Compare Opendoor and Tomo

For Sellers

Cash Offers
15%-20%
Home Equity
Opendoor does not provide real estate listing representation. Instead, the company buys homes directly, repairs and resells them to consumers or companies that rent them to tenants. Opendoor makes an offer equal to 80%-85% of home value accounting for fees and any cost of the repairs and resale.

For Sellers

Not Applicable
0
No Rates
Tomo Brokerage does not currently allocate home sellers to listing real estate agents.

For Buyers

Not Applicable
0
No Rates
Opendoor does not provide real estate services to home buyers. Opendoor does resell some of the homes it buys on the open market, just like any other real estate investor aiming for the highest return on investment.

For Buyers

Partner Agents
25%-35%
Referral Fee
Tomo Brokerage is a paper broker that does not provide real estate services to home buyers. Instead, this company allocates consumers to real estate agents in exchange for a hidden referral fee, likely set at 25%-35% of their entire commission. Tomo, via Tomo Mortgage, LLC mortgage brokerage further price fixes buyer commission rebates by converting commission kickbacks into discounted interest rates by offering a “perk” of 0.125% against the quoted interest rate in an effort to entice more consumers into the price fixing scheme with Tomo Brokerage
Question: What is the difference between Opendoor and Tomo?
Answer: Opendoor is a direct home cash buyer that buys select homes off-market with cash offers and resells them at a profit to homebuyers while Tomo is a referral fee network that enables broker-to-broker collusion with use of blanket referral agreements
Compare Opendoor and Tomo for home buying and selling. HomeOpenly is an impartial and an open resource focused on trending real estate services, portals and start-ups.

First published: 03 July 2021
Last updated: 03 July 2021

Buying and Selling with Opendoor

Opendoor is a multi-state VC-backed real estate investor that operates across highly specific locations. Where available Opendoor mainly focuses on homogenous homes built after 1960 with a value between $125,000 and $500,000.

In determining the offer, Opendoor discounts from the estimated retail value after home is fully renovated.

Opendoor Pricing

Opendoor makes money with a difference between buying and selling each home. This difference is a combination of fees and home value appreciation between what Opendoor buys and seller each home for. Sellers can expect to receive 80%-85% of their home value from this type of sale after any fees, cost of the minor repairs, and resale.

Listing Services

  • This Service Does Not Represent Sellers

Buyer's Agent Services

  • This Service Does Not Represent Buyers

Opendoor Editor's Review:

Opendoor will buy a home at a price that is below market value due to necessary repairs, renovation, and other factors. After Opendoor buys the home, it renovates and resells it for a profit to other buyers or companies that rent homes to qualified tenants. With low offer price, comes a convenience of an all-cash closing when selling a home. Opendoor claims to provide convenience, speed, and certainty of a fast sale. Dubbed as an iBuyer, Opendoor makes an offer on a house within days or hours, but this offer is highly conditional. Each offer Opendoor makes is just an estimate until it makes a home inspection.

At the inspection, Opendoor will often find reasons to lower its original offer when it finds items that need repair or if it has made a mistake in its original valuation. When the company is unable to make an offer, it simply redirects consumers to a random real estate agent in exchange for an undisclosed referral fee. Opendoor offers fast home sales, but these are typically accompanied by higher fees (starting at 6% and rising to 12% for more risky properties.)

Opendoor only makes offers to select homes in select regions. Opendoor claims that it provides market offers, but we find this not be true. Search for past Opendoor transactions makes it clear that company also makes money with home appreciation difference (typical appreciation of 5.5% to 12.5%) between what it buys houses for and what it sells them for in addition to service fees. The main disadvantage of using Opendoor is high losses in homeowners' equity.

Opendoor is a "heavy" model, backed by a large amount of VC capital ready to buy homes in all-cash transactions. As any real estate investor, Opendoor is susceptible to losing money in any given transaction. This model is susceptible to a number of risk factors, high operational costs and a continued need for higher-than-average Return on Investment (ROI) with each flip. Opendoor is not legally bound to represent consumers, its main legal obligation is to its shareholders.

Opendoor's fast transaction and easy move-out experience typically come at an extremely high price because this model incurs "double" transaction costs during the purchase, holding period, rehab work and final sale that includes real estate agent fees. Opendoor pays real estate agent commissions like any other buyer and seller of real estate, so these costs must be accounted for in the company's fee structure. The facts continue to point against Opendoor’s claims that it offers fair value for the houses it buys.

