My friends Nick Baldwin and Mark Benson sent this news over to me, and I thought I would share it with you. Opendoor just got fined $62 million. Why is it important to you? Because I wanted to remind you (and warn you) that when we’re looking to hire a company, whether for real estate or any other business, we have to be careful. It is better to interview more than one, to compare and weigh your options better, and to pay attention to the details.
Let’s dive right into it.
This is a snippet from the NY Times article titled “Home buying firm settles deceptive marketing claims for $62 million.”
“Opendoor Labs, an online home buying platform, agreed on Monday to pay $62 million to the Federal Trade Commission to settle claims that it used misleading marketing practices to persuade people to sell their homes on the site.
“The company, which claims it allows homeowners to sell their homes more quickly than through a broker, deceived customers into offering their properties to Opendoor for less than they would have made on the market, the F.T.C. said Monday in a news release. The agency said Opendoor had presented home sellers with charts that showed they would make thousands of dollars by selling their properties on the platform compared with in the traditional marketplace.”
You can read the whole story on their website, although it is behind a paid wall.
Now, is it really a surprise that there are companies out there that would do this? Unfortunately, not. So just be careful.
On their website, the FTC breaks down what they found during their investigation of the company, and they found that Opendoor also violated the law by misrepresenting that:
Because of this, the FTC’s proposed orders were that Opendoor has to (1) pay a fine of $62 million “which is expected to be used for consumer redress. (FTC, 2022),” (2) stop deceiving potential home sellers, and (3) stop making baseless claims, has to present “competent and reliable evidence to support any representations made about the costs, savings, or financial benefits associated with using its service, and any claims about the costs associated with traditional home sales. (FTC, 2022).”
Opendoor agreed to this order, and the Commission's vote to accept the consent agreement was 5-0. So, the FTC is basically saying, “Hey, look. From everything we’re looking at, guess what? It looks bad.”
Meanwhile, this is Opendoor’s statement, which you can view on their website:
“While we strongly disagree with the FTC’s allegations, our decision to settle with the Commission will allow us to resolve the matter and focus on helping consumers buy, sell, and move with simplicity, certainty, and speed.
“Importantly, the allegations raised by the FTC are related to activity that occurred between 2017 and 2019 and target marketing messages the company modified years ago. We are pleased to put this matter behind us and look forward to continuing to provide consumers with a modern real estate experience.”
This is interesting because they are claiming that they did this way back in 2017-2019, which to me, says that they didn’t even take it seriously then. That’s crazy. They don’t agree with this, so they’re just saying, basically, “let’s kind of put this under the rug.”
When you are hiring a company, when you are looking at companies out there to do business with, make sure that you interview more than one (talk to at least three) and take a look at the details. Because stuff like this is going to continue to happen.
There is always someone out there who will try to deceive us, so make sure that you just blast them when you find out, because this should never be happening at all.