Wait, you mean I shouldn’t take the first offer I get just because they say it’s the best?
The next thing we’re going to learn is that there really isn’t someone coming in later who’s super interested in the used Honda.
This seems overly nannyish.
The next thing we’re going to learn is that there really isn’t someone coming in later who’s super interested in the used Honda.
This seems overly nannyish.
OpenDoor was reportedly making several false claims, including "we make money from fees (and not by immediately reselling your house for a profit because we bought it below market value)" or "we charge about the same in repair costs as you'd pay on the open market" or "we buy your house at market value (and not intentionally below what we think is market value)."
I'm sure they could have proven all those claims. They could have said "Last year we made $XX Million from fees". Sounds like a big number, but might still have only been tiny compared to market movements.
They could have said "we charge about the same in repair costs as you'd pay on the open market" by just finding one quote from a builder to back it up.
They could have said "we buy your house at market value" by just having a model of market value which tended to lowball valuations - rather than having an accurate model and then putting a " * 0.9" on the output of the model. One way to do that for example would be to build the model on historic data, and ignore the fact that house prices are at all time highs right now. And house prices have been the 'highest ever' for nearly every year in the past 200 years.
It goes beyond lack of data and well into fraud (knowing deception).
See, for example, point 34 of the report:
>Opendoor has used an automated system to generate expected market values for homes. In many instances, Opendoor’s employees have manually adjusted these values before presenting them to consumers as offers. Opendoor’s internal analyses showed that these manually adjusted offers were several percentage points below Opendoor’s assessment of market value. Beginning later than 2019, Opendoor instituted a policy to reduce its manually adjusted offers to [REDACTED] below what Opendoor assessed as market value.
In other words, they’re promising above-market value while actually quoting below even their OWN estimation of market value (which is undoubtedly revised down)
"Keeping sufficient evidence that they were true" implies that the claims were true, which they presumably were not if OpenDoor agreed to a settlement.
> According to the FTC, Opendoor said it would pay market value for people’s homes while saving them money on costs. That way, people selling their homes would make thousands of dollars more than they would on the open market. But, the FTC says, it wasn’t true.
Actual dystopian vibes.