Moreover, because most homes in the United States are financed, homeowners own only partial net equity in their home. Banks receive the same amount of the remaining mortgage sum regardless of how any given home is sold, whereas only homeowners' net equity is lost in transaction fees paid to Opendoor.

Typically Opendoor uses the following factors when determining the offer: existing condition of the home including repairs needed, time it will take to finish needed repairs, value of a home compared to other comparable homes in the area, real estate commission required to resell, costs associated with maintaining a home during repairs, including taxes, payments, insurance, utilities and homeowner dues.

Today, there are a number of highly qualified real estate agents who offer competitive listing rates and flat fee listings across the United States. Unless a situation absolutely requires a quick sale, HomeOpenly recommends that consumers first consider using a licensed real estate agent working on competitive terms to properly list their homes on the open market before turning to Opendoor option.

Some real estate agents are now offering Concierge services that include painting, landscaping, and other services that help consumers place their home on the open market without upfront costs and high loss to home equity.

Conflicting Incentives for Consumers

Opendoor, when it acts as a real estate investor, further offers 1% of the purchase price back at closing to work with an Opendoor Home Advisor to buy an Opendoor home. According to the company, Opendoor must not be obligated to pay any buyer's agent commissions for this promotion to apply. Having to require such terms limits consumer's ability to use an independent buyer's agent in a transaction. In effect, Opendoor offers a buyer an incentive to forgo independent representation in exchange for a 1% discount. Consumers should never be financially incentivized by a real estate investor to limit their representation when buying real estate from them.

In contradiction to this incentive, Opendoor Terms of Service directly state that: "in making you an Opendoor Offer, Opendoor is not acting as your real estate agent or broker. Opendoor is merely acting as, or on behalf of, a purchaser of real estate. As a seller, you have the right, and it is your responsibility, to independently evaluate and decide whether to accept the Opendoor Offer."

Company further states: "Buyer represents that she has had ample opportunity to obtain legal and other professional counsel of its choosing and that it is relying solely on its own independent judgment and that of its own professional consultants, if any, in entering into the purchase contract and purchasing the property."

From one side, Opendoor offers consumers an incentive in an exchange for "not being obligated to pay any buyer's agent commissions," but from another, requires buyers to "represent that they have had an ample opportunity to obtain legal and other professional counsel." These two propositions contradict each other.

Conflicting Incentives for Listing Agents

Further, Opendoor improperly offers financial incentives to listing agents to help convince consumers to take lower-priced offers from the company, instead of listing homes on the open market. iBuyer offers, accounting for fees and reduced market value, are systematically the most expensive way to transfer ownership.

In this scheme, a listing agent is offered a financial incentive from Opendoor to bring their client to the company for a pre-market offer. No real estate investor (iBuyer) should be able to offer any financial incentive to a third-party representative to persuade consumers to accept their low offers. By offering a fixed financial incentive (currently set as 1% fee of the whole transaction) to listing agents upon acceptance of an Opendoor offer, the company acts to create a conflict of interest between a listing agent and their (present, or potential) client.

A listing agent, in this case, has to choose between having to properly represent a consumer to sell thier home in the open market subject to a competitively negotiated commission, or getting a quick pre-fixed "incentive cash" for handing them off to Opendoor.

Opendoor can change this incentive amount at any time. Today, the company offers 1% incentive of the entire home sale to the listing agent, tomorrow, the company decides to set this incentive at 2%, 3%, 4%, 5% or some other pre-fixed amount, as it likes.

Such incentives are a form of price-fixing and directly affect listing agents' ability to work with their clients on fair terms. Further, these incentives remove listing agents' and consumers' abilities to negotiate home sale representation fees (listing commissions) in a competitive setting.

Opendoor Brokerage

Opendoor is a parent company of Opendoor Brokerage, but they are two distinctly different legal propositions. Opendoor is a real estate investor (iBuyer) and Opendoor Brokerage is a licensed real estate broker. For this reason, HomeOpenly maintains two separate reviews for these entities. All user reviews and the editor's review for Opendoor Brokerage are located here.

Where does Opendoor operate?

Opendoor currently operates in select areas across Phoenix, Dallas-Fort Worth, Las Vegas, Atlanta, Orlando, Raleigh-Durham, San Antonio, Charlotte, Nashville, Tampa, Minneapolis-St. Paul, Houston, Sacramento, Riverside, Denver, Portland, and Austin..

