Are you looking for an easy way to sell your home without bothering with realtors, appraisals, and the headache of the typical sales process? If so, look no further than Offerpad.
What Is Offerpad?
Phoenix, Arizona-based Offerpad is a real estate company that makes selling your home easy. Operating in the iBuyer market, Offerpad cuts out the middlemen of the traditional home sale buy using its own funds to buy and sell homes. With total funds raised of $975 million, the startup is valued at over $1 billion.
With so much funding, you’d think business is booming – and you’d be right. Facing stiff competition from Opendoor and Zillow offers, direct homebuyers are turning to venture capital to bolster their war chests. Apparently this is working, as Offerpad was projected to sell over $1.5 billion in homes in 2018.
Where Are They Operating?
Presently, Offerpad conducts transactions in Phoenix, Atlanta, Orlando, Tampa, Las Vegas, Charlotte, Dallas-Fort Worth, Tucson, San Antonio, Houston, Raleigh, and Austin. These have all been test markets and while the company wishes to grow organically, they are also eyeing other markets to facilitate a significant expansion.
How Does Offerpad Work?
Offerpad has a fairly simple process. We tested it out on a Houston-area home and the entire process took around 5 minutes.
Provide your address, basic home information, and relevant information about upgrades, finishes, and key features. The website will prompt you with questions and lists to make the process as easy as possible.
2. Property Analysis
After running the information through their algorithm, Offerpad will send the information to their team of analysts. They then compare their data against public and proprietary information to calculate a cash offer for your home.
3. Select Options
Upon receiving your offer, you’ll be provided with a number of options. These include a Free Local Move (keep reading to find out about this), flexible closing dates, or even temporary housing until you find a new home.
Of course, each of these options cost money and will be factored into your sale price, but are provided to help make your home sale as easy as possible.
4. Sign Documents Online
Offerpad makes the sale process easy by allowing you to sign your documents online. After this is done, you’re almost there!
5. Complete Home Inspection
An Offerpad inspector will visit your house to verify your claims and to establish the condition of the home. After all, if you told them you have granite counters when they’re really made of ceramic tile, their offer will be adjusted.
6. Close On Your Sale
Once the above steps are completed, you’ll receive a check and transfer title on closing day. It’s that easy!
iBuyers don’t require high margins because they are buying direct from consumers. Similar to For Sale By Owner transactions, the seller saves money by eliminating the realtor commission and buyer concessions.
While FSBO transactions allow the seller to take home more of the sale proceeds, iBuyer transactions are used for the sheer ease of the process. There is no negotiating or arguing about minor details – there is just an offer and a sale, that’s it. Though Offerpad does charge a fee, it’s typically less than the agent commissions and seller concessions.
It’s hard to say just how much Offerpad will save you, as we don’t have a house to sell. However, their website provides this example of a typical home sale vs. a sale using their service. While this should be used only for reference, we can vouch that it’s likely accurate based on our years of industry experience in direct home sales.
Benefits To Sellers
In addition to removing the headache from the home sale process, Offerpad provides unique options for sellers.
Move For Free
Don’t feel like hiring a moving company? With Offerpad, you don’t have to. If you are moving within to miles and your home is under 2,800 sq ft, you are eligible for a free move. Once your property is under closing, a professional moving company will work with you to move your belongings.
Offerpad pays the movers directly so you won’t need to worry about lost invoices. Talk about making a move stress-free.
Extended Stay Program
Another feature unique to Offerpad is the extended stay program. With any home sold to the company, you’re eligible to stay in your home for 3 days after closing. This means if you run into any issues, don’t stress! They can work with you for 1-3 days to ensure you’re not pressured to be out until you’re ready.
Buy A Home From Offerpad
In addition to buying homes, Offerpad also sells them. After all, they have to do something with the mind-boggling homes they are buying. Unlike other services, Offerpad has high-quality homes in all parts of the markets they serve.
For example, we sampled homes for sale in Phoenix. With over 257 listings ranging from starter homes to mansions, they have something for everyone. And even better news? They have some unique features that make direct home buying even more attractive.
Related: Want to buy a new home? Make sure you’re prepared by reading our complete guide on buying a house.
In a traditional home tour, you’d wait until your agent was free and then conduct an accompanied showing. Not only would you be pressured to buy the home, but in a hot market, any delay may cause you to miss out on the sale.
With Instant Access, you’re given a door code that may be used to tour any Offerpad home between 6am and 11pm, any day of the week. The best part? You’re going on your own, meaning there’s no agent to wait for.
Unique to Offerpad, a home trade-in lets you select a home from anywhere in the market and then use their services to “trade-in” your current home. Offerpad brings their value by facilitating the sale of your home and ensuring you have a smooth transition.
This varies from a traditional home sale by ensuring the expectations of all parties line up. We’ve worked with countless sellers who ran into trouble with their current home because closing dates were moved. With Offerpad, your transition will be seamless.
It wouldn’t be an honest review without pointing out the negative. Inman’s Chris Rediger points out 7 reasons why iBuyers aren’t good for sellers. And he does bring up some good points. We’ll dive into a few of them and offer our $.02 as to why the negative isn’t necessarily so negative.
Do remember Inman is a service directed at brokers and agents, so of course they will be skeptical of a service that cuts out the agent.
Lower Offers – Yes, iBuyers offer lower prices than the same home would fetch on the open market. However, they are also not requiring you to make improvements and are cutting out the realtor. The lower top-line sale price does’t matter if you’re netting near the same after all costs are subtracted.
Inaccurate Valuations – These direct home buyers are using valuation models generated by computers. While these algorithms give a baseline price, a human Offerpad employee fine-tunes their offer. So the computer may be off by 20%, but the human makes adjustments as needed.
Lack Of Market Need – Rediger argues that the market doesn’t need this service. However, Offerpad is offering a more convenient way to sell you house, that’s it. They’re not necessarily promising they’ll save you money on your sale, but rather that they’ll make the process easier. That’s exactly why they offer flexible closing and cash offers.
Should You Sell Your Home To Offerpad?
The iBuyer market is heating up, and it’s making it easier than ever to sell a home. While traditional direct home sales involved bandit signs and terribly low offer prices, the big players are spicing things up by simplifying the process. If you want to sell your home quickly and for a good price, you should look no further than Offerpad.