Table of Contents
- 1 Offerpad Overview
- 2 Key Features
- 3 Offerpad vs. Competitors
- 4 Final Take
- 5 About the Author
Quick Take: Offerpad simplifies the buying and selling of homes at a reasonable rate. The company assists customers with any renovations and moving requirements and also offers financing services. For a quick turnaround on home sales, it is among the best in the iBuying business.
- Service Fees
- Eligible Homes
- Time to Close
- Process Start to Finish
How did we calculate this?
- Quick and convenient process
- Free moving service within a 50-mile radius
- Home improvement services
- Price can be negotiated in certain circumstances
- Mediocre App Store and Play Store ranking
- Geographic limitations
Offerpad is an online real estate brokerage that began in 2015. Simply put, Offerpad buys and sells homes, a process commonly known as iBuying. Other services stretch to home loans, home improvement, professional advice and closing. By conducting the majority of each deal digitally, Offerpad has become a quick and easy-to-use alternative to traditional real estate brokerage firms. It also has a mobile app.
Some of the perks customers will get with Offerpad include:
- Offers within a 24-hour window
- Purchase agreements completed digitally
- Deals can be closed within eight business days in most jurisdictions
- Easy-to-schedule virtual and in-person home tours
There isn’t much certainty as to where home prices will be in the next few years. But, even when deciding to wait out a hot housing market, it’s a good idea to be prepared.
Offerpad has several features that might be especially beneficial to first-time homebuyers, homeowners looking for an upgrade or investors. Here’s a closer look at each one.
Fees are typically one of the most important things to consider in home buying or selling. Sure, online cash offers at the click of a button sound great, but how much of the pie does Offerpad take? The fee breakdown for buyers and sellers are detailed below.
Buyers on Offerpad don’t have to pay any fees. As long as they have preapproval for financing, a home can be purchased. Other related costs may apply to buyers, though, including financing, appraisal, inspections and closing.
Comparatively, sellers are faced with higher fees. Offerpad has two options for sellers:
- The EXPRESS cash offer. This is an immediate no bells and whistles method to finalize deals fast. A standard 5% fee applies on the sale, along with an estimated 1% closing fee.
- The FLEX option. This brings a higher cost but may appeal to customers who don’t necessarily want to move out immediately. Sellers may receive better offers under the FLEX option, but there’s a cost involved. Offerpad charges a 6% commission on the sale if a seller uses FLEX, as well as the estimated 1% closing costs. A concession of around 1% can be applied to finalize the deal, too.
Sellers who choose the FLEX option can make home improvement repairs and renovations that are paid upfront by Offerpad. The seller can repay these costs at a later date. Restorations and improvement services covered by Offerpad include:
For both the EXPRESS and FLEX options, workarounds for closing dates are available. This helps sellers avoid double mortgaging.
Time to Close
Closing times are really where Offerpad excels. Its platform will make an offer to sellers within 24 hours and the deal could be closed within as little as eight business days. The whole process is completed electronically using DocuSign or HelloSign to reduce friction.
Buyers should be aware that due to real estate market volatility, offers will usually expire within four days. Even if an exact closing date hasn’t been set yet, Offerpad will let customers provide an estimated timeframe. Closing dates can be adjusted within the 90-day period after the contract process has begun.
There are several closing benefits, too. The only in-person interactions required are an inspection and the finalization of the closing documents. This ensures everything is in the condition described, and Offerpad will need full access to the home to complete these checks. Any discrepancies, such as needed repairs, will need to be resolved before the final closing date.
Once that’s settled, Offerpad will cover the seller’s local moving costs. To qualify, the move must be within a 50-mile radius of the home being sold to Offerpad. Transportation weight limits of 13,000 pounds apply and the new home size must be smaller than 2,800 square feet.
Offerpad also has an Extended Stay program, which allows sellers to stay in the home for three days after closing the deal. This gives more time to make arrangements for moving and it’s free. A refundable deposit is required, though.
Offerpad is a fast-growing company with new product developments that continues to expand into new territories. The areas it currently services are detailed below, along with the types of homes it will purchase and the types of financing it will provide.
In 2022, Offerpad is available in almost 1,000 cities in 16 states. While the company is growing, it only serves certain regions, so its services may not be available to everyone. Here’s a look at the regions it covers:
|Arizona||Phoenix and Tucson|
|California||Riverside, Sacramento and San Bernardino|
|Florida||Jacksonville, Orlando and Tampa|
|Missouri||Kansas City and St. Louis|
|North Carolina||Charlotte and Raleigh|
|South Carolina||Charlotte and Columbia|
|Texas||Austin, Dallas, Houston and San Antonio|
However, Offerpad has some restrictions concerning homes it will purchase. The standard homes Offerpad deems acceptable are:
- Single-family residential
- Built after 1960
- Located on less than one acre of land
- Valued at less than $1 million, in most regions
Offerpad will also purchase homes in gated or age-restricted communities. It will not buy:
- Pre-fabricated homes or mobile homes
- Homes where there is no proof of ownership
- A home that is not vacant by the closing date
- Homes that have serious structural or foundation problems
Sellers must submit photos of their home to Offerpad when applying, though they are not exclusively required.
Good To Know
Offerpad also works with real estate agents who are trying to source the best solutions for their clients. Agents who refer customers to Offerpad can earn up to a 3% referral fee.
