Opendoor pulls contracts after pausing iBuying

Mortgage & Real Estate

A few weeks ago, Opendoor joined the pack of other iBuyers, in announcing the suspension of its iBuying platform, citing public safety concerns due to the spread of COVID-19.

“Like the rest of the world, we have been closely monitoring the escalation of COVID-19 over the last few weeks,” a spokesperson for Opendoor said. “We’ve been heartened by stories of resilience and support in this unprecedented time, and we’re mindful of the impact this crisis has had on the communities we serve and the teammates we work with across the country. Our priority is the safety and well-being of our customers, employees and the general public.”

Opendoor said that it made its decision based on guidance and recommendations from the Center for Disease Control. “We are also highly aware of the impact COVID-19 is having on local communities,” the spokesperson said. “With closures and staffing issues facing government offices, home transactions are already being delayed in some regions. We understand the strain that puts on customers. By pausing offers temporarily, we can proactively address the situation.”

Now, social media is lighting up with reports from Opendoor customers claiming their contracts had been canceled.

Kelly Huffstetler, a Raleigh, North Carolina-based broker, told HousingWire that Opendoor made some of her clients generous offers, but left them hanging once the iBuyer announced purchases would be suspended.

When one of her clients called Opendoor to see if their offer was still in good standing, Huffstetler said they were sent to a voicemail.

“Nobody answered, but got a message that says they’ve suspended all purchases for the time being,” Huffstetler said. “No one ever called him back, just kind of left him in the lurch.”

Huffstetler said that the goal was to use equity from the current house and put it towards a downpayment for the new one.

“That was pretty disappointing,” Huffstetler said. “What ended up happening was, they scrambled to try to move some money around to be able to get the down payment, and they weren’t able to do it until the following day. By then, there were 10 offers on this property, and we didn’t compete.”

In a blog post from Opendoor Chief Executive Officer, Eric Wu, Wu said that despite the backlogging COVID-19 may be causing in the industry, the company will stand by its commitments to customers.

“Despite public health constraints, we know some of our customers may still need to move,” the blog post said. “For sellers who are in contract with us and contingencies have been released, we’ll honor that commitment. However, given the health guidelines and shelter-in-place mandates, we are requesting customers expedite their closing or delay closing until these mandates are lifted. Additionally, if customers would prefer to not move at this time, we are allowing customers to cancel.”

Despite pausing iBuyers offers, Opendoor said it would be offering alternatives to those who want to buy.

“While we are temporarily pausing offers, we are offering a few alternatives that can help customers accomplish their goals,” the blog continued. “We are working with third-party buyers who are able to transact without the need to interact with the customer and we are also partnering with local agents who are offering creative solutions to list virtually.”

“We’ll continue to put our customers first, and work hard to ensure we can continue to help customers move with ease and convenience with everyone’s health and safety in mind.”
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