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FTC takes action to stop Opendoor from cheating potential sellers

233 points by tareqak 4y ago

jmole 4y ago
"The order requires Opendoor to pay the Commission $62 million, which is expected to be used for consumer redress." What does the FTC actually do with the money in cases like these? Give it to harmed consumers?
- newfonewhodis 4y ago
  Yes. > which is expected to be used for consumer redress
  - nickff 4y ago
    I believe the parent is asking whether that money actually makes it to the victims. Many government agencies fail to execute on their commitments, it would be unsurprising if the FTC simply held on to the money, and never returned it.
tiahura 4y ago
Wait, you mean I shouldn’t take the first offer I get just because they say it’s the best? The next thing we’re going to learn is that there really isn’t someone coming in later who’s super interested in the used Honda. This seems overly nannyish.
- leereeves 4y ago
  Fraud is still fraud even if a reasonable person shouldn't trust the claims.
  - avg_dev 4y ago
    Simple as that. > According to the FTC, Opendoor said it would pay market value for people’s homes while saving them money on costs. That way, people selling their homes would make thousands of dollars more than they would on the open market. But, the FTC says, it wasn’t true.
    - teraflop 4y ago
      And most importantly (according to the complaint), Opendoor knew it wasn't true. They were deliberately adjusting offer prices downward from their own estimated market value, and they had lots of internal data showing that the result was that customers made less money by selling to Opendoor, but they continued to say the opposite in their marketing materials.
  - SQueeeeeL 4y ago
    Yeah, literally who says it's "nannyish" that blatantly lying to consumers is wrong. Holding businesses to any kinds of standards is wrong I guess. Actual dystopian vibes.
- felipesoc 4y ago
  It's false advertising whether nannyish or not.
- CobrastanJorji 4y ago
  Making a bad deal is perfectly legal. Lying about the product you're offering is not. OpenDoor was reportedly making several false claims, including "we make money from fees (and not by immediately reselling your house for a profit because we bought it below market value)" or "we charge about the same in repair costs as you'd pay on the open market" or "we buy your house at market value (and not intentionally below what we think is market value)."
  - londons_explore 4y ago
    OpenDoors crime wasn't making those claims... the crime was making those claims without keeping sufficient evidence that they were true. I'm sure they could have proven all those claims. They could have said "Last year we made $XX Million from fees". Sounds like a big number, but might still have only been tiny compared to market movements. They could have said "we charge about the same in repair costs as you'd pay on the open market" by just finding one quote from a builder to back it up. They could have said "we buy your house at market value" by just having a model of market value which tended to lowball valuations - rather than having an accurate model and then putting a " * 0.9" on the output of the model. One way to do that for example would be to build the model on historic data, and ignore the fact that house prices are at all time highs right now. And house prices have been the 'highest ever' for nearly every year in the past 200 years.
    - Jorge1o1 4y ago
      Yes and no. It goes beyond lack of data and well into fraud (knowing deception). See, for example, point 34 of the report: >Opendoor has used an automated system to generate expected market values for homes. In many instances, Opendoor’s employees have manually adjusted these values before presenting them to consumers as offers. Opendoor’s internal analyses showed that these manually adjusted offers were several percentage points below Opendoor’s assessment of market value. Beginning later than 2019, Opendoor instituted a policy to reduce its manually adjusted offers to [REDACTED] below what Opendoor assessed as market value. In other words, they’re promising above-market value while actually quoting below even their OWN estimation of market value (which is undoubtedly revised down)
flerchin 4y ago
They somehow still lost $661M last year.
- mperham 4y ago
  Of course. Gotta write off the entire grift so they pay no taxes.
TuringNYC 4y ago
>> Instead, the FTC says Opendoor’s offers were lower than a home’s market value, and the company asked sellers to pay for home repair costs that were higher than what people would typically spend on repairs in a market sale. As a result, most people who sold their homes to Opendoor typically lost thousands of dollars compared to what they would have made if they’d sold their homes on the open market. I'm sympathetic to Opendoor on this. Are they counting ALL the costs when they say Opendoor customers "lost thousands"? - Are they counting the carry of keeping [a potentially empty house] on the market for months? (e.g., real estate taxes, maintenance fees) - Are they counting the 4-6% real estate real estate commission the agent would take that Opendoor customers arent paying? If I sell the house at a 20k discount to Opendoor, but save a $40k real estate commission, that sounds like a good deal.
- fny 4y ago
  You're missing the point... they did all that while promising "you’d make more money selling it to them than you would on the open market". That's the issue.
  - revnode 4y ago
    He's not missing the point, he's outright saying that statement is true because of the reasons he gave?
  - TuringNYC 4y ago
    >>promising "you’d make more money selling it to them than you would on the open market". If they were literally "promising" more money, that would be a big issue. When I saw Opendoor, it seemed to essentially be a Market Order for home selling. The promise was immediacy and the trade-off was lower-price. However, the immediacy also carried savings w/r/t not having to carry the property costs. So it could actually end up being a better deal to sell immediately depending on carry costs. I was just sad to see such a thin letter lacking details.
- chadash 4y ago
  > Are they counting the 4-6% real estate real estate commission the agent would take that Opendoor customers arent paying? your overall point stands, but Opendoor does have a 5% "service charge" that's on par with an agent commission.
notacoward 4y ago
Opendoor got $1.9B in funding for this business model. In ten rounds. Did none of those VCs do anything approximating due diligence? Or did they do it and just not care that it was basically an AI-washed version of a very old con? Seems like there was more than one act of malfeasance here.
- xfour 4y ago
  What's the very old con?
  - notacoward 4y ago
    It's basically Pressure Tactics 101. Claim (without a shred of proof) that you have a magic key to lower costs. Create a false sense of urgency to close the deal right now or miss out. (That one should be familiar to anyone who has shopped online in the last decade BTW, and I'll bet more than a few of you have implemented it.) You can do it with any kind of asset, really, but houses are big assets and the process is more complex/opaque than most so they're a perennial favorite. If somebody could truly make buying or selling a home that much better, you wouldn't hear about it by them coming to you.
- tomrod 4y ago
  Not sure what the "very old con" is, but the notion of AI-washing bad behaviors (e.g. predatory practices) is a fascinatingly succinct way to describe a lot of vaporware or similar issues "AI" promises. I work in the space -- I'll be using this. Thanks for the encapsulation!
