Opendoor was fined $62 million by the FTC for cheating home sellers.
According to the FTC, Opendoor told customers that they could make more money selling their homes to other people than they would by selling their homes themselves. Most people who sell their homes to Opendoor make less money than they would make selling to regular buyers, according to the FTC.
iBuyer is an instant buyer that buys homes directly from owners and resells them, sometimes making small renovations to the home. The company is able to close on homes quicker than traditional buyers. Opendoor made money by charging its own fee instead of a traditional broker's fee.
In a 14-page report, the FTC detailed why Opendoor's marketing materials were deceptive. According to the FTC, the evidence seemed to suggest that consumers would make more money by selling to Opendoor. They paid more than they said they would.
The company's claims that it purchased homes at market prices were challenged by the agency.
The director of the FTC's Bureau of Consumer Protection said in a statement that Opendoor deceived consumers about how much they could earn from selling their homes on the platform. There is no new way to cheat consumers.
The agency expects to use the $62 million fine to repay Opendoor customers who were cheated. The company was ordered by the FTC to stop making false claims about potential home sellers.
According to Opendoor's statement, the company's leaders disagree with the allegations but are agreeing to the commission anyway. It said that the FTC's allegations were related to homes Opendoor purchased in the last two years.
Opendoor went public at the end of 2020 after raising over a billion dollars. The FTC is investigating the company's advertising practices.
Are you going to sell your house? Do you have a tale to tell? Email anicoll@insider.com, or use a non-work phone, if you want to contact reporter AlexNicoll.
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