9 min read May 08, 2024

Offerpad Reviews: Is the 1% Cancellation Fee For Real?

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Edited By

Carol Coutinho

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Editor
Edited By

Carol Coutinho

Editor, Houzeo
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Carol C. is a versatile editor, expertly refining real estate content with precision and creativity. When not exploring market trends, she is immersed in the enthralling world of the theatre.

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Offerpad is one of the largest iBuyers in America. They extend quick cash offers using advanced AI technology. However, Offerpad has strict eligibility criteria and only select houses get offers.

Editor’s Rating

4.1

User Rating

3.3

(7 Reviews)

Write a review

Pros

  • Instant preliminary cash offer
  • Flexible closing timeline
  • You can extend your stay after closing upto 3 days

Cons

  • You just get 70% to 80% of your property's FMV
  • You have to pay a hefty 6% service fee
  • 1% cancellation fee

Offerpad makes cash offers for homes in just 24 hours. The company calculates the preliminary offer using advanced machine-learning technology and human expertise.

However, for this speed, you might have to compromise on the price. You may get 70% to 80% of your home’s Fair Market Value. Additionally, the repair and closing costs are deducted from their final offer.

In case you decide to back out of the agreement, there will be an additional cancellation cost of 1%.

    ✍️ Editor’s Take: We recommend listing your home on the MLS via Houzeo. Houzeo’s platform helps you get multiple cash offers. Moreover, the platform also helps to manage multiple offers. Compare Offerpad vs. Houzeo.

Is Offerpad Legit?

Yes, Offerpad is a legitimate company based in Phoenix, Arizona. The company was founded by Brian Bair and Jerry Coleman in 2015.

Following in the footsteps of Opendoor, Offerpad launched Offerpad Express. The company’s vision was to provide home sellers with quick cash for homes. In the second quarter of 2023, Offerpad acquired 840 homes and sold 650 homes.

Offerpad operates in 1700+ cities in 14 states and holds real estate brokerage licenses in multiple states.

Will Offerpad Go Bankrupt in 2025? Watch the Video to Know More

Housing Market Analysis - Will Offerpad Go Bankrupt

How Does Offerpad Work?

Offerpad is essentially a house flipper. They purchase homes at discounted price and sell them for a profit.

However, they only buy properties that meet their strict eligibility criteria.

Criteria Eligibilty
Service AreaThe property has to be within their service area.
House TypeThey do not buy manufactured, prefabricated or mobile homes.
TenancyThe house should be vacant by the closing date or the extended date. No leasebacks after closing are permitted.
PeriodThe house should not have been built before 1950.
SizeThe properties should be within 1 acre.
Home ValueThe house should not be priced more than $1 million.
ConditionThe property should have a well-built foundation and structure; even small damage will not be overlooked.
OwnershipThe owner must have clear ownership (no double escrow).

Process of Selling to Offerpad

Here’s how Offerpad works:

  1. Request an Offer: Fill out a form on Offerpad’s website. Provide property details and attach photos of your home.
  2. Evaluate Your Cash Offer: Within 24 hours, Offerpad generates a preliminary offer for your home using proprietary algorithms and expert analysis.
  3. Sign the Purchase Agreement: You have 4 days to accept or reject Offerpad’s offer. If accepted, you have to sign a purchase agreement. Note, that Offerpad doesn’t disclose the final offer price at this stage.
  4. Complete the Inspection: Once the offer is accepted, Offerpad schedules a home inspection. The inspector assesses water damage, structural issues, and general wear and tear.
  5. Receive the Final Cash Offer: You will receive the final offer. You have 4 days to decide whether to accept it.

If you need more time, you can use their Extended Stay Program. With this facility, you can move out in 3 days after your closing date at no extra charge.

Additional Offerpad Services

Here are some additional services Offerpad provides, depending on your location.