Buying with Tomo Brokerage

WARNING: Unlawful Kickbacks, Broker-to-Broker Collusion, False Marketing, Wire Fraud, Price Fixing.

Tomo is a broker-to-broker collusion scheme, where "partner agents" unlawfully agree to pay massive kickbacks to receive your information and engage in market allocation, consumer allocation, false advertising, unlawful kickbacks, wire fraud, and price-fixing practices in violation of, inter alia, 18 U.S.C. § 1346, 18 U.S.C. § 1343, 15 U.S.C. § 1, 15 U.S.C. § 45, 12 U.S.C. § 2607, 12 C.F.R. § 1024.14. As a consumer, you will always significantly overpay for Realtor commissions subject to hidden kickbacks and pay-to-play steering promoted in this scheme.

United States federal antitrust laws prohibit consumer allocation and blanket referral agreements between real estate companies.

Be smart; do not allow your information to be "sold as a lead" to a double-dealing Realtor in exchange for massive commission kickbacks paid from your future home sale, or your future home purchase.


Tomo Brokerage is a paper brokerage that operates a consumer allocation and a price fixing scheme designed to collect hidden referral fees by matching consumers with local real estate agents willing to pay it. Tomo Brokerage operates under a Texas TREC License #9010749 issued to Tomo Brokerage, Inc., but it does not produce any services that are typically offered by real estate agents and does not represent consumers when buying or selling real estate in any State.

In exchange for matching consumers with an Tomo Brokerage Partner Agent, Tomo Brokerage is compensated by the Partner Agent with a hidden kickback, likely 25%-35% cut of their commission. The company partnered with real estate coach Tom Ferry to build out their collusion scheme with a network of independent agents across multiple states.

Tomo Brokerage Pricing

Tomo Brokerage revenue comes from the use of blanket referral agreements with random real estate brokers. Tomo Brokerage is a broker-to-broker collusion scheme that scrubs consumers' information from their mortgage operations and passes it along to a colluding broker who is willing to pay for it with a cut of their commission. Tomo Brokerage’s blanket referral agreements effectively operate on a longstanding myth that buyer agents work for free. In reality, a homebuyer can negotiate a sizable commission refund with a competitive buyer agent in 40 US states from the Buyer’s Agent Commission (typically offered at 2.5%-3% BAC) received.

Tomo Brokerage, in effect, operates as a price-fixing scheme that converts a small portion of the kickback they receive into "perks." Tomo dangles these "perks" as carrots in front of consumers, currently fixed at an interest rate set discount at 0.125% if customers use a Tomo Brokerage Partner Agent. These “perks” savings, in reality, are dismal, compared to thousands in kickbacks received by Tomo for the act of pay-to-play steering. In this scheme, consumers end up giving up an opportunity to receive massive amounts of cash rebates (thousands or tens of thousands depending on the overall home price) available to them in the open market from highly competitive agents who offer in legitimate tax-free buyer’s cash refunds to compete for homebuyers’ business.

Listing Services

  • This Service Does Not Represent Sellers

Buyer's Agent Services

  • This Service Does Not Represent Buyers

Tomo Editor's Review:

Tomo claims to be a different consumer-focused company, but in reality, it is in of the worst VC-backed real estate pay-to-play consumer steering schemes. For consumers, Tomo Brokerage promises a real estate agent “concierge” platform for top local real estate agents. By gathering consumers’ home preferences and budgets while shopping for a mortgage with Tomo Mortgage, Tomo Brokerage scrubs users’ information and feeds it into their limited pay-to-play network of real estate brokers. According to Tomo's website Privacy Policy, they sell consumers’ information to any number of other services. This pay-to-play dynamic is unlikely to represent the consumer’s best options. Whoever pays Tomo some form of kickbacks, in effect, is who they pass consumers’ information to:

“In some circumstances, we share your information with third parties not owned by or co-branded with Tomo Mortgage that benefit directly from our sharing your information with them.”

Tomo Mortgage may even sell consumers’ information to competing lenders:

“Third-party lenders. If Tomo Mortgage cannot finance your home, we may share your personal information with one of our partner lenders.”

Tomo further may attempt to sell consumers’ information to random home insurance companies:

“Home insurance agencies. If your real estate transaction is such that you may need homeowners insurance, we may share your information with homeowners insurance agencies and those agencies may reach out to you directly to offer you a quote.”

