Offerpad Reviews: Unveiling the Pros and Cons of this iBuyer

Offerpad iBuyer Review

Offerpad, as the second-largest iBuyer in the United States, is known for its ability to swiftly present cash offers and expedite the closing process.

However, the real estate market is witnessing escalating interest rates and diminishing home values in 2023. iBuyers, including Offerpad, are inclined to propose offers that fall considerably below the market value.

In such a scenario, consider listing your home on the MLS with flat fee companies like Houzeo. Houzeo can get you up to 100% of your property’s Fair Market Value at a fraction of the cost.

What is Offerpad?

Offerpad LLC operates as an iBuyer following the model of a traditional home flipper. Their strategy is purchasing properties for 70% to 80% of their Fair Market Value (FMV), renovating them, and then selling them for a profit.

Offerpad adheres to strict purchase criteria, limiting the number of homes they acquire. One notable advantage they tout is their ability to close on a property within a swift 8-day timeframe. This sets them apart from Offerpad competitors, who generally take 14 days to close.

Offerpad leverages cutting-edge technology and comprehensive data analytics to formulate their offers. While they rely on advanced algorithms, they also incorporate human expertise in the process.

Real estate experts thoroughly evaluate the cash offers generated by the technology before presenting them to sellers. This meticulous approach ensures that Offerpad never overpays for a property they purchase, keeping their transactions aligned with market values.

Is Offerpad Legit?

Offerpad is a legitimate company established in 2015 under the leadership of Brian Bair. The company’s headquarters are situated in Phoenix, Arizona.

Emulating the path of Opendoor, this iBuyer introduced “Offerpad Express,” a service designed to offer prompt cash to home sellers. During the year 2022, they accomplished the acquisition of 9,034 homes and successfully sold over 10,000 properties.

What Types of Properties Does Offerpad Purchase?

For your home to be eligible for an Offerpad offer, it must adhere to their stringent criteria:

  1. Home Type: Offerpad purchases single-family homes, condos, and townhomes.
  2. Year Built: Only homes constructed after 1960 are considered by this iBuyer.
  3. Valuation: evaluates homes valued up to $1 million.
  4. Maximum Lot Size: Properties larger than 1 acre will not be accepted.

If your home fails to meet any of these criteria or if there are title issues associated with your property, Offerpad will not proceed with buying your house.

How Does Offerpad Work?

Offerpad Express offers home sellers a quick cash offer within 24 hours. Here’s a breakdown of how Offerpad works:

  1. Request an Offer: To begin the process, you’ll need to fill out a brief 3-minute form on the Offerpad website, providing all the necessary details about your property. Optionally, you can also attach photos of your home.
  1. Ask for Your Cash Offer: Within 24 hours, Offerpad will furnish you with a preliminary cash offer for your home. This offer is generated using Offerpad’s exclusive algorithms and is also reviewed by their experts.
  2. Sign the Purchase Agreement: You’ll have 4 days to decide whether to accept or decline Offerpad’s offer. Keep in mind that accepting the offer means signing a contract without knowing the final offer price. In contrast, when selling to Opendoor, you sign the contract after receiving the final offer.
  3. Complete the Inspection: After accepting Offerpad’s offer, they will arrange a house inspection. During the inspection, their representative will assess your property for any water damage, structural issues, and general wear and tear. These factors will influence the final cash offer.
  4. Receive the Final Cash Offer: You have the option to deduct repair costs from the final cash offer or choose to hire an independent contractor to handle the repairs. You’ll need to make this decision within 4 days. If you choose to withdraw from the sale, there’s a 1% cancellation fee.
  5. Select the Closing Date: Offerpad offers flexibility in choosing a closing date, allowing you to select a date up to 60 days in the future. If you need more time, they provide an Extended Stay Program, which enables you to move out 3 days after the closing date at no additional cost.

You can choose a closing date up to 60 days out. 

Selling With Offerpad Flex

With Offerpad Flex, you have the advantage of exploring the open market while having the security of a guaranteed cash offer. Much of the home-selling process remains similar to Offerpad Express, but there are some differences when it comes to an MLS listing. If you choose to list your home on the MLS, you will need to stage it appropriately.

Offerpad provides assistance by offering funds that allow you to make improvements such as painting, updating the flooring, and enhancing fixtures. These upgrades can significantly improve your chances of receiving a better offer from potential buyers.

In the event that your home listed with Offerpad doesn’t attract a reasonable price from buyers, you can still opt for their guaranteed cash offer. However, it’s essential to make a decision within the 60-day timeframe provided.

