What Offerpad Reviews Reveal
Offerpad is an iBuyer company that provides customers with near-instant cash deals delivered to their homes. In 14 US cities, you can enter your home address and some information and get an offer almost instantly.
But this process has a high cost. Read on to learn more about the Offerpad business, how the company works, its fees, pros and cons, and other options to consider when selling your home.
With Offerpad, you can receive a cash offer within just 24 hours of your initial contact with a company and close within 10 days. That's too fast to sell a house.
As an online real estate service, Offerpad buys homes and then resells them for a profit. Speed and convenience come at the expense of fees: 6 to 10%, average 7%.
Compare this to traditional real estate commissions, which typically range from 5-6% depending on the market.
What is Offerpad?
Offerpad is iBuyer, a new category of online real estate companies that offer quick cash deals on homes. Unlike We Buy Ugly Houses and similar cash backers, iBuyers uses algorithms to determine their bids. They use local home prices, home features and home conditions to arrive at a quick appraisal.
iBuyers will also send an in-house local market expert to confirm your appraisal with an on-site inspection prior to purchasing a home. By combining computers and people, Offerpad gets the best of both worlds. If there are any undiscovered issues or repairs needed, they will be removed from the Offerpad offer.
Offerpad then prepares a final offer that owners can accept and close within 10 days, much shorter than the average 35-45 day timeframe for most real estate transactions.
If you choose Offerpad, you get many conveniences in the process of selling your home. You won't have to prepare or stage your home, sell it to buyers, hold open houses or even negotiate.
Overall, the ease of use of iBuyer like Offerpad has its pros and cons. It's quick and easy, but will likely leave money on the table in service fees, repairs, and more.
Where does Offerpad operate?
Offerpad operates its home sales business in 19 markets (as of July 2021), primarily in the Southwest and Southeast;
- Saint Anthony
- Vegas, Nevada
- Charlotte, South Carolina
- Atlanta Georgia
- Birmingham, Alabama
- Denver, Colo.
- Indianapolis, IN
- Nashville, Tennessee
What is Offerpad’s selling process?
Selling with Offerpad is not the same as selling your home with a traditional real estate agent. Learn how selling on Offerpad works to see if it's the right decision for you based on your circumstances.
1. Request Your Offer
Of course, the first thing you need to do to get an offer from Offerpad is to request it. You'll start by filling out a form on their website and answering a few basic questions. You will provide your address and some additional details, including:
- The square meter of the house
- your build date
- when you want to close
- Number of bedrooms/bathrooms
- The design of your home
- device type
- Countertops and floor type
- Any extras you add
Offerpad wants you to upload photos of your home or take them on a 15-minute video tour so they can get a feel for your property. The photos and manual help Offerpad determine a more accurate estimate.
2. Calculating Your Offer
After you submit your data, Offerpad uses their algorithm, also known as the Automated Valuation Model (AVM), combined with their in-house experts to calculate the offer.
This differs from the traditional real estate process of using a Comparable Property Appraisal (CMA) to determine your home's valuation. Offerpad's process uses information about your home, as well as data about your neighborhood and market, to arrive at a valuation. Their in-house experts review this proposal and change it if they have any adjustments.
3. Accepting or Rejecting Your Offer
When you receive your initial offer from Offerpad, you only have two options. Accept it or reject it. Unlike traditional real estate, you cannot make a counter offer.
If you agree, you can choose from additional features on Offerpad, including setting your closing date, your local mover, or joining their extended stay option.
Offerpad gives you four days to decide. If you accept the initial offer, you can sign everything online.
4. Your Home Inspection and Repairs
Once you sign your pre-purchase agreement, Offerpad will send an internal or external representative within 15 days, depending on the closing date you select. This Offerpad employee or a third-party inspector will inspect your home to verify its salable condition.
They will list any necessary repairs or special inspections you will need based on your home and lot. Verification costs are part of the service fees charged by Offerpad. However, the repair is not performed.
If the inspector determines that you need repairs, you have three options:
- Do the repair yourself. You can hire a licensed contractor (which Offerpad requires) and fix any problems. You will need to provide Offerpad with all documentation including receipts, before and after photos, contractor's license, etc.
- Cost of credit repair. You may pay the repair costs specified in your contract by essentially deducting the cost of the cost that Offerpad paid.
- Reject renovations on Offerpad – If you choose this option, Offerpad will most likely pull out of the sale because they want to renovate the home to sell for a profit. The contract is void and you will be out of the sale.
5. Closing Your Sale
Once you've taken care of inspections and repairs, you're ready to close. Offerpad will hire a title company or attorney to conduct the escrow and title search.
You will most likely have to go to a title company or attorney's office to sign the papers. Once the sale is registered and ownership transferred, you can receive your money.
Does Offerpad buy all homes?
In addition to only being in 15 markets, homes must meet certain criteria for Offerpad to make an offer, including:
- single family home
- Must be built after 1960
- Lot size is less than one acre
- Cost is <600k (depending on market)
They do not buy homes outside their service areas, mobile homes, prefabs or prefabs. Offerpad also does not deal with homes with major foundation problems or homes with property problems.
What are Offerpad’s fees?
Offerpad's convenience comes at a price: your service fee. This fee ranges from 6-10% of your home's offer price. The company calculates the fee based on how much effort and time they have to put into reselling your home. The average fee is 7%.