  • Offerpad Brokerage: You can work with an Offerpad agent to get all the services. Like a traditional brokerage, you will receive all the assistance you need with Offerpad Realty.
  • Offerpad Home Loans: Finance your new home with the Offerpad mortgage lending solution. You get step-by-step assistance right from the application process till closing. You can use this loan to finance single-family homes, residential units, townhomes, etc.
    🎯 What is Offerpad Flex: Through this service, Offerpad funds repairs and improvements so that home sellers can attract better offers. Borrowers have to refund the amount at closing. Offerpad Flex covers paint jobs, fixtures, and countertops.

Offerpad Coverage

The iBuyer Offerpad offers services in 14 states.

Offerpad Coverage

How Much Does Offerpad Pay?

Offerpad offers are usually 70% to 80% of a home’s FMV. Additionally, there is further reduction after the home inspection.

Their final offer takes into account the 6% Offerpad service charge, repair expenses, and closing costs. So, ultimately your home’s worth may be reduced.

Offerpad.com Reviews

Offerpad has a 4.1-star rating on Better Business Bureau based on 264 reviews.

Most reviews praise their quick cash offers and flexibility in closing timelines. However, Offerpad complaints highlight their lowball cash offers and high service fees.

Offerpad Reviews: Customer Praises

✅ Juan was happy with Offerpad’s hassle-free process and competitive cash offer.

JuanUSASubmitted 2021

The process was very streamlined and polished. Greg and Kim kept us up to date every step of the way as well as addressed any concerns we had. Offerpad gave us a very competitive offer and we were able to move out of our home as soon as we were ready without the hassle of people coming through our home or having to hire someone to “stage” our home.

Source: Trustpilot

✅ Lisa was grateful for the flexibility and understanding shown by Offerpad’s team during the sale of her house.

Lisa BeamonUSASubmitted 2022

I would recommend Offerpad to anyone looking to sell their home. The experience for me and my family was great. I was dealing with a lot of personal issues and they completely understood and worked with us. It was definitely the way to go.

Source: Google

Offerpad Reviews: Customer Complaints

❌ John was furious because Offerpad reduced his final cash offer drastically.

John PaulUSASubmitted 2022

They WILL lower their offer by 25,000!!! They make good sounding promises in the beginning and when you are close to closing they will start finding many reasons to cut the price by more then half !! Terrible terrible terrible service

Source: Trustpilot

❌ Brent was furious with what he claimed were Offerpad’s “deceitful practices”.

Brent GreearUSASubmitted 2022

They canceled the contract due to foundation issues, they sent a foundation guy over who inspected and said it passed! Offerpad lied to us from the beginning to the end! They did not use the foundation professional evaluation! Glad I served 8 yrs to protect peoples rights and beliefs just to have mine disregarded! Be wary of these people they have put my family and I in a bad position!

Source: Google

Offerpad Pros and Cons

Companies like Offerpad help sellers who need to sell their homes quickly. However, their pros and cons paint a clearer picture:

👍 Pros

Let’s look at the pros of Offerpad:

  • Instant Cash Offer: You receive a preliminary cash offer within 24 hours of submitting your property information.
  • Flexible Closing Timeline: Offerpad allows you to extend your stay after the closing date by 3 days.
  • Free Local Move: If your new home is within a 50-mile radius of your old house, Offerpad will help you move for free.

👎 Cons

Here are the disadvantages of Offerpad:

  • Lowball Cash Offer: Offerpad’s final cash offer may be around 70% to 80% of your property’s Fair Market Value.
  • High Additional Fees: You must pay a 6% service fee, repair, and closing costs when selling your house to Offerpad. This reduces the total cash you get in hand.
  • Sellers Enter Into a Contract Before Knowing the Final Sale Price: Offerpad requires you to sign a legal contract if you accept their initial offer. Since the company lowers the offer after the home assessment, you don’t know the final price.
  • Offerpad Cancellation Fee: If you back out from the transaction 4 days before closing, you must pay a 1% cancellation fee.
  • Limited Coverage: Offerpad provides service only in 14 states.

