Compare Offerpad and Flyhomes
For Sellers
For Sellers
For Buyers
For Buyers
Answer: Offerpad is a direct home cash buyer that buys select homes off-market with cash offers and resells them at a profit to homebuyers while Flyhomes is a full-service real estate agent and a stand-in cash program for buyers that offers savings to homebuyers and home sellers
Buying and Selling with Offerpad
Offerpad is a direct home buyer that makes cash offers to sellers as it considers the condition of a home, improvements, home's upgrades, and required repairs.
In determining the offer, Offerpad discounts the offer amount from the estimated retail value after it’s fully renovated.
Offerpad Pricing
Offerpad makes money with fees and a difference between buying and selling each home. Offerpad claims service fees vary between 6% to 10%, plus an additional 1% to 3% of the purchase price in closing costs.
Sellers can also expect to receive an offer that has a built-in margin of 5% to 10% between the market price today and what Offerpad plans to flip the home in the open market.
In summation of all these fees, an offer equal to 80% of home value is reasonably expected from this type of sale after fees and cost of the repairs and resale.
Listing Services
- This Service Does Not Represent Sellers
Buyer's Agent Services
- This Service Does Not Represent Buyers
Offerpad Editor's Review:
Offerpad will buy a home at a price that is below market value due to necessary repairs, renovation, and other factors. After it buys the home, it renovates and resells it for a profit to another buyer or another company that rents it out to qualified tenants. With low offer price, comes a convenience of an all-cash closing when selling a home. Offerpad typically provides a conditional offer within 24 hours.
Offerpad will perform a free, on-site inspection of your home within 15 days of the signed conditional agreement. If Offerpad finds something it doesn't like and the sellers decline to make any requested repairs or issue a Offerpad credit it demands, Offerpad can then choose to cancel the contract or may determine that it still wants to move forward with the purchase of the home. If Offerpad elects to cancel the contract, there is no penalty to either party.
Offerpad does not make offers for most homes, it will only make offers for single-family residential homes in areas where it operates, including condos and townhomes, built after 1960, with a value of no more than $500,000-$600,000 as well as fair conditions without any major repairs required. Offerpad will not consider homes with significant foundation, structural or other condition issues.
Typically, Offerpad uses the following factors when determining the offer: existing condition of the home including repairs needed, time it will take to finish needed repairs, value of a home compared to other comparable homes in the area, real estate commission required to resell, costs associated with maintaining a home during repairs, including taxes, payments, insurance, utilities and homeowner dues.
The main disadvantage of using Offerpad is high loss in homeowners' equity. Offerpad is a "heavy" model, ready to buy homes in all-cash transactions. As any real estate investor, Offerpad is susceptible to losing money in any given transaction. Offerpad model further suffers from a "double expense" such as paying all the normal transaction costs that come with selling a home—including a commission to a buyer's agent (3%), concessions to buyer, holding costs, maintenance fees, taxes and other costs to list and market the home.
This model is prone to a number of risk factors, high operational costs and a continued need for higher-than-average Return on Investment (ROI) with each flip.
Offerpad is not legally bound to represent consumers, its main legal obligation is to its stakeholders. Moreover, because most homes in the United States are financed, homeowners own only partial net equity in their home.
Banks receive the same amount of the remaining mortgage sum regardless of how any given home is sold, or how much of homeowners' net equity is lost in the transaction with Offerpad.
Today, there are a number of highly qualified real estate agents who offer competitive listing rates and flat fee listings across the United States. Unless a situation absolutely requires a quick sale, Geodoma recommends that consumers first consider using a licensed real estate agent working on competitive terms to properly list their homes on the open market before turning to Offerpad option.
Where does Offerpad operate?
Buying and Selling with Flyhomes
Flyhomes is a multi-state full-service real estate agent offers consumers listing savings and buyer’s refunds in select areas across Washington, Oregon, Illinois, Massachusetts, and California.
In Oregon state law currently does not allow Flyhomes to offer buyer’s rebates to consumers.