- dragonwriter 4y ago
  > Opendoor got $1.9B in funding for this business model. In ten rounds. Did none of those VCs do anything approximating due diligence? Or did they do it and just not care that it was basically an AI-washed version of a very old con? “Brazenly breaking the law in a way that probably won't get cracked down on until after we’ve made a profitable exit” doesn't seem to business model VCs are at all loathe to fund.
slickdork 4y ago
per the article, they were fined 62 million for (years of?) fraud. Their 2021 profit alone was 730 million (on 8 billion revenue).[1] When the fine is less than 9 percent of one years profit, will they really stop doing what they're doing? edit: a lot of people are saying the company actually lost money. But, and this is an honest question, is it really 'losing money' when the majority of that loss is "primarily driven by non-cash stock based compensation of $536 million"? Looking at previous compensation tables, it looks like the top four people in the company are earning 100+ million in stocks? Is that what's making the company be considered in the red? [2] [1]https://investor.opendoor.com/news-releases/news-release-details/opendoor-announces-fourth-quarter-and-full-year-2021-financial https://investor.opendoor.com/news-releases/news-release-det... [2] https://investor.opendoor.com/node/8201/html#tEC https://investor.opendoor.com/node/8201/html#tEC
- fshbbdssbbgdd 4y ago
  It depends on how much money they made on the fraud divided by the probability of getting caught. The company’s entire profit isn’t really relevant. According to your link the company actually lost money. So if the fine should be proportional to the company’s profit, the government should be paying Opendoor?
  - grenoire 4y ago
    So what, they should be able to give fraud another go?
    - fshbbdssbbgdd 4y ago
      Is the counter-proposal that if some part of any company commits fraud, the company should be shut down, everyone who works there should become unemployed, and anyone who depends on company’s product should go without? To me it seems more reasonable to set the penalties at a level that’s high enough to deter violations. To make that calculation, the main inputs should be how much money they can make from the violation and how likely they are to get caught. Other profits the company made that weren’t from fraud are irrelevant. (or in this case, losses, since we are discussing an unprofitable company)
lewdev 4y ago
Curious, how would a company buy properties at supposedly higher than market prices earn a profit? Do they just want to accumulate equity?
- bena 4y ago
  Because the market changes. I bought a house recently and according to Zillow, I'm technically up about 10% of the purchase price just 18 months later.
- ceeplusplus 4y ago
  Theoretically, you're picking off improperly priced homes and quoting a tighter buy/sell spread, so you aren't buying higher than the "market" price. The seller/buyer is the one crossing the spread. In practice it seems like something isn't properly hedged so Opendoor and a lot of other iBuyers are exposed to the underlying asset rather than just capturing the spread and picking off incorrectly priced homes. That's why you see their margins go up when housing does well and down when housing does poorly. A proper market maker should have no exposure to the underlying (e.g. market makers made record profits in 2020 despite equities tanking). I bet if a Wall Street quant firm came in they'd roll over Opendoor and the like.
  - TheCoelacanth 4y ago
    I bet Wall Street quant firms don't operate on individual houses for a reason, because it's too illiquid and non-fungible for someone to be a proper market maker.
    - abriosi 4y ago
      =) I bet the best performing and consistent market makers have a sense of the uncertainty of the direction
- dragonwriter 4y ago
  Well, in Opendoor’s claimed business model, they did that through separately-disclosed fees that they charged, not the purchase price.
scottydelta 4y ago
Opendoor technologies(OPEN) is currently trading at $4.79, way below their all time high of $35.88 back in Feb 2021. They went public via SPAC merger with IPOB on Dec 18, 2020. Some might say that they are not doing very good.
- onlyrealcuzzo 4y ago
  They aren't doing very good for who? Obviously the other person on the opposite side of that trade is doing very good.
  - dapids 4y ago
    He didn't say who. He said for they/them, the company.
fiprofessor 4y ago
It might better to link to directly to the FTC press release (https://www.ftc.gov/news-events/news/press-releases/2022/08/ftc-takes-action-stop-online-home-buying-firm-opendoor-labs-inc-cheating-potential-sellers https://www.ftc.gov/news-events/news/press-releases/2022/08/...) instead of the FTC "Consumer Alert" that is currently linked at the time I post this comment. The "Consumer Alert" is written at a bit of a simplified level, and I think this audience might benefit from the more precise statement of the alleged issue that is in the press release.
- tareqak 4y ago
  For posterity, here is the original headline and the original link: Closing the door on home buying company Opendoor’s false claims https://consumer.ftc.gov/consumer-alerts/2022/08/closing-door-home-buying-company-opendoors-false-claims https://consumer.ftc.gov/consumer-alerts/2022/08/closing-doo... . Update: Sorry, I can't change the URL since it has been over an hour long since I made the original post. Changing the headline alone would be confusing/misleading.
- dang 4y ago
  Ok, changed from https://consumer.ftc.gov/consumer-alerts/2022/08/closing-door-home-buying-company-opendoors-false-claims https://consumer.ftc.gov/consumer-alerts/2022/08/closing-doo.... Thanks!
oh_my_goodness 4y ago
Xcelerate 4y ago
So how is the FTC determining the counterfactual of what the homes would have sold for on the open market?
- trts 4y ago
  Good question. > In fact, the complaint states, the vast majority of consumers who sold to Opendoor actually lost thousands of dollars compared with selling on the traditional market, because [1]the company’s offers have been below market value on average and [2]its costs have been higher than what consumers typically pay when using a traditional realtor. My understanding of Opendoor is that their product specifically targets homes in the low to mid range of the price distribution, making it easier for them to have a high-quality prediction on whether acquiring a home can be profitable to them. for [1] this almost surely means they will be below market on average, since the upper-bound is unconstrained. Home prices follow a log-normal distribution. [2] sounds worse. A typical agent-driven transaction is between 4.5% and 6% of the sale price. For Opendoor to be pocketing _more_ than this is a pretty bad value prop. However, even granting that this is the case -- there is some premium that certain home sellers may place on just washing their hands of the whole process, handing their keys to Opendoor and getting a check next week. That seems fine to me, but not if Opendoor are claiming otherwise.
  - jacquesm 4y ago
    > A typical agent-driven transaction is between 4.5% and 6% of the sale price. Which is completely ridiculous.
    - Apocryphon 4y ago
      And Opendoor is pocketing more than that!
    - happyopossum 4y ago
      It may sound ridiculous to you, but those numbers aren’t codified by law, and anyone who wants to change that is more than able to try. There have been tons of efforts to do so - some very heavily capitalized, but none of those companies have ever really taken off.
babycake 4y ago
So do sellers who got scammed by Opendoor get any kind of reimbursement? Or does FTC dust off their hands and call it a day?