Offerpad Competitors

» Jump to: Offerpad vs. Houzeo | Offerpad vs. Opendoor | Offerpad vs. HomeVestors

1. Offerpad vs. Houzeo

Selling to Offerpad seems quick and easy. But you pay for this convenience by selling your home at a lower price.

With Houzeo’s MLS listing, sellers can draw in more cash buyers and start a bidding war. You will be able to fetch a better price for your house as a result.

OfferpadHouzeo
Sale Price70% to 80% of FMVUp to 100% of FMV
Customer Rating4.1 stars (264 reviews)4.9 stars (6,140 reviews)
Coverage14 states47 states + Washington D.C.
Fees/Commissions6% Service Fee$399
Cancelation Fee
Scope for Negotiation
100% Online Process

2. Offerpad vs. Opendoor

Opendoor has a similar business model to Offerpad. They have fast closing and more flexible terms compared to Offerpad. Opendoor also has better reviews than Offerpad from customers.

So, if you wish to sell a distressed property, Opendoor is a better choice.

3. Offerpad vs. HomeVestors

HomeVestors is a cash house buyer company that buys houses as-is. They have near-nationwide coverage, so you can sell to them easily.

HomeVestors provides cash offers that are roughly 70% of the after-repair worth of your house. Additionally, working with HomeVestors helps you to haggle and receive a better offer.

“We Buy Houses for Cash” Companies Near You

There are other “We Buy Houses As Is” companies in the market. You can request offers from multiple cash companies and pick the one that suits you the best.

RegionStates/CitiesCompanies That Buy Houses For Cash Near Me
NortheastStatesConnecticut | Maine | Massachusetts | New Hampshire | New Jersey | New York | Pennsylvania | Rhode Island | Vermont
NortheastKey CitiesBoston, MA | Brooklyn, NY | Buffalo, NY | Long Island, NY | New York City, NY | Philadelphia, PA | Pittsburgh, PA | Rochester, NY | York, PA | Clayton, NY
MidwestStatesIllinois | Indiana | Iowa | Kansas | Michigan | Minnesota | Missouri | Nebraska | North Dakota | Ohio | South Dakota | Wisconsin
MidwestKey CitiesCincinnati, OH | Cleveland, OH | Columbus, OH | Detroit, MI | Indianapolis, IN | Kansas City, MO | Milwaukee, WI | Omaha, NE | Minneapolis, MN | Wayne County, MI | St. Louis, MO | Boulevard Heights, MO |
SouthStatesAlabama | Arkansas | Delaware | Florida | Georgia | Kentucky | Louisiana | Maryland | Mississippi | North Carolina | Oklahoma | South Carolina | Tennessee | Texas | Virginia | Washington, D.C | West Virginia
SouthKey CitiesAtlanta, GA | Asheville, NC | Baltimore, MD | Charlotte, NC | Charleston, SC | Columbia, SC | Dallas, TX | Fort Lauderdale, FL | Fort Myers, FL | Fort Worth, TX | Greensboro, NC | Greenville, SC | Houston, TX | Huntsville, AL|Killeen, TX | Knoxville, TN | Lexington, KY | Louisville, KY | Miami, FL | Nashville, TN | New Orleans, LA | Orlando, FL | Pasadena, TX | Raleigh, NC | Rockville, MD | San Antonio, TX | St. Augustine, FL | Tampa, FL | West Palm Beach, FL | Memphis, TN | Austin, TX | Norfolk, VA | Jacksonville, FL | Tallahassee, FL | Pensacola, FL | Sarasota, FL | Panama City, FL | Augusta, GA | Virginia Beach, VA | Clearwater, FL | Savannah, GA | Chattanooga, TN | Columbus, GA | Lawrenceville, GA | Winston-Salem, NC | Birmingham, AL | Jackson, MS | Biloxi, MS
WestStatesAlaska | Arizona | California | Colorado | Hawaii | Idaho | Montana | Nevada | New Mexico | Oregon | Utah | Washington | Wyoming
WestKey CitiesColorado Springs, CO | Denver, CO | Fresno, CA | Las Vegas, NV | Los Angeles, CA | Phoenix, AZ | Sacramento, CA | San Diego, CA | San Francisco, CA | Seattle, WA | Tucson, AZ | Portland, OR | Salt Lake City, UT | Orange County, CA | Roseville, CA | Ventura, CA | Lemon Grove, CA | Casitas Springs, CA | Bakersfield, CA

