Opendoor has officially filed its announcement to go public after announcing its merger with Social Capital Hedosophia Holdings Corp. II in September. But the filing also revealed that Opendoor is under investigation by the Federal Trade Commission over its advertising practices.
According to the filing, Opendoor in 2019 received a civil investigative demand.
“In August 2019, the FTC sent a civil investigative demand (CID) to Opendoor seeking documents and information relating primarily to statements in the company’s advertising and website comparing Opendoor’s offers to purchase homes to selling in a traditional manner using an agent and statements pertaining to Opendoor’s offers reflecting or being based on market prices,” the filing said.
Inman first reported on the investigation, which was disclosed in the company’s S-4 statement. As of Oct. 1, the investigation is ongoing, the filing says.
Opendoor has been busy over the last few months. As of Aug. 18, Opendoor has resumed iBuying in all 21 of its markets following a pause due to COVID-19. In the filing, Opendoor said “we are just scratching the surface today. We believe we have a massive opportunity to expand our to reach the top 100 markets in the United States.”
On August 28, the iBuyer launched a brokerage. In the filing, Opendoor said that it is “on the path to build a digital, one-stop shop that simplifies and streamlines the entire moving process.”
Opendoor currently offers title insurance, escrow and Opendoor Home Loans, “with plans to add more services over time.”
“We expect to continue to build out our product suite in order to deliver a simple, online one-stop shop to move,” Opendoor said.
For much of 2020, government edicts related to the pandemic had a dramatic affect on Opendoor’s business. In the first half of 2020, Opendoor said it sold 7,832 homes, compared to 8,985 homes in the first half of 2019, representing a decrease of 13%.
Opendoor made $1.9 billion in revenue in the first six months of 2020, slightly below the $2.2 billion from the first six months of 2019. Overall, Opendoor posted a net loss of $118 million from January through June 2020.
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