- dragonwriter 4y ago
  From the release: “To settle the FTC’s charges that the company’s claims were deceptive, Opendoor has agreed to pay $62 million, which the FTC will use for refunds to people who were affected.”
- rideontime 4y ago
  There's a link at the top of this page which answers this question!
tonymet 4y ago
Economics has long understood the strength pricing signals have to skew markets. I think a lot of the growth in real estate have been these phony buyer and pricing platforms (open door, zillow & redfin). Sellers are constantly being bombarded with pricing signals about their house, even when off market. And because they are "algorithmic", sellers trust them more than a listing agent. A good example study followed pricing when a city set a cap on Payday loans that was higher than the average market rate. Once the cap went into effect, all of the lenders below the cap moved their rates up to the cap. You see this with Cars & Kelly Blue book as well. All of these pricing signals skew the market and should be banned.
- rossdavidh 4y ago
  Well, "pricing signals" skewing markets is what is supposed to happen, that's also how a healthy market works. As a counterexample, opacity in the labor market has long allowed employers to underpay, because most of their labor force don't realize what the pushy few who demand a raise are getting. I have also been able to get a better price on cars (not this year, but in normal car markets) by making it obvious to the dealer that I was looking at the Kelly Blue Book, so that they didn't think I would be willing to pay more than that. Removing price signals typically provides more power to the larger party, that does more transactions in that market, and thus has a large advantage in knowledge of price. The issue here wasn't that Opendoor had pricing signals, but rather that they were lying about what those market prices were.
  - TedDoesntTalk 4y ago
    > “pricing signals" skewing markets is what is supposed to happen Only if the signals are accurate. Zillow calculates value based on comps in the same zip code since the range of properties in a zip code can vary tremendously. This is ridiculous in many zip codes. Ask any realtor what they think of “Zestimates”. You’ll get an earful.
    - rossdavidh 4y ago
      Oh, I'm sure it's flawed. However, their AI-generated prices did tell them to get out of the market, and despite their stated reasons at the time it looks like they decided to leave the home-buying business suspiciously close to the top.
daoist_shaman 4y ago
We desperately need a ban on real estate being used as an investment vehicle. This isn't a game. We all need a place to live. We all share this planet. We won't be able to do that anymore when all of the habitable land is owned by the 0.1% of plutocrats.
- namdnay 4y ago
  the problem is that the majority of active voters are using real estate as an investment vehicle. convincing an investor in X to ban investment in X is pretty tricky ...
  - Melatonic 4y ago
    That can be a very different scenario though - a family using one (or even multiple) properties as investment vehicles that they are themselves residing in (even if its just part of the year) does not seem unethical at all to me. Foreign investors who are not planning to even live on the property nor rent it out at all? Definitely a crapshoot. It is a small overall percentage of the pie but every bit counts. And giant corporations scooping up tons of single family homes and small apartment complexes is maybe even scarier. Lets face it though - there's a separate problem and it is pretty simple - we just need more housing in places where the demand is high. Personally I think it would be especially helpful in the short term if there were big incentives for individuals to ADU's or inlaw units and things like duplexes, triplexes, or "bungalows" on one property. Easy sell for the public and would open up all of the single family home zones to much more housing and maybe even incentivize families across generations to live together again.
    - dapids 4y ago
      a small overall percentage? More than one third of Vancouver Canada's real-estate is foreign owned.
      - umeshunni 4y ago
        That sounds exaggerated. https://www.theglobeandmail.com/opinion/editorials/article-are-foreign-owners-of-empty-homes-to-blame-for-canadas-unaffordable/ https://www.theglobeandmail.com/opinion/editorials/article-a... seems to say 2-6% https://blog.remax.ca/are-foreign-buyers-still-purchasing-vancouver-real-estate/ https://blog.remax.ca/are-foreign-buyers-still-purchasing-va... says 1.4% in 2020.
1024core 4y ago
> Those charts almost always showed that consumers would make thousands of dollars more by selling to Opendoor. If Opendoor is paying more than what you'd get in the open market, where are they going to make the money from? Aren't they going to lose money on every deal then? There's the old adage: if it sounds too good to be true, it usually is.
- tempsy 4y ago
  I thought the trade off was largely understood by the seller eg you take a small discount in exchange for a very fast and reliable sales process where you can sell to Opendoor in days vs weeks/months in a traditional sales process?
- chrismcb 4y ago
  If they cut out the real estate fees, yeah you can make (save?) More money by selling to them. And they can still turn a profit... A portion of the profit the real estate agents would have made.
gist 4y ago
Separate point what's with the tendency other than to try and impress and mislead in some way to use 'Labs' (ie Opendoor Labs) in your business name when what you are doing has nothing to do at all with the traditional definition of a laboratory. (I know others do this as well.)
keyboardclicker 4y ago
Check this out: the "Head of Brand Marketing" for Opendoor, Kyle Tibbitts[0], left a few years ago to be the Head of Marketing at Fast.co[1], another scam that imploded. Right before Fast collapsed, he left to join a new real estate startup, wander.com[2], which is now launching a real estate investment vehicle, "Wander Atlas"[3], to stay afloat. The marketing page says they are "Democratizing access to the private market behind Wander". The guy is 2/3 on scams... with a good chance of landing 3/3 in due time. [0]: https://www.linkedin.com/in/kyletibbitts https://www.linkedin.com/in/kyletibbitts [1]: https://news.ycombinator.com/item?id=30922981 https://news.ycombinator.com/item?id=30922981 [2]: https://www.wander.com https://www.wander.com [3]: https://www.wander.com/atlas https://www.wander.com/atlas
- newfonewhodis 4y ago
  I'm equally curious about the board and the C-level staff.
kadomony 4y ago
I'd rather housing in the US follow Japan's model and depreciate to a value of nothing over 30 years. Why? It'd drive investment into other avenues, keep commodities cost low, and get more people into houses. The current housing market is stupid. -A disgruntled millennial who despite great savings can't afford anything
- TedDoesntTalk 4y ago
  > A disgruntled millennial who despite great savings can't afford anything I’m sorry for your experience. I’m Gen X and can’t imagine how frustrating this must be for you.
  - throwaway5959 4y ago
    It really makes you wonder how anyone is buying a house when you make 6x the national income and it’s still almost a third of take home to buy.
    - jc_811 4y ago
      As a millennial, I think it’s a dirty/open secret that a large majority of our generation who are able to afford buying are getting help from their boomer parents. It worries me that this is just further driving inequality and creating an even greater separation between haves and have-nots
      - throwaway5959 4y ago