Process Start to Finish
Offerpad is among the best options buyers and sellers can use to complete real estate transactions online. All of the steps along the way take the hassle out of the experience for customers by:
- Allowing offers to be made and accepted within 24 hours
- Allowing deals to be closed within eight business days
- Providing professional support throughout the entire process
- Offering moving assistance
- Accepting renovations or home improvements requests through the platform
- Offering flexible scheduling for customers
Offerpad also offers home loans. Whether they’re a first-time homebuyer or a seasoned investor, Offerpad customers can apply for financing free of fees or charges. The company will subsequently aim to find the best deals suited to the customer’s needs, offering loans on family homes, residential units and other properties.
Down payment assistance, mortgage insurance, interest rate protection — even jumbo loans up to $3.5 million — are all offered by Offerpad.
Lastly, bundling products will save buyers money in many ways. For example, customers buying, selling and financing all at the same time will receive more savings than those using just one or two services. Benefits of bundling include:
- Reducing down payments
- Reducing closing costs
- Reducing interest rates on mortgages
The overall discount will vary depending on the number of products bundled, the cost of the homes bought or sold and the price of the mortgage. The general discounts, though, are calculated as follows:
- Between 0.5% and 1.0% discount on Offerpad EXPRESS cash offer sales
- 0.5% discount on an Offerpad FLEX home purchase
- 0.5% discount on lending with an Offerpad home loan
Offerpad vs. Competitors
Offerpad has got some competition in the iBuying space. Here’s a closer look at how it stacks up against some of its biggest rivals.
Offerpad vs. Redfin
Redfin pioneered the iBuying space when it launched in 2004 and became one of the first all-digital, online real estate brokerage service providers in the U.S. Offerpad takes the most simplistic approach to its business model. It simply buys and sells homes and charges a fee — that’s it. Redfin, by contrast, goes a step further. It also provides home solutions for renters and includes a vast catalog of educational resources.
Redfin employs a network of agents that help broker deals, landing the best prices for home buyers or sellers. Redfin also has a ‘SharePlay’ feature that allows customers to use their Apple devices to browse homes with FaceTime.
Offerpad vs. Ribbon
Having launched in 2017, Ribbon is a newer rival. This platform operates very differently from its competitors, allowing its customers to make an all-cash offer before they have secured a mortgage provider.
Once a customer has pre-approval from a lender, Ribbon will front the cash and buy the home. If the customer hasn’t secured a mortgage by the closing date, Ribbon will rent the home to the customer for up to 180 days and at the end of the period, the buyer can still purchase the home at the contract price. Offerpad, by contrast, does not have these features, and its fees are typically 5% higher than Ribbon’s, which stand at around 1%.
Offerpad vs. Opendoor
In addition to iBuying, Opendoor also provides financing services through affiliates, just like Offerpad. Customers don’t necessarily need to be purchasing a home through Opendoor to access these services, but they must have a credit score of at least 620.
Between the two companies, Opendoor appears to have the preferred app, outperforming Offerpad in the rankings on both the Google Play Store and the Apple Play Store. On the App Store, Offerpad scores 3.5 stars compared to Opendoor’s 4.7 stars. On the Play Store, Offerpad scores 3.1 stars compared to Opendoor’s 4.4 stars.
Offerpad vs. Knock
Similar to Offerpad, Knock also operates in 16 states in the U.S. However, it doesn’t offer the financing services users get with Offerpad. What Knock does do, though, is provide a combination of Offerpad’s FLEX and EXPRESS cash offer products.
Once a buyer has settled into their new home, Knock will list their old home aiming to get the best price. If it doesn’t sell, the homeowner has a backup offer from Knock on the table to redeem.
Offerpad simplifies transactions for homes, the most valuable asset owned by many consumers. Its fast-formula approach is perfect for home buyers and sellers looking to cut to the chase and settle deals as quickly as possible. Overall, its fees are reasonable given the hassle-free service it provides.
FAQHere are some questions those considering Offerpad’s services often ask.
- Are Offerpad offers low?
- Unlike some other iBuying companies, Offerpad will negotiate prices with customers. The offers pledged by Offerpad are determined by data-driven insights and industry experts. Through this process, it calculates what it sees as the fair market value.
- Offerpad will receive a 5% fee upon the sale, which should also be taken into account by the seller. Overall, Offerpad has scored a 94% satisfaction rating from surveys conducted with roughly 2,500 customers.
- Are Offerpad and Opendoor the same company?
- Offerpad and Opendoor are not the same company. They are two of the largest iBuying companies by transaction volume but they are two completely separate businesses.
- Is Offerpad legitimate?
- Yes. Offerpad was incorporated in 2015 and holds real estate brokerage licenses in 17 U.S. states. It is a publicly-traded company on the New York Stock Exchange and can be found under the ticker OPAD.
- Is Offerpad a good service?
- Offerpad is one of the most flexible and convenient ways for consumers to buy or sell a home. Sellers typically receive an offer around 24 hours after submitting an application, and Offerpad is accommodating regarding a buyer’s move-in date.
Editorial Note: This content is not provided by Offerpad. Any opinions, analyses, reviews, ratings or recommendations expressed in this article are those of the author alone and have not been reviewed, approved or otherwise endorsed by Offerpad.