This week, over 50,000 Opendoor customers will be receiving refunds based on a 2022 settlement agreement related to deceptive advertising practices, according to an announcement by the Federal Trade Commission (FTC).
A total of $62 million is going back in the pockets of consumers who utilized the iBuying service years ago, based on a consent order first announced in August 2022, before being finalized in October of that same year.
According to the final consent order, Opendoor falsely and repeatedly claimed for years that its instant buying offers constituted “fair market value” of a home and overstated net proceeds in marketing efforts across multiple channels.
Most of those advertising practices appear to have ended in 2019, but the FTC noted that the “overwhelming majority of Opendoor’s offers have been significantly below what consumers would have received if they sold on the open market,” and claimed that the company very purposefully reduced their offers below internal estimates of “fair market value.”
The FTC also asserted that Opendoor pushed customers to pay for repairs they otherwise would not have made, “well beyond” what is common practice in a market sale, and also made deceptive claims about concessions consumers paid on the open market—telling customers they would pay 2% to buyers in a traditional sale, even though its own re-sold homes averaged less than that.
Apart from the $62 million currently being paid out, Opendoor was disallowed from claiming its services would save consumers money or that it paid the equivalent of market prices for homes. The company has previously said it had already ceased the disputed advertising practices back in 2019, and that it “strongly disagreed” with the order.
Like other iBuyers, Opendoor has struggled to adapt in the post-pandemic economy, with revenues down more than 50% in 2023.
One day after announcing the payments, the FTC release appeared to have been removed from the commission’s website. The FTC did not immediately respond to an emailed inquiry about this, or the payments.