        It definitely is. I’m seeing this as well in the LA area.
- endisneigh 4y ago
  How much savings do you have? I bet you can afford something. Usually when people say this, in my experience, it means they have some set of arbitrary requirements that aren't being fulfilled. That's fair enough, but you can afford something.
ketchupdebugger 4y ago
literally just watched a youtube vid explaining Opendoor's scam. https://youtu.be/nXcz6CHDtwo https://youtu.be/nXcz6CHDtwo
thr0wawayf00 4y ago
> The Federal Trade Commission today took action against online home buying firm Opendoor Labs Inc., for cheating potential 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. Serious question: why are businesses like this allowed to continue after getting caught lying to prospective customers? These founders should be dragged into court and ruined over this. No excuse for this kind of behavior.
- deleted 4y ago
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- MisterBastahrd 4y ago
  There are a few stated benefits of Opendoor in their ads that would probably be completely fine if sold to customers in that manner. 1. They claim that their ability to make an all-cash offer on your current house allows you to turn around quicker to make an offer on another home without struggling through a ton of financing issues. 2. They claim that once they've purchased the home, they will assume all responsibility for repairs and cleaning. 3. They claim that in the event that the company sells the home for greater than the estimated value, they will give you the difference. None of these are bad. But if someone came to you and told you that they'd sell you the home for cash and take a little bit more off the top for inspection / repairs, I think that mortgages are so long that some people would rather do that than deal with all the headaches otherwise.
exogeny 4y ago
Rabois is a founder and on the board of an unethical, scammy company? Surely you jest! He seems like such a great guy!
- Apocryphon 4y ago
  Feels like he's directly trying to hawk Miami beachfront property these days.
trixie_ 4y ago
I'm hopeful that Opendoor can make home buying/selling as quick and easy as Carvana has made buying and selling cars. I think key to that is to ensure they minimize the amount of time they hold any property. Don't try to make money on the long term movements of the market. Just buy the house at a slight discount by saving on realtor and closing cost fees and do the same on the buy side - turn it around fast, low profit margin, but at national scale. That could be a recipe for success, but yea they need to be honest that there's no guarantee their offer is better than the open market because you never know. It's up to the seller to make that judgement call. I have many friends who were able to sell quick with Opendoor, full well knowing they were potentially losing some money in exchange for convenience. That's ok if we're all honest about it.
- dlandis 4y ago
  Haha carvana is banned in Illinois and under investigation in a bunch of other states due to their shady practices.
  - trixie_ 4y ago
    When you scale up you expose the inefficiencies of existing systems, like title transfers across states. Even if not statistically different from normal dealerships, the numbers are greater because Carvana sells so many more cars. Anyways, looks like they're allowed to sell cars again as it gets figured out. Not shady at all when you actually understand what is going on. Just like this relatively small FTC fine for Opendoor. https://www.fox32chicago.com/news/carvana-can-do-business-in-illinois-again-after-judge-orders-temporary-reprieve https://www.fox32chicago.com/news/carvana-can-do-business-in...
Apocryphon 4y ago
Wonder what Keith Rabois is gonna say in response to this.
mensetmanusman 4y ago
Isn’t this what realtors do when they sell properties they don’t own? Statistics have shown they sell for lower prices to increase throughput and sales compared to when they sell their own properties…
- balozi 4y ago
  Maybe I am misunderstanding this comment, but is it a common occurrence for realtors to sell properties they don’t own?
  - tzs 4y ago
    By "sell properties they don't own" he was referring to the case where a non-realtor property owner wishes to sell but doesn't want to deal with conducting the sale themselves, and so hires a realtor to sell the property for them for a commission.
  - joebob42 4y ago
    I think as in real estate agents helping you sell your house vs selling their own house?
- deleted 4y ago
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balozi 4y ago
Seems like low hanging fruit for any aspiring attorney general in almost any part of the country.
rurp 4y ago
I bought a house last year in a very active market and briefly looked at OpenDoor listings, but was not at all impressed with the company. I love the idea of being able to buy/view/sell a home without dealing with a realtor, but my experience with Opendoor was rough and something about the company was off-putting. I'm not surprised about the headline complaint here, but this detail shocked me: > its costs have been higher than what consumers typically pay when using a traditional realtor Really?! Beating the seller costs of a traditional realtor in the US is an incredibly low bar. Creating a tech solution that costs even more is absurd.
- slimsag 4y ago
  My brother bought a house recently, they placed a strong offer on an OpenDoor home and they heard back the next day saying they had a higher offer by almost 20%. So, they said no worries - we'll go with a different home then. OpenDoor allegedly came back immediately with "wait wait wait! the other offer actually fell through, so you got the home!" Pretty sketchy stuff.
  - qqqwerty 4y ago
    FWIW, as much hate as realtors get for their high fees, in theory shenanigans like this are harder to pull off when using them because usually the selling and buying agents share a network and are incentivized to deal with each other somewhat honestly. Also, because each agent only get a 2.5-3% of the sale, they are not as sensitive to the final selling price as the owner. For example if the house in question was originally offered at $1M, 20% over asking would be $200k. The selling agent would only pocket $5-6k more. Nice to have, but not necessarily enough to risk their reputation. On the other hand, because OpenDoor is the owner of the property. Negotiating a 20% increase means they pocket the full 20%. So they have a strong incentive to be dishonest here. At the very least, I would expect them to push the law to its limits when trying to negotiate the selling price upwards.
abriosi 4y ago
I have always thought that the way west societies use real estate ties people into a societal contract which obliges them to work in less than ideal conditions. If you don't come from a wealthy family you need to get at least a 30 year loan. The moment you get a 30 year loan you have enormous pressure to generate income every month and will accept non ideal conditions. Essentially, by getting debt you lose leverage.
tamade 4y ago
Judging from the losses they are taking on short sales, Opendoor seems to have overpaid on the bulk of their home inventory. Ironic to get penalized for deceptive practices, but not actually profit from them.
- dragonwriter 4y ago
  They did profit from the deceptive practices (lying to customers about buying at market rates while systematically doing so significantly below market), it just was dwarfed by the losses from other things they did.
foogazi 4y ago
> Those charts almost always showed that consumers would make thousands of dollars more by selling to Opendoor Isn’t that what every real estate agent claims ?

