Regulators in North Carolina have disciplined iBuying giant Opendoor, saying the company improperly disclosed information about the homes it was selling in the state.
The disciplinary action is detailed in the North Carolina Real Estate Commission’s (NCREC) April bulletin, which states that Opendoor’s license was suspended for 18 months. However, the bulletin also notes that NCREC stayed the suspension, meaning Opendoor’s license remains active and the company is free to continue operating in the state.
The bulletin states that Opendoor made errors in disclosures on three specific properties. In one case, the company allegedly claimed that a home had an outdoor pool and hardwood and tile floors, but in fact it lacked those features. The bulletin also claims Opendoor didn’t make sure the homeowner addressed issues that came up in an inspection, “and/or failed to disclose any outstanding material items which were not corrected.”
In the second case, Opendoor “failed to pull the septic permit prior to listing the property as a 5-bedroom home,” the bulletin states. The home’s existing septic permit only allowed it to be listed as a three bedroom property.
Finally, in the third case, a vendor Opendoor used buried an outdoor pool beneath the back yard rather than remove it. The homeowner later delisted the property and removed the pool.
The NCREC did not respond to Inman’s request for comment on the situation.
However, in a statement to Inman, Opendoor noted the case represents its first disciplinary action in North Carolina. The statement further explains that regulators gave Opendoor “a way to remedy a license suspension with additional education.” That education “was completed in a timely manner, resulting in Opendoor Brokerage’s license remaining active,” the statement also notes.
“Opendoor Brokerage is still an active brokerage in North Carolina,” the statement added.
The disciplinary action comes as Opendoor continues a rapid expansion that, as of this week, has taken it to 46 U.S. markets. The latest of those markets include parts of New Jersey and New York state, which were just announced Tuesday.
Expanding geographically has also required Opendoor to evolve its business practices; though iBuying historically was concentrated in affordable Sunbelt cities, the concept has since spread to more complex and expensive markets on the coasts. As a result, Opendoor — along with other iBuyers such as Redfin and Offerpad — have gradually begun buying pricier homes.
While the evolution of the sector proved too challenging for rival Zillow, Opendoor reported in February that its revenue jumped 1,400 percent year over year — though the company also saw rising losses and is yet to become profitable.
In any case, Opendoor ultimately struck a bullish tone in its statement, saying it looks forward to continuing to serve customers in North Carolina, “eliminating the friction they have been enduring in the traditional real estate transaction for decades.”
“Our intent,” the statement added, “is to provide transparency to buyers and their brokers in order to facilitate an informed decision.”
Email Jim Dalrymple II