The exact rate will change depending on the costs Offerpad has to pay when you buy your home: utilities, taxes, maintenance, etc. They also need to consider the costs they will incur when selling the home, such as the buyer's agent's commission.
It is important to note that your closing costs are not covered by Offerpad's service fee. These and any repairs you have to make or credit will be deducted from your sale price. Closing costs range from 1-3% per seller.
Buying with Offerpad
So what does Offerpad do with the homes you buy? He sells them to new buyers. So what makes buying a home on Offerpad different? The most innovative feature is its instant availability, the ability to visit a home without the need for an agent.
You can visit the property from 6 am to 5 pm. m. and 11 p.m. m. any day of the week by getting your own access code with your app.
Buying with Offerpad gives you more flexibility in moving, allowing you to plan the closing to suit your needs (since there is no current occupant). They will also work with your current agent and pay them the buyer's agent commission.
However, Offerpad is only available in 15 markets. There have also been some reports of shoddy repairs on homes sold by Offerpad.
Offerpad has a 94% customer satisfaction rating based on their own reviews from the last 30 days.
Third party reviews are not welcome. As of January 27, 2021, Offerpad has an average customer rating of 2.2/5 based on 58 reviews.
- Reviews.io: 2.17/5 (6 reviews)
- Yelp. 1.5/5 (22 reviews)
- Sitejabber: 2.78/5 (33 reviews)
- Better Business Bureau. A+
Positive reviews mention excellent communication and customer service, as well as a smooth process. Negative reviews focus on inferior offerings, lack of support, and shoddy fixes.
Offerpad's biggest competitor is Opendoor, the biggest iBuyer in the universe. Zillow and Redfin also have their own iBuying, Zillow Offers, and Redfin Now arms, respectively. These iBuyers are location limited and have similar prices, but they can help you sell your home quickly.
Simply put, iBuyer is a major real estate company that will buy your home for cash. They use a sophisticated algorithm to determine the value of your home and then offer you all cash. Then, if needed, they will renovate and try to sell your home for a profit.
This is in stark contrast to traditional real estate transactions, in which your real estate agent will offer your home to potential buyers until you negotiate and/or agree to a deal.
The selling point of most iBuyers is how easy and stress-free they make the process for sellers. It's as simple as visiting their website and filling out the forms. If an iBuyer is interested, they will receive a cash offer relatively quickly, usually within 24 hours.
You should think about the offer a bit. Typically, iBuyer will offer you less than you might want on your home. And because of the high volume of homes they're moving around, they won't be interested in negotiating when they offer you a price. But you'll be able to close very quickly, in days or weeks instead of months.
iBuyers uses an automated value model (AVM) to determine the value of your home. This is an algorithm created by their own software and is based, at least in part, on their market comparable properties (comps).
Because iBuyers rely on technology to determine your offer, they may not even see your home in person.
iBuyer is not a drone. They don't want to spend time and money on home renovations. Their entire business model is based on buying a home that is in good condition and that they can sell quickly and profitably.
Because they want to get their cash back as quickly as possible, iBuyers can be very particular about the homes they buy.
If you choose to work with UpNest, owned by parent company Realtor.com, you'll be able to choose from the top 5% of agents in your area who can sell your home fast. You'll also save money on commissions in the process. With an UpNest-provided agent, you'll get the best price for your home because you're working with the best.
UpNest has over 2,000 customer reviews that you can check out here, with an average rating of 4.8 out of 5 stars. You can also check out our ShopperApproved reviews page, which has over 2,200 reviews with an average rating of 4.5 out of 5 stars. 5.
Sell your home with UpNest and get world-class support, the advice you need to move quickly on the market and the price you deserve for your property.
Is Offerpad right for you?
Offerpad can be a great option if you need to sell your home quickly and don't mind losing some value for a service fee or low offer. Repair costs can also reduce your profits. But if you need to sell quickly, in as little as 10 days, the convenience of Offerpad can be worth it. After all, it makes more sense to sell through a less rushed process whenever possible.
UpNest is a free service for home buyers and sellers to find the best real estate agents locally. The UpNest platform allows you to compare multiple agents in your area so you can compare reviews, commissions, previous sales, and more.
Our agents are thoroughly vetted and often offer competitive, below-average commissions to UpNest customers. There is no obligation to sign up with one of our real estate agents, but when you can potentially save thousands in commissions, why not? If you're ready to get started, just enter your zip code below.
Is Offerpad a ripoff?
Offerpad is a legally licensed real estate company in the states where it operates. They are licensed by the Better Business Bureau, so they make a diligent effort to respond to complaints. Housing offers are real and they will honor them.
Does Offerpad offer good prices?
The offer you receive from Offerpad from its automated valuation model may be lower than what you would receive on the open market. You can expect more than a cash buyer (like Homevestors) but less than selling with a real estate agent. Offerpad's high fees (up to 10%) will also eat into your revenue.
Does Offerpad pay closing costs?
Offerpad does not pay closing costs, although their service fee is higher than the typical 6% real estate commission. Remember to set aside 1-3% of the purchase price for closing costs. While your closing costs will vary depending on your location, sellers often pay transfer taxes, administrative fees and title insurance.