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Opendoor will pay nearly $62 million in refunds to tens of thousands of homesellers and end its allegedly deceptive advertising under a settlement with the Federal Trade Commission, according to an FTC announcement Wednesday.
Starting today, the federal agency is sending checks to 54,689 consumers it says were deceived by advertising and marketing claims made by the iBuyer. The median refund amount people who sold their home to Opendoor are receiving is $1,024, according to the FTC’s website.
“According to the FTC’s August 2022 complaint, Opendoor cheated 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 while saving them money on costs,” the FTC said.
“In reality, most people who sold to Opendoor made thousands of dollars less than they would have made selling their homes using the traditional process and many paid more in costs than what sellers typically pay. Under a final administrative order, Opendoor agreed to pay monetary relief and stop its deceptive tactics.”
According to the FTC, Opendoor agreed to change its business practices as part of the deal. The company is banned from making false, misleading and unsubstantiated claims about how much money sellers will receive when they sell to Opendoor or about the costs of using Opendoor’s service.
“The order requires Opendoor to have competent and reliable evidence to support any representations made about the costs, savings, or financial benefits associated with using its service, and any claims about the costs associated with traditional home sales,” the FTC said.
Asked for comment, Opendoor referred Inman to a statement the company issued in August 2022, when it first reached its settlement with the FTC.
“While we strongly disagree with the FTC’s allegations, our decision to settle with the Commission will allow us to resolve the matter and focus on helping consumers buy, sell and move with simplicity, certainty and speed,” the company said.
“Importantly, the allegations raised by the FTC are related to activity that occurred between 2017 and 2019 and target marketing messages the company modified years ago. We are pleased to put this matter behind us and look forward to continuing to provide consumers with a modern real estate experience.”
On a state-by-state basis, the biggest chunk of money — $14.2 million — will go to 13,103 homesellers in Texas who will receive a median refund of $981. In Arizona, where the iBuyer first began buying and reselling homes in 2014, 8,003 homesellers will receive a total of $9.2 million with a median refund of $1,046. In Florida, 6,201 homesellers will get a combined $6.8 million with a median refund of $1,023.
Homesellers who receive checks should cash them within 90 days, according to the FTC. The agency told consumers with questions about their payment to call the refund administrator, Epiq Systems, at 1-888-546-2054. The FTC also pointed consumers to the FTC website for frequently asked questions about the refund process, though access to that web page was not available as of 2:30 p.m. ET Wednesday. The agency also stressed that it never requires people to pay money or provide account information to get a refund.
Editor’s note: This story has been updated with a statement from Opendoor and additional details about the refunds from the FTC website.
