I see these Instant Offer companies going through all their Venture Capital funding money and go away like Vacation Time Shares have. Using OpenDoor as an example, it has 1.3 Billion in equity with over $300 Billion in Debt financing. The real winners of this will be the guys who started the company and sell their stock and the losers will be the home sellers who lost a lot of their equity and the investors who lent them the 300 billion.
In a home sale transaction, There is a Seller and a Buyer. The Sellers leave the closing table with their equity minus the Commission, Title fees and the negotiated repairs.
In an Instant Offer sale, there is an added Transaction to the process. The Original Seller sells it to the Instant Offer company and the Instant offer sells it to the final buyer. This Instant Offer company charges the seller for these cost in their Transaction Fees.
The Instant offer company is a Middle Man. I have never heard of a Middle Man reducing the cost of any transaction, whether its a home sale, land sale, merchandise sale or crop sale. The Middle Man is going to get his money from someone or he would not be there.
Since the Buyer is not going to pay a Middle Man, it's going to come from the Seller and the equity they have in their home.
You can also say a Real Estate agent is a Middle Man. Some Sellers try selling their homes themselves (FSBO) and if their home is really nice, unique, in a good way, they may do OK. But homes need to be marketed and presented to sell well. They need to be valued correctly. Not low and not high but at fair values. Most Real Estate agents are hard working and honest. They should be local and know the area and the market very well. This is where the agent earns their commission along with a lot of other jobs they perform during the listing and selling process.
An Instant Offer company sells the Idea of an easy, hassle free sale. That is the value they charge their fees for. The cost of this value is huge. As in the example I gave before , over $50,000.
I am just a practical person, I need to see the value of something before I can justify it. So far, from the transactions I've followed, I have not seen the value of the Instant Offer companies.