Opendoor Gets Fined $62m, Partners up with Zillow

August 8, 2022
Share this Post: 

Opendoor—an iBuying specialist based in the US—has been fined by $62 million by the FTC for misleading customers and posted disappointing results in Q2.

The company will also partner up with former iBuying rival Zillow in a long-term deal.

Opendoor was fined $62m by the Federal Trade Commission this week for "misleading" customers by saying that they could make more money by selling their property with Opendoor than via traditional methods.

The FTC alleged that Opendoor's marketing implied consumers would make more by selling their property to the company because all fees were bundled together. However, consumers often paid more, with Opendoor paying under market value for those properties.

Opendoor said it disagreed with the FTC's allegations, but agreed to pay the fine as part of a settlement deal, with fines going back to customers who were misled by the company. Opendoor will also stop making “deceptive” claims in its advertising.

The fine coincides with poor performance in Q2 after a record-breaking Q1 (revenue dropped from $5.2bn to $4.2bn). Opendoor posted significant losses of $54m. However, share prices soon jumped up when Opendoor announced a "multi-year" partnership with Zillow.

Zillow will feed its users to Opendoor’s iBuying platform, allowing Zillow sellers to request an offer from Opendoor to purchase their home either independently of or in addition to other Zillow offerings. The terms of the deal remain undisclosed.

The companies had been rivals in the iBuying sector, but Zillow's very public departure from the market late last year means they can now have a symbiotic relationship: Opendoor gets access to Zillow's massive audience, while Zillow gets to keep an interest in the iBuying sector.

 

August 8, 2022
Harvey is an experienced property journalist and copywriter. He has written about the property industry since 2015, starting at The Property Franchise Group in the UK, before moving to Spain to work for Spotahome. He has blogged for the private rented sector, ghostwritten for UK property experts and written case studies for franchise owners around the UK. Harvey joined Online Marketplaces as a News Editor in 2022.

Subscribe to our mailing list to get the famous, free Friday newsletter!

News and analysis to help build better online marketplace businesses, in your inbox, every Friday

Related News

Shutterstock 147091049
Housing.com To Hire 200 People In Market Leadership Push

Housing.com will hire up to 200 staff in fiscal year 2023 as it aims to establish itself as India's leading...

Read More
Propertyguru For Business Skyline Singapore
'Guided by Guru' - PropertyGuru Outlines New Brand Positioning

The Southeast Asian real estate portal operator PropertyGuru has announced a 'brand repositioning' and has introduced a new umbrella brand...

Read More
Shutterstock 1958725735
Spotahome Tells Staff That It Expects Another Round of Layoffs

Madrid-based on-demand rentals specialist Spotahome has announced it will go through another round of layoffs, weeks after firing two senior...

Read More
Homely And Ptg Skyline
Aussie Portal Homely Integrates with Proptech Group's VaultRE and Eagle CRMs

Australian challenger portal Homely.com.au says it will be easier than ever for agents to list in more places after announcing...

Read More

Editor's Pick