For real estate professionals, Tomo Brokerage promises a “no upfront costs” lead generation by scrubbing consumers’ information when they shop for their mortgage. Once a potential homebuyer is identified, a Tomo Brokerage initiates a transfer to the Partner Agent. Tomo Brokerage representatives give Partner Agents all the background information on the homebuyer to make the transition.

In other words, Tomo Brokerage is a consumer allocation scheme between licensed real estate brokers that scrubs consumer’s information and passes it along to a broker who is willing to pay for it with a cut of their commission. If a broker is unwilling to give a portion of their commission to Tomo Brokerage, the company has no interest in recommending them. Tomo Brokerage further takes no responsibility for any of the actions of the brokers that they allocate to consumers.

In effect, Tomo Brokerage is a self-serving scheme designed to funnel consumers toward brokers who pay them a hidden kickback at the close of consumers’ transactions. Consumers using Tomo Brokerage have zero control over what agents the company shares their information with. Instead of being scrubbed and sold as leads, consumers looking for a competitive and fair representation can consider negotiating directly with real estate agents, or with help from unbiased consumer-focused online services that do not collect kickbacks.

Tomo attempts to present this pay-to-play scheme differently:

"Tomo Brokerage only works with Partner Agents that meet its high standards of customer-centric service, and they have to be experts in the areas you want to live in. They help you hone in your search criteria, find great homes, negotiate a great deal, and navigate the entire process. They can also help you identify qualified professionals to put the finishing touches on your new home."

These claims are entirely false. Tomo Brokerage only works with brokers who pay them kickbacks. These agents engage in consumer allocation with Tomo Brokerage. The act of consumer allocation between licensed brokers is a prohibited practice in the United States, by the virtue of the Sherman Antitrust Act. Tomo Brokerage Partner Agents are unlikely to have consumers' best interests, and, because they have to pay a kickback, they do not earn their full commissions. In effect, these agents work for consumers half the time, and for Tomo, the other half.

Even considering the overall dishonesty, kickbacks, and legal implications of the scheme, a consumer can technically still use Tomo Mortgage and freely negotiate a competitive buyer refund elsewhere on the open market with any agent.

There are honest and competitive buyer agents who are willing to share a cut of their commissions with consumers, as a legitimate way to earn business, rather than paying hidden kickbacks to Tomo Brokerage. Tomo Mortgage does not require consumers to use Tomo Brokerage, but it instead dangles an interest rate discount (set at 0.125%) so that homebuyers think that there are savings available to them. Tomo Brokerage's hidden kickbacks cost consumers thousands in properly negotiated fees while funneling hidden fees back into the scheme itself. These hidden kickbacks, eventually, reside in consumers’ mortgages and collect interest.

Price Fixing with Tomo Perks

Broker compensation fees must never be fixed via agreements between two or more brokers anywhere in the United States. All commissions and rebates must be set by each real estate agent individually and may only be negotiable between the consumer and the real estate agent. Buyer agents never work for free.

Genuine quality and honest real estate professionals establish pricing for their services independently, and without any kickbacks. The truth is, every single agent is different, and every single agent has an individual commission structure. If an agent is unwilling to negotiate competitive buyer rebate terms in compliance with the law, there is no reason for homebuyers to assume that they will be willing to negotiate competitively when it comes to their home purchase.

In combination, Tomo Mortgage and Tomo Brokerage terms equate to price fixing rates of independent real estate professionals who do not work for either one of these entities. Price fixing between independent business entities is a felony everywhere in the United States.

Tomo Perks Terms and Conditions

Subject to the following terms and conditions, customers who buy a home with Tomo Mortgage and a Tomo Brokerage Partner Agent qualify for Tomo Perks, which lowers their mortgage interest rate by 0.125%:

Tomo Brokerage Partner Agent. The customer must be party to a fully executed home purchase contract that identifies a Tomo Brokerage Partner Agent as their real estate agent, and Tomo Brokerage must have a record of referring the customer to the Partner Agent.

Tomo. The customer must purchase the home referenced above using a mortgage loan from Tomo with a loan amount of at least $150,000.

Rate Lock. The Tomo Perks interest rate reduction will be applied when the customer locks in their interest rate.

