RALEIGH, N.C. (WNCN) — Tech real estate companies have profited off the convenience they offer buyers and sellers.
Companies can make it easier to go through the process of getting your house on the market or going getting into your dream home. But the Federal Trade Commission says that convenience comes at a cost.
The FTC is fining tech real estate company Opendoor for “cheating potential home sellers by tricking them into thinking that they could make more money selling their home to Opendoor than on the open market using the traditional sales process.”
The FTC said rather than saving money, customers who sold to Opendoor typically lost more money than they would have made on the traditional market.
Opendoors signs can be seen on the lawns of many homes across the Triangle. A search of the company’s website shows more than 4,000 homes for sale in the Raleigh and Durham area alone.
“There is nothing innovative about cheating consumers,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection.
Opendoor has now agreed to the following:
- Pay $62 million back to customers
- Stop deceiving potential home sellers
- Stop making baseless claims and instead use competent and reliable evidence to support any representations made about the costs, savings, or financial benefits
In a statement to CBS 17, Open door said, “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. “
They added, “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.”
The FTC said Opendoor defended its business practices calling them “transparent, fair, and accurate.” The Commission said the company would supply potential customers with charts showing their savings using their service versus the traditional market. The FTC said those charts did not reflect the true final costs.
“Too many companies that sell goods or services online or operate web-based platforms think that established consumer protection principles don’t apply to them. That’s a major mistake,” the FTC said.
Click here to read the full complaint against the company.