Other Options You Should Consider

  • Sell to an iBuyer: iBuyers purchase homes needing minimal repairs in as-is condition. They can be a great option if you want to sell your house fast.
  • Sell to Cash Home Buyers: Individual cash home buyers make all-cash offers, usually within 24 to 48 hours. They also let you skip listing on the MLS.
  • Sell For Sale By Owner: For Sale By Owner websites help you list and sell a house yourself. Hence, you save thousands in agent commissions. Many FSBO websites will also help you with the paperwork.

Is Offerpad a Good Option?

Offerpad is the most popular iBuyer. However, multiple cash buyers can offer you a better deal.

A smart way to sell to a cash buyer is to list your home on the MLS with Houzeo. Houzeo lists your property within 24 hours while providing wide exposure to attract multiple cash buyers.

Houzeo’s platform helps you to compare offers and request the highest and best offer. This allows you to grab a better deal. Moreover, you can also attract home buyers who are ready to pay 100% of your home’s value in cash.

» Houzeo Reviews: Check out why more than 6,000+ home sellers have rated Houzeo 4.9 stars out of 5 on Google and Trustpilot.

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Frequently Asked Questions About Offerpad Reviews

Does Offerpad negotiate with buyers?

No, Offerpad's final offer is a take-it-or-leave-it proposition. However, in the event of an error, you can request a revaluation. Learn more about the process of selling to Offerpad.

Who is better Offerpad or Opendoor?

Opendoor is better than Offerpad in terms of geographical coverage, overall customer reviews, and services. Offerpad offers more services than Opendoor.

Can you negotiate with Offerpad on repairs?

No, Offerpad does not negotiate unless there are major discrepancies. You will have more opportunities to negotiate if you list your house on the MLS. With more offers you can even counter the offers you like.

Is Offerpad a scam?

Offerpad is a legitimate iBuying company present in over 1,000 cities. It is also accredited by BBB since 2018.

Is Offerpad and Opendoor the same company?

No, they are different companies with a similar business model. Learn more about which is the better iBuyer.

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Reviews

3.3

(7 Reviews)

  • shawna calvert

    Verified Reviewer

    3rd Nov 2023

    I have helped buyers purchase offerpad homes on several occasions. The company is easy to schedule with and responsive while in the field. No complaints here

  • ROLAND MORITO

    Verified Reviewer

    3rd Nov 2023

    They low ball you

  • Teri W

    Verified Reviewer

    3rd Nov 2023

    The issue is the right MLS listing. It is great it is listed but if you do not list it on multiple local MLS listing you wont get any hits.

  • Eric J. Johnson

    Verified Reviewer

    3rd Nov 2023

    I just closed my first deal with Offerpad as the seller. I heard good & bad from other agents about them. I was thoroughly impressed with my experienced! They were great to work with and very timely in communications! I’d happily do another deal with them!

  • Sterling G Leavitt

    Verified Reviewer

    3rd Nov 2023

    Overall another “service” born out of the Idea that home selling can be as easy as going to the store. They offer a very quick and fluid process that can get a homeowner paid with an investor-level offer of 10 to 15% below the potential market price of a home. In this regard, they are nothing special

  • Jordan Pothier

    Verified Reviewer

    3rd Nov 2023

    Offerpad is the best ibuyer program we have ever worked with!

  • Terrible company and service

    Verified Reviewer

    9th Nov 2023

    Company is absolutely horrible. They do not offer fair prices, and hey are demanding, and don’t do enough work for you. For that I could have hired a realtor and at least worked out with someone personally. They nickel and dime you for thousands so it’s important to be assertive. Best proactive would be to not use them and put them out of business. Go with a realtor,offerpad doesn’t offer this easy worry dree process.

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