Modification. Tomo may modify the terms of Tomo Perks, but when it does so they will be modified only for customers who entered into purchase contracts after the date the program terms were modified.

Consumer Allocation

Tomo Brokerage is a broker-to-broker collusion scheme. All Partner Agents agree to pay Tomo Brokerage a pre-arranged referral fee, on all closed transactions, through their employing broker. A referral agreement between Tomo Brokerage and a Partner Agent for a random transaction that may or may not happen sometime in the future is executed in advance.

Tomo Brokerage engages in consumer and market allocation agreements with Partner Agents brokerages, because it is a broker itself. Instead of representing consumers to help buy and sell homes, this “paper” brokerage actively disengages from its licensed activities so that every Partner Agent knows that Tomo Brokerage, Inc. will not compete with them. Tomo Brokerage does not act in a real estate brokerage capacity, instead, their real estate license is used to collect a blanket referral fee from the largest number of brokers possible.

Sherman Antitrust Act effectively requires all active real estate brokers to proactively compete for consumers. An agreement or an understanding between brokers not to compete for a mutual benefit is a "per se" violation of antitrust regulations in the United States.

The amount of a referral fee between brokers must be negotiated with respect to an individual transaction. It is a per se violation of the Sherman Antitrust Act for real estate brokers to agree on a “standard” referral fee that will be paid for producing a client. Real estate professionals are not allowed to enter into blanket referral agreements between one another because such agreements always restrict free trade.

Brokers are not allowed to organize their operations into any collusion schemes and networks, and instead, all brokers must compete for consumers on a fair playing field. Legitimate agents who choose NOT to engage in the Tomo Brokerage “no upfront costs” scheme are harmed as well because consumers are steered away from them in a highly competitive real estate market.

Kickbacks and Unearned Fees

RESPA, among other things, is designed to prohibit abusive practices such as kickbacks and referral fees between mortgage companies and real estate brokers.

The statutory exemption for a payment to a cooperative brokerage and referral arrangements between real estate agents and real estate brokers requires all agents to compete against one another. To comply in good faith with RESPA (12 U.S.C. 2607) Section 8 exception for cooperative brokerage and referral arrangements, legitimate real estate agents must render referral agreements in a particular instance for a particular transaction.

Actions of Tomo Brokerage “paper” brokerage directly increase the costs of owning homes in the United States due to added blanket referral fees, consumer allocation practices, price fixing, and reverse completion between brokers. Partner Agents in the scheme have no incentive to compete for consumers individually with lower fees, instead, they have an incentive to compete for Tomo Brokerage’ attention. In this scheme, both colluding parties benefit from offering consumers higher commissions. Tomo Brokerage promotes Partner Agents as somehow “superior” to those outside of the network, thus limiting free-market competitive forces and steering consumers in self-interest toward a network of very few agents who chose to agree to participate in the scheme.

Similar attempts to by-pass RESPA prohibition against kickbacks by means operating a paper brokerage in a combination with services of a mortgage broker are not new. Similar schemes include:
Blend and Blend Brokerage
Better.com and Better Real Estate
HomeStory and a number of third-party lenders
Rocket Mortgage and Rocket Homes
loanDepot and mellohome
Nationstar Mortgage (dba Mr. Cooper) and Xome
and possibly some others. CFPB is currently investigating at least one of these schemes, Rocket Homes, and consumers must exercise great care to protect themselves in the meantime. A real estate home purchase is one of the most important transactions and it must be free from hidden kickbacks and self-steering.

In the real world, Tomo Mortgage and Tomo Brokerage are a single company, both designed and built with massive VC capital to rake hidden fees, by-pass RESPA, collude with independent brokers for a cut of their commissions, and openly price-fix services of others.

The entire RESPA prohibition against kickbacks was enacted specifically to stop mortgage companies from entering into “symbiotic relationships” with real estate brokers. Tomo Brokerage may seem like a clever by-pass of RESPA’s prohibition against kickbacks, but this loophole is built entirely on the use of blanket referral agreements between brokers designed to restrain free trade.

As an active licensed brokerage, Tomo Brokerage owes absolutely no duty of care to consumers, takes no responsibility for the transaction, and does not help consumers to buy homes - all despite receiving a direct financial benefit from the home purchase completed by the homebuyer.

Where does Tomo operate?

Tomo currently operates in select areas across Dallas-Fort Worth, TX, Houston, TX, Seattle, WA.