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Open Door vs. We Buy Houses – Which is Best for You?

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In today’s white-hot real estate market, there are tons of options for homeowners to sell their house for a great price. The question isn’t so much whether it’s possible to sell your house fast, it’s more about finding the right buyer. Looking for a homebuyer with integrity who will give you a fair shake is ultimately what it’s all about. 

New ways of selling your home

The internet changed everything in all aspects of our lives. Where it used to be that you had to either go to a traditional real estate agent to list and sell your home or put an ad in the local paper to sell it yourself, today there are a huge range of options available.

The rise of online home selling means that homeowners can connect with cash buyers all over the United States. It doesn’t matter if you live in Charlotte, North Carolina, or Grand Rapids, Michigan – you can open a search engine and find dozens of potential buyers in an instant. 

Finding out which homebuying company is the best fit for your situation isn’t easy, even with all of these choices available. The average price on the open market isn’t always easy to find. If you rent homes, then you’ll likely run into some issues with buying criteria, even on an all-cash offer.

Decision fatigue

Did you know that it actually takes a lot of brainpower to make decisions? In fact, the huge number of home selling options available can lead to something called decision fatigue. The mental overload that we experience can lead to extra stress, even if the choice seems logical. 

Depending on what time of day you make a decision and what other pressures you have pushing you, the mental stress of it all can have a real effect on what you do. When you’re selling your home, the most important thing is to be dispassionate about it. Coming to the process with an open mind but a sharp sense of the financial ramifications is the best way to get the best deal. 

Selling your home is a major decision that feels like it has serious consequences. What happens if you don’t make the right choice? If you go with the wrong buyer, will you miss out on money? What if you’d just have clicked on that other website or scrolled down to another page? The huge number of choices can make all of the decisions seem impossible to make. 

Research to narrow your options

One great way to combat decision fatigue is to narrow down your options to something that’s manageable. That’s why we’ve pulled down all of the potential cash buyers online to just two, Open Door vs. We Buy Houses. Both of these will give you a cash offer and a quick closing date. Each company’s fee structure is different, but they both have an online form for home sellers.

There’s always the option to go with a random real estate agent. You’ll be likely to get fair market value if you work with a licensed real estate broker, but you’ll also pay real estate agent fees. Local agents are fiercely competitive with other real estate companies, and they’ll always know the estimated retail value of ugly houses. Home sellers in San Antonio, Las Vegas, San Francisco, Dallas Fort Worth, or anywhere in the country can find a local agent.

The traditional home sale involves real estate agent commissions and transaction costs, so your fair market value is just an estimate. The purchase price could be higher or lower, and once local agents with a real estate company add in all the hidden fees, all-cash offers might sound more like a fair price.

These are two of the biggest names in cash home buying, so they’ll have the volume and experience to help most homeowners. You’ll be able to feel confident with either of these investment companies. It’s mostly a matter of understanding the differences between these two options and seeing which is the best fit for you. 

What is Open Door?

The online world of real estate buying and selling is huge today. Open Door is a website that went live in 2014 with the mission of connecting homeowners and real estate investors. It’s what’s known as an iBuyer, or Instant Buyer. That means that the closings are fast and the process is streamlined. With this platform, the offer for a home will be quick, but so will the timeline for closing. It all happens incredibly fast. 

There are only thirty-five markets in the United States where Open Door operates. That limitation alone can functionally keep a lot of people out of this service. For half of them, you can buy a home or sell a home. For the other half, you can only sell a home through their online home selling platform. 

Details about Open Door

Buying process for a piece of property

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It’s important to note that, beyond the restrictions on the location where Open Door will buy homes, there are lots of other restrictions as well. 

The limitations on buying mean that many sellers aren’t a great fit for Open Door. Here are some examples of property restrictions with this home buying company. 

– Homes listed between 100K and 600K (though in some instances they will go higher)
– Built after 1930
– Not in a flood zone
– Maximum lot of 2 acres
– Single family homes, townhomes, duplexes in all markets, condos in a few markets
– Only owner-occupied homes or vacant homes

The other thing to consider with Open Door are the fees associated with using their service. There’s a service charge of five percent and around one percent in closing costs. Those add up significantly. Open Door will also deduct the cost of projected repairs from their sale price. They aren’t a buy ugly houses company or a real estate investment company.

Where a buy ugly houses venture or a real estate investor might give you a cash offer and then fix up and flip your home, Open Door is more in the business to sell your home directly to another buyer at a profit.

Opendoor makes money through their undisclosed referral fee and potentially through a cancellation fee if the deal doesn’t go through. Though the closing date is closer than if you work with a real estate agent, the cash offer from this company might not meet your expectations. Closing costs and service fees mean you’re losing money versus what you could get on the open market.

There are lots of reviews that praise the fast and easy process of selling to Open Door. There are also lots of reviews that say that the offers are low and the repair estimates are high. 

What is “We Buy Houses”?

There are two possibilities for We Buy Houses. One is a slogan that lots of independent home investors use to advertise their services. Another is a branch of a direct home buyer. There’s even a variation that’s called We Buy Ugly Houses, which franchises its name to independent investors rather than being a monolithic company. 

Here, we’re going to talk about real estate investors who license the We Buy Houses name in their local real estate market. Licensing means that you’ll only find one of these in your real estate market – the rights are exclusive. There are more than two hundred licensed We Buy Houses companies in the United States. 

This conglomerate of real estate investors has its toes in markets from Kansas to Michigan to Phoenix to North Carolina and everywhere in between. 

What to expect from We Buy Houses

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No matter where you live, the process is the same if you work with We Buy Houses. There’s a phone number to call. During that initial phone call, an agent will ask lots of questions to evaluate your home and see if it’s possible for them to buy it. 

After that initial call, they’ll connect to a local licensee who’ll come look at the property. Then they’ll make you a cash offer if they can. It’ll be up to you to see if that offer meets your needs. 

Here’s what you can expect from We Buy Houses:

  • Cash offer in 24-48 hours
  • Closing date in around two weeks
  • Can buy homes on the brink of foreclosure or that are behind on payments
  • Remote closing options
  • Short sale for underwater mortgages
  • Buys homes in need of repair as-is

One of the big cons here is that you may not get the level of cash that you want for your home. The offer is what the offer is, and you’ll have to decide if it can work for you. The timeline is also fast, so you’re trading control over the process for a cut in the price and for convenience. 

Keep researching home selling options!

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It’s well worth the time that you put into the research process for you to get the best price for your home. Selling a house is a major commitment, just as buying your home was a major commitment. Current market trends mean selling a home for top dollar on your own timeline is easier than ever. The net proceeds when you transfer ownership, even if you’ve reduced the cost for needed repairs, is still a testament to the strength of the housing market.  

Though you may want to sell your house fast for cash, you also want to feel good about it! Don’t let decision fatigue get the best of you. Sit down with a sheet of paper and write down what works for you and what doesn’t. Open Door and We Buy Houses are both viable options, depending on your home selling needs. 

Brett Riggins

Brett Riggins

Founder of Connect Home Buyers Brett Riggins started his real estate journey after graduating from Western Michigan University in Construction Engineering. After completing his first few residential flips, him and his wife Arin started Connect Home Buyers LLC, and today, they help homeowners sell their property quick and hassle-free.

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