Opendoor Faced Major Losses in August
Posted by Ri Prasad on Monday, September 26, 2022 at 7:03 PM By Ri Prasad / September 26, 2022 Comment
Opendoor’s iBuying program got hit particularly hard last month. Due to lower-than-expected transaction volumes and slowing price appreciation, the company closed 42% of its transactions at a loss. In Q3, the company expects to report more than $175M in losses.
While the market normalization isn’t a bad thing (and might even be a good thing!) for average buyers and sellers, it’s a different story for these companies.
They build their entire business around transactions, so they still need to keep making deals even when they might not be in their favor. Only time will tell if selling at a loss will be good for their business in the long run.
A company that was recently fined for fradulant pratices, may not be a bad thing to see them lose money.
On August 1, 2022, The Federal Trade Commission fined Opendoor $62 million "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."
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