233 points by tareqak 4y ago

"The order requires Opendoor to pay the Commission $62 million, which is expected to be used for consumer redress." What does the FTC actually do with the money in cases like these? Give it to harmed consumers?

newfonewhodis 4y ago
Yes. > which is expected to be used for consumer redress
- nickff 4y ago
  I believe the parent is asking whether that money actually makes it to the victims. Many government agencies fail to execute on their commitments, it would be unsurprising if the FTC simply held on to the money, and never returned it.

tiahura 4y ago

Wait, you mean I shouldn’t take the first offer I get just because they say it’s the best? The next thing we’re going to learn is that there really isn’t someone coming in later who’s super interested in the used Honda. This seems overly nannyish.

leereeves 4y ago
Fraud is still fraud even if a reasonable person shouldn't trust the claims.
- avg_dev 4y ago
  Simple as that. > According to the FTC, Opendoor said it would pay market value for people’s homes while saving them money on costs. That way, people selling their homes would make thousands of dollars more than they would on the open market. But, the FTC says, it wasn’t true.
  - teraflop 4y ago
    And most importantly (according to the complaint), Opendoor knew it wasn't true. They were deliberately adjusting offer prices downward from their own estimated market value, and they had lots of internal data showing that the result was that customers made less money by selling to Opendoor, but they continued to say the opposite in their marketing materials.
- SQueeeeeL 4y ago
  Yeah, literally who says it's "nannyish" that blatantly lying to consumers is wrong. Holding businesses to any kinds of standards is wrong I guess. Actual dystopian vibes.
felipesoc 4y ago
It's false advertising whether nannyish or not.
CobrastanJorji 4y ago
Making a bad deal is perfectly legal. Lying about the product you're offering is not. OpenDoor was reportedly making several false claims, including "we make money from fees (and not by immediately reselling your house for a profit because we bought it below market value)" or "we charge about the same in repair costs as you'd pay on the open market" or "we buy your house at market value (and not intentionally below what we think is market value)."
- londons_explore 4y ago
  OpenDoors crime wasn't making those claims... the crime was making those claims without keeping sufficient evidence that they were true. I'm sure they could have proven all those claims. They could have said "Last year we made $XX Million from fees". Sounds like a big number, but might still have only been tiny compared to market movements. They could have said "we charge about the same in repair costs as you'd pay on the open market" by just finding one quote from a builder to back it up. They could have said "we buy your house at market value" by just having a model of market value which tended to lowball valuations - rather than having an accurate model and then putting a " * 0.9" on the output of the model. One way to do that for example would be to build the model on historic data, and ignore the fact that house prices are at all time highs right now. And house prices have been the 'highest ever' for nearly every year in the past 200 years.
  - Jorge1o1 4y ago
    Yes and no. It goes beyond lack of data and well into fraud (knowing deception). See, for example, point 34 of the report: >Opendoor has used an automated system to generate expected market values for homes. In many instances, Opendoor’s employees have manually adjusted these values before presenting them to consumers as offers. Opendoor’s internal analyses showed that these manually adjusted offers were several percentage points below Opendoor’s assessment of market value. Beginning later than 2019, Opendoor instituted a policy to reduce its manually adjusted offers to [REDACTED] below what Opendoor assessed as market value. In other words, they’re promising above-market value while actually quoting below even their OWN estimation of market value (which is undoubtedly revised down)

flerchin 4y ago

They somehow still lost $661M last year.

mperham 4y ago
Of course. Gotta write off the entire grift so they pay no taxes.

TuringNYC 4y ago

>> Instead, the FTC says Opendoor’s offers were lower than a home’s market value, and the company asked sellers to pay for home repair costs that were higher than what people would typically spend on repairs in a market sale. As a result, most people who sold their homes to Opendoor typically lost thousands of dollars compared to what they would have made if they’d sold their homes on the open market. I'm sympathetic to Opendoor on this. Are they counting ALL the costs when they say Opendoor customers "lost thousands"? - Are they counting the carry of keeping [a potentially empty house] on the market for months? (e.g., real estate taxes, maintenance fees) - Are they counting the 4-6% real estate real estate commission the agent would take that Opendoor customers arent paying? If I sell the house at a 20k discount to Opendoor, but save a $40k real estate commission, that sounds like a good deal.

fny 4y ago
You're missing the point... they did all that while promising "you’d make more money selling it to them than you would on the open market". That's the issue.
- revnode 4y ago
  He's not missing the point, he's outright saying that statement is true because of the reasons he gave?
- TuringNYC 4y ago
  >>promising "you’d make more money selling it to them than you would on the open market". If they were literally "promising" more money, that would be a big issue. When I saw Opendoor, it seemed to essentially be a Market Order for home selling. The promise was immediacy and the trade-off was lower-price. However, the immediacy also carried savings w/r/t not having to carry the property costs. So it could actually end up being a better deal to sell immediately depending on carry costs. I was just sad to see such a thin letter lacking details.
chadash 4y ago
> Are they counting the 4-6% real estate real estate commission the agent would take that Opendoor customers arent paying? your overall point stands, but Opendoor does have a 5% "service charge" that's on par with an agent commission.

notacoward 4y ago

Opendoor got $1.9B in funding for this business model. In ten rounds. Did none of those VCs do anything approximating due diligence? Or did they do it and just not care that it was basically an AI-washed version of a very old con? Seems like there was more than one act of malfeasance here.

xfour 4y ago
What's the very old con?
- notacoward 4y ago
  It's basically Pressure Tactics 101. Claim (without a shred of proof) that you have a magic key to lower costs. Create a false sense of urgency to close the deal right now or miss out. (That one should be familiar to anyone who has shopped online in the last decade BTW, and I'll bet more than a few of you have implemented it.) You can do it with any kind of asset, really, but houses are big assets and the process is more complex/opaque than most so they're a perennial favorite. If somebody could truly make buying or selling a home that much better, you wouldn't hear about it by them coming to you.
tomrod 4y ago
Not sure what the "very old con" is, but the notion of AI-washing bad behaviors (e.g. predatory practices) is a fascinatingly succinct way to describe a lot of vaporware or similar issues "AI" promises. I work in the space -- I'll be using this. Thanks for the encapsulation!
dragonwriter 4y ago
> Opendoor got $1.9B in funding for this business model. In ten rounds. Did none of those VCs do anything approximating due diligence? Or did they do it and just not care that it was basically an AI-washed version of a very old con? “Brazenly breaking the law in a way that probably won't get cracked down on until after we’ve made a profitable exit” doesn't seem to business model VCs are at all loathe to fund.

