On October 21, 2022, the FTC finalized a consent order against Opendoor Labs, Inc. designed to prevent the online real estate business from deceiving consumers about how much money they could save by selling their home to Opendoor, as opposed selling on the open market. The final order requires Opendoor to pay $62 million and to have competent and reliable evidence to support any representations made about the costs, savings, or financial benefits associated with using its service.
Opendoor operates an online real estate business where it buys homes directly from consumers as an alternative to consumers selling their homes on the open market. Opendoor claimed to use cutting-edge technology to save consumers money by providing “market-value” offers and reducing transaction costs compared with the traditional home sales process. The FTC alleges that Opendoor used misleading and deceptive information by promising that consumers would make more money by selling their homes to it but on the contrary, consumers actually lost thousands of dollars selling to it compared to what they would have received from a traditional sale.
The FTC’s full press release can be found here.
The consent order can be found here.