Does Offerpad Pay Market Value for Your Home?

No, Offerpad does not pay the full 100% of your home’s Fair Market Value. Instead, they adjust their cash offers to align with the current growing buyer’s market. Typically, Offerpad’s initial offer falls within the range of 70% to 80% of a home’s FMV. This amount may decrease further after the home inspection.

The final cash offer made by Offerpad takes into account a 6% service charge, repair charges, and closing costs. As a result, the ultimate value of your house may be much lower than its original value.

If you do not want to manage the repairs yourself, you can engage a contractor to do it. However, if your home requires major repairs, you may have to sell it “as is,” with the repair expenses removed from your final cash offer.

Offerpad Fees

Offerpad operates akin to a house flipper, generating profits in a comparable manner. Their approach involves purchasing homes at reduced prices and subsequently selling them for a profit. When engaging their services, you should be aware of the various Offerpad fees:

  1. A 6% service charge: This fee covers utility expenses and taxes until the home is sold to another buyer.
  2. Seller Closing Costs: Amounting to approximately 1% to 3% of the offer price, these costs are borne by the seller.
  3. Repair Costs If You Sell Your Home “As Is”: These costs typically range from 1% to 2%.

Collectively, these fees add up to an additional charge of approximately 9% to 12% to Offerpad.

Offerpad Reviews

According to 174 reviews on Trustpilot, Offerpad has achieved a rating of 4 out of 5 stars.

Many Offerpad reviews commend them for their prompt cash offers and the flexibility they provide in closing timelines. However, some complaints have been raised about Offerpad’s lowball cash offers and the presence of high service fees in their transactions.

Offerpad Advantages

iBuyers offer distinct advantages compared to traditional home-selling processes. Let’s explore how Offerpad measures up to these expectations:

  1. Instant Cash Offer: Upon providing your property information, Offerpad promptly delivers a preliminary cash offer within 24 hours.
  2. Buy As Is Homes: If your home requires minimal repairs, Offerpad is willing to purchase it as-is, enabling you to avoid upfront repair costs.
  3. Flexible Closing Timeline: Offerpad provides flexibility in choosing a closing date, allowing you to select a date up to 60 days in advance. Furthermore, if you require more time, you have the option to extend the closing date by an additional 3 days.

Offerpad Disadvantages

Offerpad complaints highlight the following drawbacks associated with the company:

  1. Lowball Cash Offer: The final cash offer presented by Offerpad may fall significantly below the property’s Fair Market Value, often ranging around 70% to 80%.
  2. High Additional Fees: When selling your house to Offerpad, you have to cover various additional expenses, including a 6% service fee, repair costs, and closing costs. These fees reduce the total cash amount you receive.
  3. Offerpad Cancellation Fee: Should you decide to back out from the transaction four days before the closing date, Offerpad imposes a 1% cancellation fee. This policy may be frustrating, as sellers essentially pay the company after rejecting their lowball offer.

Offerpad Competitors

If you are looking to sell your house quickly for cash, consider exploring alternatives to Offerpad. Here are three options worth considering:

  1. Houzeo: Houzeo stands as one of the top FSBO websites in America, allowing you to list your home on the MLS within 24 to 48 hours. Through this platform, multiple national and local cash home buyers can make offers on your property, potentially driving up its price. Additionally, with Houzeo, you can receive up to 100% of your home’s Fair Market Value (FMV).
  2. Opendoor: Opendoor is the largest iBuyer in America, providing cash offers for homes in need of minimal repairs. While their usual payment ranges from 70% to 80% of your home’s FMV, they do deduct a 5% service fee, closing costs, and repair expenses from the offer.
  3. HomeVestors: As a cash home buyer franchise, HomeVestors typically offers 50% to 70% of the home’s FMV. However, it’s important to note that they might also deduct repair costs at the time of closing.

Should You Opt for Offerpad?

We do not advise considering Offerpad for your property. The combination of their 6% service charge, repair expenses, and closing costs can result in an additional fee of approximately 9% to 12%. This can diminish your home’s overall value.

Instead, opting for the open market can be a much better alternative to ensure you receive the full 100% value of your home. Using a flat fee MLS service like Houzeo can open doors to various opportunities, potentially leading to receiving a top-dollar cash offer for your property.

Frequently Asked Questions About Offerpad Reviews

1. Who is better Offerpad or Opendoor?

In terms of geographical coverage, user feedback, and services, Opendoor outperforms Offerpad.

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