slickdork 4y ago

per the article, they were fined 62 million for (years of?) fraud. Their 2021 profit alone was 730 million (on 8 billion revenue).[1] When the fine is less than 9 percent of one years profit, will they really stop doing what they're doing? edit: a lot of people are saying the company actually lost money. But, and this is an honest question, is it really 'losing money' when the majority of that loss is "primarily driven by non-cash stock based compensation of $536 million"? Looking at previous compensation tables, it looks like the top four people in the company are earning 100+ million in stocks? Is that what's making the company be considered in the red? [2] [1]https://investor.opendoor.com/news-releases/news-release-details/opendoor-announces-fourth-quarter-and-full-year-2021-financial https://investor.opendoor.com/news-releases/news-release-det... [2] https://investor.opendoor.com/node/8201/html#tEC https://investor.opendoor.com/node/8201/html#tEC

fshbbdssbbgdd 4y ago
It depends on how much money they made on the fraud divided by the probability of getting caught. The company’s entire profit isn’t really relevant. According to your link the company actually lost money. So if the fine should be proportional to the company’s profit, the government should be paying Opendoor?
- grenoire 4y ago
  So what, they should be able to give fraud another go?
  - fshbbdssbbgdd 4y ago
    Is the counter-proposal that if some part of any company commits fraud, the company should be shut down, everyone who works there should become unemployed, and anyone who depends on company’s product should go without? To me it seems more reasonable to set the penalties at a level that’s high enough to deter violations. To make that calculation, the main inputs should be how much money they can make from the violation and how likely they are to get caught. Other profits the company made that weren’t from fraud are irrelevant. (or in this case, losses, since we are discussing an unprofitable company)

lewdev 4y ago

Curious, how would a company buy properties at supposedly higher than market prices earn a profit? Do they just want to accumulate equity?

bena 4y ago
Because the market changes. I bought a house recently and according to Zillow, I'm technically up about 10% of the purchase price just 18 months later.
ceeplusplus 4y ago
Theoretically, you're picking off improperly priced homes and quoting a tighter buy/sell spread, so you aren't buying higher than the "market" price. The seller/buyer is the one crossing the spread. In practice it seems like something isn't properly hedged so Opendoor and a lot of other iBuyers are exposed to the underlying asset rather than just capturing the spread and picking off incorrectly priced homes. That's why you see their margins go up when housing does well and down when housing does poorly. A proper market maker should have no exposure to the underlying (e.g. market makers made record profits in 2020 despite equities tanking). I bet if a Wall Street quant firm came in they'd roll over Opendoor and the like.
- TheCoelacanth 4y ago
  I bet Wall Street quant firms don't operate on individual houses for a reason, because it's too illiquid and non-fungible for someone to be a proper market maker.
  - abriosi 4y ago
    =) I bet the best performing and consistent market makers have a sense of the uncertainty of the direction
dragonwriter 4y ago
Well, in Opendoor’s claimed business model, they did that through separately-disclosed fees that they charged, not the purchase price.

scottydelta 4y ago

Opendoor technologies(OPEN) is currently trading at $4.79, way below their all time high of $35.88 back in Feb 2021. They went public via SPAC merger with IPOB on Dec 18, 2020. Some might say that they are not doing very good.

onlyrealcuzzo 4y ago
They aren't doing very good for who? Obviously the other person on the opposite side of that trade is doing very good.
- dapids 4y ago
  He didn't say who. He said for they/them, the company.

fiprofessor 4y ago

It might better to link to directly to the FTC press release (https://www.ftc.gov/news-events/news/press-releases/2022/08/ftc-takes-action-stop-online-home-buying-firm-opendoor-labs-inc-cheating-potential-sellers https://www.ftc.gov/news-events/news/press-releases/2022/08/...) instead of the FTC "Consumer Alert" that is currently linked at the time I post this comment. The "Consumer Alert" is written at a bit of a simplified level, and I think this audience might benefit from the more precise statement of the alleged issue that is in the press release.

tareqak 4y ago
For posterity, here is the original headline and the original link: Closing the door on home buying company Opendoor’s false claims https://consumer.ftc.gov/consumer-alerts/2022/08/closing-door-home-buying-company-opendoors-false-claims https://consumer.ftc.gov/consumer-alerts/2022/08/closing-doo... . Update: Sorry, I can't change the URL since it has been over an hour long since I made the original post. Changing the headline alone would be confusing/misleading.
dang 4y ago
Ok, changed from https://consumer.ftc.gov/consumer-alerts/2022/08/closing-door-home-buying-company-opendoors-false-claims https://consumer.ftc.gov/consumer-alerts/2022/08/closing-doo.... Thanks!

oh_my_goodness 4y ago

Xcelerate 4y ago

So how is the FTC determining the counterfactual of what the homes would have sold for on the open market?

trts 4y ago
Good question. > In fact, the complaint states, the vast majority of consumers who sold to Opendoor actually lost thousands of dollars compared with selling on the traditional market, because [1]the company’s offers have been below market value on average and [2]its costs have been higher than what consumers typically pay when using a traditional realtor. My understanding of Opendoor is that their product specifically targets homes in the low to mid range of the price distribution, making it easier for them to have a high-quality prediction on whether acquiring a home can be profitable to them. for [1] this almost surely means they will be below market on average, since the upper-bound is unconstrained. Home prices follow a log-normal distribution. [2] sounds worse. A typical agent-driven transaction is between 4.5% and 6% of the sale price. For Opendoor to be pocketing _more_ than this is a pretty bad value prop. However, even granting that this is the case -- there is some premium that certain home sellers may place on just washing their hands of the whole process, handing their keys to Opendoor and getting a check next week. That seems fine to me, but not if Opendoor are claiming otherwise.
- jacquesm 4y ago
  > A typical agent-driven transaction is between 4.5% and 6% of the sale price. Which is completely ridiculous.
  - Apocryphon 4y ago
    And Opendoor is pocketing more than that!
  - happyopossum 4y ago
    It may sound ridiculous to you, but those numbers aren’t codified by law, and anyone who wants to change that is more than able to try. There have been tons of efforts to do so - some very heavily capitalized, but none of those companies have ever really taken off.