Flyhomes Pricing
Flyhomes offers listing savings to sellers (1% listing fee) and commission refunds to buyers (32% estimated rebate where allowed by State law.)
Flyhomes also offers buyers Cash Offers stand-in program, where the company either assures buyer’s offer or buys a home and resells it to the buyer for an added fee (1% service fee).
A similar Trade-in Program is available for sellers.
Listing Services
- MLS Listing
- Zillow, Trulia, etc. Listing
- Accept and Deliver All Offers and Counteroffers
- Hold Open Houses
- Professional Photography
- Professional Floor Plans
- Yard Signage Installation
- Spare Key Lock-box Installation
- Schedule Inspection Services
- Schedule Private Showings
- Closing Duties
Buyer's Agent Services
- Find the Property
- Accept and Deliver All Offers and Counteroffers
- Recommend Other Professionals
- Attend Inspection Services
- Schedule Private Showings
- Negotiate Needed Repairs
- Closing Duties
Flyhomes Editor's Review:
Flyhomes is a consumer-focused saving real estate broker that offers a wide variety of value-added propositions for home buyers and sellers in select areas where it operates.
Agent Listings
As a listing agent, Flyhomes works with a seller to prepare their home for listing, including taking professional photos, pricing home, and publishing marketing materials. Flyhomes lists all homes on the local MLS as well as typical MLS Aggregators.
Trade-in Program for Sellers
Flyhomes is not an iBuyer. Flyhomes offers sellers a Trade-in Program where the company runs a pricing analysis on seller's current home and sets a conservative price guarantee for the amount that it will pay to buy it outright.
Once a seller selects a new home and her purchase offer is accepted, the company lists the seller's current home on the market in order to sell it for more than the price guarantee amount. Once the home sells company accounts for its expenses. Flyhomes Trade-in Program is a value-added proposition and a viable alternative to iBuyer Offers. Unlike Flyhomes, with an iBuyer seller inevitably loses a lot of their home net equity in the process due to the risk of holding and re-selling the home by the iBuyer. Sellers using Trade-in Program do not lose equity and only pay a moderate fee in the process. Granted, Flyhomes does not offer "quick cash" iBuyer proposition, where the seller still needs to list their home in the open market and wait for better offers to come in and pay expenses back, but the equity savings is why we rate this program as genuinely consumer-focused.
Sellers who use Flyhomes Trade-in program do not receive a rebate on the buy-side and Flyhomes charges sellers 1% commission as a service fee (this does not include the buy-side agent commission) to list their home. Flyhomes evaluates seller's home before the seller can participate in Trade-in Program and reserves the right to request repairs prior to seller's inclusion in the program.
Buyer's Agent
As a buyer's agent, Flyhomes works with buyers to find a home, schedule inspections, negotiate repairs and finalize the purchase. Flyhomes offers overall great value to consumers looking to buy or sell a home including a convenient "request tour" option on the Flyhomes website in order to easily schedule home viewings with their service team.
Guaranteed and Cash Offers for Buyers
Flyhomes offers buyers a unique Cash Offers stand-in program where Flyhomes purchases a home outright from the seller on a buyer's behalf in as few as 2 days and sells it back at the same price to the buyer on an agreed upon closing date.
When a Cash Offer is not available, buyers can utilize Guaranteed Offer instead. For the Guaranteed Offer program, Flyhomes guarantees the seller that the home will close, and if it doesn't, Flyhomes will then buy the home for the same terms.
Cash Offers stand-in program is not free, it is also highly selective. Cash Offers program may come with added risks in the event the buyer decides to back out of the sale. Buyers should carefully review their agreement with Flyhomes before participating in Cash Offers stand-in program so to fully understand the fees and potential penalties for backing out of the Cash Offer once it is made.
Buyers can only utilize Cash Offers when working with Flyhomes, which means that if there is another local real estate agent who offers a buyer a better commission refund, such as a flat fee option, the buyer cannot take advantage of these larger savings with Cash Offers.
In some cases, an alternative savings model may better serve buyers financially than Cash Offers proposition due to a sheer price tag of standard real estate commissions.