- The FTC reached a settlement with online home-buying platform Opendoor Labs Inc. to resolve allegations of deceptive sales and marketing practices in violation of the FTC Act. Opendoor operates an online portal through which customers sell their houses directly to Opendoor rather than through the traditional residential real estate process.
- The Complaint alleged that Opendoor falsely represented through their marketing materials that consumers make thousands of dollars more by selling to Opendoor than on the traditional market due to “market-value” offers and reduced transaction costs. However, consumers typically made less money than possible in the traditional market due to Opendoor’s below-market offers and higher transaction costs. Opendoor also allegedly misrepresented its fee structure, and required consumers to make more extensive (and costly) repairs than the traditional market would require.
- Under the terms of the Proposed Order, Opendoor will pay $62 million to the FTC for consumer redress and provide sufficient seller contact information to enable a redress program. The company will also be enjoined from misrepresentations concerning profits sellers will realize, repair costs, listing costs, comparison with traditional sales, potential financial benefits and other topics.