babycake 4y ago

So do sellers who got scammed by Opendoor get any kind of reimbursement? Or does FTC dust off their hands and call it a day?

dragonwriter 4y ago
From the release: “To settle the FTC’s charges that the company’s claims were deceptive, Opendoor has agreed to pay $62 million, which the FTC will use for refunds to people who were affected.”
rideontime 4y ago
There's a link at the top of this page which answers this question!

tonymet 4y ago

Economics has long understood the strength pricing signals have to skew markets. I think a lot of the growth in real estate have been these phony buyer and pricing platforms (open door, zillow & redfin). Sellers are constantly being bombarded with pricing signals about their house, even when off market. And because they are "algorithmic", sellers trust them more than a listing agent. A good example study followed pricing when a city set a cap on Payday loans that was higher than the average market rate. Once the cap went into effect, all of the lenders below the cap moved their rates up to the cap. You see this with Cars & Kelly Blue book as well. All of these pricing signals skew the market and should be banned.

rossdavidh 4y ago
Well, "pricing signals" skewing markets is what is supposed to happen, that's also how a healthy market works. As a counterexample, opacity in the labor market has long allowed employers to underpay, because most of their labor force don't realize what the pushy few who demand a raise are getting. I have also been able to get a better price on cars (not this year, but in normal car markets) by making it obvious to the dealer that I was looking at the Kelly Blue Book, so that they didn't think I would be willing to pay more than that. Removing price signals typically provides more power to the larger party, that does more transactions in that market, and thus has a large advantage in knowledge of price. The issue here wasn't that Opendoor had pricing signals, but rather that they were lying about what those market prices were.
- TedDoesntTalk 4y ago
  > “pricing signals" skewing markets is what is supposed to happen Only if the signals are accurate. Zillow calculates value based on comps in the same zip code since the range of properties in a zip code can vary tremendously. This is ridiculous in many zip codes. Ask any realtor what they think of “Zestimates”. You’ll get an earful.
  - rossdavidh 4y ago
    Oh, I'm sure it's flawed. However, their AI-generated prices did tell them to get out of the market, and despite their stated reasons at the time it looks like they decided to leave the home-buying business suspiciously close to the top.

daoist_shaman 4y ago

We desperately need a ban on real estate being used as an investment vehicle. This isn't a game. We all need a place to live. We all share this planet. We won't be able to do that anymore when all of the habitable land is owned by the 0.1% of plutocrats.

namdnay 4y ago
the problem is that the majority of active voters are using real estate as an investment vehicle. convincing an investor in X to ban investment in X is pretty tricky ...
- Melatonic 4y ago
  That can be a very different scenario though - a family using one (or even multiple) properties as investment vehicles that they are themselves residing in (even if its just part of the year) does not seem unethical at all to me. Foreign investors who are not planning to even live on the property nor rent it out at all? Definitely a crapshoot. It is a small overall percentage of the pie but every bit counts. And giant corporations scooping up tons of single family homes and small apartment complexes is maybe even scarier. Lets face it though - there's a separate problem and it is pretty simple - we just need more housing in places where the demand is high. Personally I think it would be especially helpful in the short term if there were big incentives for individuals to ADU's or inlaw units and things like duplexes, triplexes, or "bungalows" on one property. Easy sell for the public and would open up all of the single family home zones to much more housing and maybe even incentivize families across generations to live together again.
  - dapids 4y ago
    a small overall percentage? More than one third of Vancouver Canada's real-estate is foreign owned.
    - umeshunni 4y ago
      That sounds exaggerated. https://www.theglobeandmail.com/opinion/editorials/article-are-foreign-owners-of-empty-homes-to-blame-for-canadas-unaffordable/ https://www.theglobeandmail.com/opinion/editorials/article-a... seems to say 2-6% https://blog.remax.ca/are-foreign-buyers-still-purchasing-vancouver-real-estate/ https://blog.remax.ca/are-foreign-buyers-still-purchasing-va... says 1.4% in 2020.

1024core 4y ago

> Those charts almost always showed that consumers would make thousands of dollars more by selling to Opendoor. If Opendoor is paying more than what you'd get in the open market, where are they going to make the money from? Aren't they going to lose money on every deal then? There's the old adage: if it sounds too good to be true, it usually is.

tempsy 4y ago
I thought the trade off was largely understood by the seller eg you take a small discount in exchange for a very fast and reliable sales process where you can sell to Opendoor in days vs weeks/months in a traditional sales process?
chrismcb 4y ago
If they cut out the real estate fees, yeah you can make (save?) More money by selling to them. And they can still turn a profit... A portion of the profit the real estate agents would have made.

gist 4y ago

Separate point what's with the tendency other than to try and impress and mislead in some way to use 'Labs' (ie Opendoor Labs) in your business name when what you are doing has nothing to do at all with the traditional definition of a laboratory. (I know others do this as well.)

keyboardclicker 4y ago

Check this out: the "Head of Brand Marketing" for Opendoor, Kyle Tibbitts[0], left a few years ago to be the Head of Marketing at Fast.co[1], another scam that imploded. Right before Fast collapsed, he left to join a new real estate startup, wander.com[2], which is now launching a real estate investment vehicle, "Wander Atlas"[3], to stay afloat. The marketing page says they are "Democratizing access to the private market behind Wander". The guy is 2/3 on scams... with a good chance of landing 3/3 in due time. [0]: https://www.linkedin.com/in/kyletibbitts https://www.linkedin.com/in/kyletibbitts [1]: https://news.ycombinator.com/item?id=30922981 https://news.ycombinator.com/item?id=30922981 [2]: https://www.wander.com https://www.wander.com [3]: https://www.wander.com/atlas https://www.wander.com/atlas

newfonewhodis 4y ago
I'm equally curious about the board and the C-level staff.

kadomony 4y ago

I'd rather housing in the US follow Japan's model and depreciate to a value of nothing over 30 years. Why? It'd drive investment into other avenues, keep commodities cost low, and get more people into houses. The current housing market is stupid. -A disgruntled millennial who despite great savings can't afford anything

