Opendoor to pay $62 million to settle FTC claims it misled home sellers

Opendoor Applied sciences Inc. agreed to pay $62 million to the Federal Commerce Fee to settle allegations that it misled potential residence sellers in its advertising and marketing campaigns.

The fee alleged that Opendoor, which makes use of software program to purchase properties from shoppers after which put the properties again up on the market, tricked clients by promising they might earn more money by promoting to the corporate than they’d on the open market, in accordance with a press release Monday. The corporate agreed to pay $62 million to the fee.

Opendoor’s inventory fell 2.4% to $4.79 on Monday.

Opendoor pioneered the mannequin, usually referred to as ibuying, and competed with Zillow Group Inc. till the web itemizing large exited the enterprise final yr.

The FTC mentioned in its assertion that Opendoor’s provides on homes had been beneath market worth on common, whereas its prices had been sometimes greater than what a standard shopper would pay for an actual property agent.

As an alternative, most individuals who offered to Opendoor made hundreds of {dollars} lower than they’d have made promoting their properties utilizing the standard course of, the FTC mentioned.

“Opendoor promised to revolutionize the actual property market however constructed its enterprise utilizing old style deception about how a lot shoppers might earn from promoting their properties on the platform,” Samuel Levine, director of the FTC’s bureau of shopper safety, mentioned within the assertion.

Opendoor mentioned in a separate assertion that the allegations raised by the FTC goal advertising and marketing that the corporate has since modified.

“Whereas we strongly disagree with the FTC’s allegations, our choice to settle with the fee will permit us to resolve the matter and give attention to serving to shoppers purchase, promote and transfer with simplicity, certainty and velocity,” the corporate mentioned.

The FTC mentioned the $62 million is predicted for use to repay shoppers who had been harmed by the alleged Opendoor practices.