Are iBuyers like Opendoor still worth considering? Sometimes, for the right situation but go in with clear eyes. Zillow exited the business entirely after more than $500 million in losses and Opendoor's total costs now typically run 7 to 9% of your sale price once fees, closing costs and repair deductions are counted.
During COVID, I recommended iBuyers like Opendoor and Zillow to a few clients myself. Home prices were rising so fast that a slightly-below-market cash offer still felt like a good deal and honestly, sometimes it was. That world doesn't exist anymore. Zillow isn't in this business at all today and it's worth understanding exactly why, along with how Opendoor actually works right now and where a completely different kind of platform, HomeLight, really fits into all of this.
What Happened to Zillow
Zillow shut down its iBuying program, Zillow Offers, in November 2021 after losing more than $500 million, with some estimates of total related losses running closer to $1 billion once every write-down is counted. The company's own pricing algorithm was the problem. CEO Rich Barton admitted Zillow was “unintentionally purchasing homes at higher prices” than they were actually worth and by the time they tried to resell those homes, the market had shifted underneath them. They laid off about 25% of their workforce and walked away from the business entirely.
I think that says a lot about how reliable an automated pricing algorithm actually is, especially in a market that can shift as fast as this one does. Zillow had more data than almost anyone in real estate and it still couldn't make the model work. That's worth remembering any time a company promises a fast, algorithm-driven cash offer.
How Opendoor Actually Works Today
Opendoor is still around and remains the largest iBuyer in the country but the process and the math both look different than they did a few years ago. Here's the actual sequence:
● You enter your address and property details online: square footage, bedrooms, bathrooms, condition, upgrades
● Opendoor generates a preliminary algorithmic offer based on that information and comparable sales
● If you move forward, Opendoor schedules a home condition assessment, essentially their own inspection
● Based on that assessment, they deduct estimated repair and “condition adjustment” costs from your offer
● You accept or decline the updated net offer. You can request a re-assessment if you think the repair estimate is too high but there's no real negotiation
● If you accept, you choose your closing date and get paid within a few days of closing
On the cost side, most sellers should expect a standard 5% service fee, roughly 1 to 3% in closing costs and then repair or condition deductions on top of that, which commonly run another 1 to 3% or more depending on the home. Added together, total costs typically land around 7 to 9% of the sale price and that's before accounting for the fact that Opendoor's initial offer is often already below open-market value to begin with. On a $400,000 home, that can mean $30,000 to $60,000 less than a traditional sale, depending on the home's condition.
Opendoor's reputation is genuinely mixed. They hold an A+ rating with the Better Business Bureau but consumer reviews tell a more complicated story and the most common complaint by far is a preliminary offer that looks appealing, followed by a real cut after the in-person condition assessment. That pattern lines up with what I've seen and heard secondhand as well: the number you see first often isn't the number you actually get.
About That Lawsuit
There are actually two separate legal matters involving Opendoor and it's worth knowing the difference. The first is a 2022 FTC settlement for $62 million, resolving claims that Opendoor's marketing misled home sellers between 2017 and 2019 by advertising they'd receive market value while often paying less and charging more in fees than disclosed. That's the one that directly concerns sellers.
The second is a securities class action brought by investors, not sellers, alleging Opendoor made misleading statements about its pricing algorithm's capabilities around its 2020 to 2021 stock offerings. That case settled for $39 million and was approved by the court in January 2026. It's a real legal outcome, but it's about protecting stockholders who bought Opendoor shares, not about compensating home sellers. If you were asking specifically where the lawsuit stands, both are resolved but they addressed two different groups of people for two different reasons.
HomeLight Isn't Really an iBuyer, It's Two Different Things
HomeLight gets mentioned in the same breath as Opendoor a lot but it's actually a different kind of company and it's worth separating its two products clearly.
Its primary business is agent matching. You answer some questions and HomeLight refers you to a local agent from their network at no direct cost to you. But it isn't free for the agent. HomeLight charges the referred agent a 33% referral fee on their commission when the deal closes, taken off the top before any brokerage split or taxes. That's exactly why I see HomeLight as expensive, not necessarily for the seller directly but for the agent, whose margin and flexibility shrink considerably before they've done any actual work on your transaction.
Separately, HomeLight also offers Simple Sale, a cash-offer program that connects sellers with a network of investors for a fast, as-is sale with no agent commission involved. This is the part of HomeLight that functions more like Opendoor: convenient and quick but offers typically land below open-market value, the same fundamental tradeoff as any iBuyer.
So Is an iBuyer Ever the Right Move?
Sometimes, yes. It genuinely makes sense for a home that needs significant repairs you don't want to front the cash for, an inherited property you need to liquidate quickly, a job relocation on a tight timeline or a seller who values certainty and zero showings over maximizing price. Those are real, valid priorities.
But for a typical home with a normal timeline, the math has shifted since the COVID years I mentioned at the start. The gap between an iBuyer's net offer and a traditional sale's net proceeds is wider now than it was when I was making those recommendations myself, because fees haven't really changed but the urgency that made a slightly-below-market cash offer feel worth it has cooled off considerably.
What I'd Actually Tell You Today
Get both numbers before you decide anything. Ask for the iBuyer's full offer breakdown, service fee, closing costs and repair deductions all itemized, not just the headline cash number, and compare it against a real market analysis of what your home would likely net through a traditional sale. The convenience of a fast cash offer is real, but it has an actual, quantifiable price tag now, not a hypothetical one and you deserve to see both sides of that math before you sign anything.
Frequently Asked Questions
Is Zillow still buying houses?
No. Zillow shut down its iBuying program, Zillow Offers, in November 2021 after significant losses and has not returned to directly purchasing homes.
How much does it actually cost to sell to Opendoor?
Typically around 7 to 9% of the sale price once you add the standard 5% service fee, 1 to 3% in closing costs and repair or condition deductions, and that's on top of an initial offer that's often already below open-market value.
Is HomeLight an iBuyer?
Not primarily. HomeLight's main business is agent matching, funded by a referral fee charged to agents, not sellers. It does separately offer a cash-buyer program called Simple Sale, which functions more like a traditional iBuyer.
Was there a lawsuit against Opendoor?
Two, actually. A 2022 FTC settlement addressed misleading marketing to home sellers. A separate securities class action brought by investors over statements about Opendoor's pricing algorithm settled for $39 million, approved by the court in January 2026.
Weighing an iBuyer Offer?
If you've gotten a cash offer and aren't sure whether it's actually a good deal, I'll run the real comparison with you, your net proceeds through a traditional sale versus what you'd actually walk away with after every iBuyer fee and deduction. Visit MartenTeam.com or book a consultation.
Fee figures reflect publicly reported averages as of 2026 and vary by home, market, and offer. This is general information, not a guarantee of any specific offer or outcome.
