Wednesday.”

Don’t think the settlement will net any overnight millionaires: a whopping $14.2 million, the biggest chunk of money, will go to 13,103 home sellers in Texas who will receive a median refund of $981. Arizona home sellers will receive a total of $9.2 million with a median refund of $1,046. Florida home sellers numbering 6,201 will get a combined $6.8 million with a median refund of $1,023.

Starting today, the federal agency is sending checks to 54,689 consumers it says were deceived by advertising and marketing claims made by the iBuyer. The median refund amount people who sold their home to Opendoor are receiving is $1,024, according to the FTC’s website.

“According to the FTC’s August 2022 complaint, Opendoor cheated home sellers by tricking them into thinking that they could make more money selling their home to Opendoor than on the open market using the traditional sales process while saving them money on costs,” the FTC said.

“In reality, most people who sold to Opendoor made thousands of dollars less than they would have made selling their homes using the traditional process and many paid more in costs than what sellers typically pay. Under a final administrative order, Opendoor agreed to pay monetary relief and stop its deceptive tactics.”

According to the FTC, Opendoor agreed to change its business practices as part of the deal. The company is banned from making false, misleading and unsubstantiated claims about how much money sellers will receive when they sell to Opendoor or about the costs of using Opendoor’s service.

“The order requires Opendoor 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,” the FTC said.

Asked for comment, Opendoor referred to a statement from August 2022, when the iBuyer first reached its settlement with the FTC.

“While we strongly disagree with the FTC’s allegations, our decision to settle with the Commission will allow us to resolve the matter and focus on helping consumers buy, sell, and move with simplicity, certainty and speed,” the company said.

The crackdown on real estate continues …