‘I was getting screwed’: Phoenix mom seeks share of $62M Opendoor settlement
PHOENIX (3TV/CBS 5) - Celeste Strong had a lot of good memories with her family at their home in Phoenix. “It was my first home,” she said. “I loved the pool.” In early 2020, Strong decided to sell.
The single mom needed the transaction to happen quickly. “I was on the verge of bankruptcy,” she said. “I knew the only thing I could do to fix that was sell the home.” She found Opendoor, the Tempe-based online real estate company did an inspection and made her an offer. “They said they couldn’t find a permit for the addition, so they were going to not only not pay me for that square footage but they needed to tear the room down and the debris removal and so they were going to charge me for all of that,” Strong said.
There was also a price reduction for bathroom renovations, but before closing, a pipe burst in the wall between two bathrooms and Strong ended up filing an insurance claim and repairing and remodeling both. “[Opendoor] did the second inspection and they said at the end of the day, you didn’t have to do it. We could have done it so we’re not going to concede to anything for those repairs,” Strong recalled.
She believes she was shortchanged at least $20,000. “I was getting screwed,” she said. “They knew the position I was in. When all was said and done, I didn’t have the capability of stopping the process and trying to go a different way. They’ll say that I did. In the documents, you can cancel anytime up to closing, but then what would I do? I already got a house. I couldn’t do rent and a mortgage. Really, I was stuck.”
Strong’s story is familiar. As On Your Side reported in August, the Federal Trade Commission and Opendoor reached a $62 million settlement to resolve a slew of allegations about misleading potential sellers, requiring costly repairs that sellers wouldn’t have had to make in a traditional sale, and undervaluing homes. On Your Side followed up with the FTC to find out how people can get their share of the settlement. The agency hasn’t said how many consumers will get money back or when it will happen, but encouraged consumers who think they are owed money to file a complaint. Consumers who submit a complaint should include information to support the allegations. The information is kept in a database and used to help determine who had problems with a company, according to a spokesperson for the FTC.
In a statement immediately following the settlement, Opendoor said the company strongly disagrees with the FTC’s allegations. “Since our founding in 2014, Opendoor set out to drastically simplify the real estate transaction, redefine the housing market, and make buying and selling a home as easy as a tap of a button – bringing transparency, competition and convenience to the antiquated and offline home transaction for consumers. And data shows that our customers value and adopt Opendoor; in fact, we maintain an NPS well over 80 and have maintained a real seller conversion of over 35 percent. While we strongly disagree with the FTC’s allegations, our decision to settle with the Commission will allow us to resolve the matter and focus on helping consumers buy, sell and move with simplicity, certainty and speed,” the company said. “Importantly, the allegations raised by the FTC are related to activity that occurred between 2017 and 2019 and target marketing messages the company modified years ago. We are pleased to put this matter behind us and look forward to continuing to provide consumers with a modern real estate experience.” A spokesperson for the company referred On Your Side’s questions about the distribution of settlement funds to the FTC.
After Strong closed on her home, she couldn’t help but look at the new listing for her old place. The addition was still there. “They listed the house and sold it for the original square footage that they told me they could not pay me for,” she said. “They absolutely took advantage of me.”
It’s why Strong is hopeful she will be compensated now. “I think I would feel some sense of closure,” she said.
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