TedDoesntTalk 4y ago
> A disgruntled millennial who despite great savings can't afford anything I’m sorry for your experience. I’m Gen X and can’t imagine how frustrating this must be for you.
- throwaway5959 4y ago
  It really makes you wonder how anyone is buying a house when you make 6x the national income and it’s still almost a third of take home to buy.
  - jc_811 4y ago
    As a millennial, I think it’s a dirty/open secret that a large majority of our generation who are able to afford buying are getting help from their boomer parents. It worries me that this is just further driving inequality and creating an even greater separation between haves and have-nots
    - throwaway5959 4y ago
      It definitely is. I’m seeing this as well in the LA area.
endisneigh 4y ago
How much savings do you have? I bet you can afford something. Usually when people say this, in my experience, it means they have some set of arbitrary requirements that aren't being fulfilled. That's fair enough, but you can afford something.

ketchupdebugger 4y ago

literally just watched a youtube vid explaining Opendoor's scam. https://youtu.be/nXcz6CHDtwo https://youtu.be/nXcz6CHDtwo

thr0wawayf00 4y ago

> The Federal Trade Commission today took action against online home buying firm Opendoor Labs Inc., for cheating potential 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. Serious question: why are businesses like this allowed to continue after getting caught lying to prospective customers? These founders should be dragged into court and ruined over this. No excuse for this kind of behavior.

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MisterBastahrd 4y ago
There are a few stated benefits of Opendoor in their ads that would probably be completely fine if sold to customers in that manner. 1. They claim that their ability to make an all-cash offer on your current house allows you to turn around quicker to make an offer on another home without struggling through a ton of financing issues. 2. They claim that once they've purchased the home, they will assume all responsibility for repairs and cleaning. 3. They claim that in the event that the company sells the home for greater than the estimated value, they will give you the difference. None of these are bad. But if someone came to you and told you that they'd sell you the home for cash and take a little bit more off the top for inspection / repairs, I think that mortgages are so long that some people would rather do that than deal with all the headaches otherwise.

exogeny 4y ago

Rabois is a founder and on the board of an unethical, scammy company? Surely you jest! He seems like such a great guy!

Apocryphon 4y ago
Feels like he's directly trying to hawk Miami beachfront property these days.

trixie_ 4y ago

I'm hopeful that Opendoor can make home buying/selling as quick and easy as Carvana has made buying and selling cars. I think key to that is to ensure they minimize the amount of time they hold any property. Don't try to make money on the long term movements of the market. Just buy the house at a slight discount by saving on realtor and closing cost fees and do the same on the buy side - turn it around fast, low profit margin, but at national scale. That could be a recipe for success, but yea they need to be honest that there's no guarantee their offer is better than the open market because you never know. It's up to the seller to make that judgement call. I have many friends who were able to sell quick with Opendoor, full well knowing they were potentially losing some money in exchange for convenience. That's ok if we're all honest about it.

dlandis 4y ago
Haha carvana is banned in Illinois and under investigation in a bunch of other states due to their shady practices.
- trixie_ 4y ago
  When you scale up you expose the inefficiencies of existing systems, like title transfers across states. Even if not statistically different from normal dealerships, the numbers are greater because Carvana sells so many more cars. Anyways, looks like they're allowed to sell cars again as it gets figured out. Not shady at all when you actually understand what is going on. Just like this relatively small FTC fine for Opendoor. https://www.fox32chicago.com/news/carvana-can-do-business-in-illinois-again-after-judge-orders-temporary-reprieve https://www.fox32chicago.com/news/carvana-can-do-business-in...

Apocryphon 4y ago

Wonder what Keith Rabois is gonna say in response to this.

mensetmanusman 4y ago

Isn’t this what realtors do when they sell properties they don’t own? Statistics have shown they sell for lower prices to increase throughput and sales compared to when they sell their own properties…

balozi 4y ago
Maybe I am misunderstanding this comment, but is it a common occurrence for realtors to sell properties they don’t own?
- tzs 4y ago
  By "sell properties they don't own" he was referring to the case where a non-realtor property owner wishes to sell but doesn't want to deal with conducting the sale themselves, and so hires a realtor to sell the property for them for a commission.
- joebob42 4y ago
  I think as in real estate agents helping you sell your house vs selling their own house?
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balozi 4y ago

Seems like low hanging fruit for any aspiring attorney general in almost any part of the country.

rurp 4y ago

I bought a house last year in a very active market and briefly looked at OpenDoor listings, but was not at all impressed with the company. I love the idea of being able to buy/view/sell a home without dealing with a realtor, but my experience with Opendoor was rough and something about the company was off-putting. I'm not surprised about the headline complaint here, but this detail shocked me: > its costs have been higher than what consumers typically pay when using a traditional realtor Really?! Beating the seller costs of a traditional realtor in the US is an incredibly low bar. Creating a tech solution that costs even more is absurd.

slimsag 4y ago
My brother bought a house recently, they placed a strong offer on an OpenDoor home and they heard back the next day saying they had a higher offer by almost 20%. So, they said no worries - we'll go with a different home then. OpenDoor allegedly came back immediately with "wait wait wait! the other offer actually fell through, so you got the home!" Pretty sketchy stuff.
- qqqwerty 4y ago
  FWIW, as much hate as realtors get for their high fees, in theory shenanigans like this are harder to pull off when using them because usually the selling and buying agents share a network and are incentivized to deal with each other somewhat honestly. Also, because each agent only get a 2.5-3% of the sale, they are not as sensitive to the final selling price as the owner. For example if the house in question was originally offered at $1M, 20% over asking would be $200k. The selling agent would only pocket $5-6k more. Nice to have, but not necessarily enough to risk their reputation. On the other hand, because OpenDoor is the owner of the property. Negotiating a 20% increase means they pocket the full 20%. So they have a strong incentive to be dishonest here. At the very least, I would expect them to push the law to its limits when trying to negotiate the selling price upwards.

abriosi 4y ago

I have always thought that the way west societies use real estate ties people into a societal contract which obliges them to work in less than ideal conditions. If you don't come from a wealthy family you need to get at least a 30 year loan. The moment you get a 30 year loan you have enormous pressure to generate income every month and will accept non ideal conditions. Essentially, by getting debt you lose leverage.

tamade 4y ago

Judging from the losses they are taking on short sales, Opendoor seems to have overpaid on the bulk of their home inventory. Ironic to get penalized for deceptive practices, but not actually profit from them.

dragonwriter 4y ago
They did profit from the deceptive practices (lying to customers about buying at market rates while systematically doing so significantly below market), it just was dwarfed by the losses from other things they did.

foogazi 4y ago

> Those charts almost always showed that consumers would make thousands of dollars more by selling to Opendoor Isn’t that what every real estate agent claims ?