First, Opendoor wanted to make it easier to buy or sell a home. Now, it wants to make it possible to return one.
The online real estate startup will start giving homebuyers who use its service a 30-day window to return a home, a rarity in the real estate industry. Homebuyers will be able to return the home and get a refund, minus closing costs, for any reason during the first month, Opendoor CEO Eric Wu said in an interview.
"Whether it's the noise, commute time, or your neighbors are different than you expected — you can return the home," he said. "Every home buyer should love the home they just purchased."
The return policy is the latest attempt by Opendoor to bring more of the home-buying process online and in line with other types of e-commerce transactions. When the Silicon Valley startup launched in 2014, it allowed homeowners to enter in basic information about their home online and get an offer from Opendoor, based on data it mines, to purchase the home in a matter of minutes.
The startup has raised $110 million from investors and was co-founded by Keith Rabois, the venture capitalist who has held executive positions at Square and PayPal.
In exchange for the speedy sale, homeowners were expected to sell for a discount to the going market rate, Wu previously told Recode. Wu now says the company aims to offer market rate to sellers, though two out of three who receive offers do not accept. Opendoor generates revenue by charging a fee to sellers of 6 percent to 12 percent — the low end of that range is what realtors typically charge today.
Opendoor resells the homes it buys and lists those homes for sale on its website. The company says it does repair work where needed and allows prospective buyers to check out a home whenever they want. Besides the new 30-day money-back guarantee, Opendoor homes now come with two-year warranties on items including major appliances and heating and air conditioning systems. The startup is also providing a 180-point inspection report to each buyer.
"In a typical process, the seller will allow you to get your own inspection and not expose anything," Wu said. "There's really not a lot of transparency."
The new return policy comes with potential pitfalls for the startup. If a home is returned, Opendoor has to buy it back and find a new buyer. That means sitting on the home longer than it would like.
There's also the potential that a homebuyer could try to abuse the policy, though one would think that the hassle of moving combined with closing costs that don't get refunded would limit this.
But if Opendoor is going to be successful, it's going to have to give buyers big reasons to eschew the traditional home-buying approach. A refund policy is a good start.
This article originally appeared on Recode.net.