Compare Orchard and Offerpad

Editor's Rating

Users' Rating

Editor's Rating

Users' Rating

For Sellers

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

For Sellers

Cash Offers
20%
Home Equity
Offerpad does not provide real estate services to home sellers. Instead, Offerpad buys homes directly, repair and resell them to other buyers or companies that rent them to tenants. Typically an offer equal to 80% of home value is expected from this type of sale after any, fees, cost of the repairs and resale markup.

For Buyers

Not Applicable
0
No Rates
Perch does not provide real estate services to home buyers. Perch 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

Not Applicable
0
No Rates
Offerpad does not provide real estate services to home buyers. Instead, local franchisees buy homes directly, repair and resell or rent them to tenants.
You are now comparing two different service models: Orchard is a direct home cash buyer while Offerpad is a direct home cash buyer
Compare Orchard and Offerpad 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: 17 February 2019
Last updated: 29 March 2020

Buying and Selling with Orchard

Orchard (formerly known as Perch) is a Texas-based VC-backed real estate investor that operates across highly specific locations. Where available, Orchard mainly focuses on homogeneous homes built before 1978 and where the valuation of the home is between $125,000 and $500,000. In determining the offer, Orchard discounts from the estimated retail value after home is fully renovated. Alternatively, Orchard sometimes acts as a real estate broker and represents consumers as Orchard Realty.

Orchard Pricing

Orchard makes money with a difference between buying and selling each home. This difference is a combination of fees and home value appreciation between what Orchard 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. For Sell Only service, Orchard Realty charges a 6.9% listing fee.

Listing Services

  • This Service Does Not Represent Sellers

Buyer's Agent Services

  • This Service Does Not Represent Buyers

Orchard Editor's Review:

Orchard will buy a home at a price that is below market value due to necessary repairs, renovation, and other factors. After Orchard buys the home, it renovates and resells it for a profit to other buyers or companies that rent homes to qualified tenants.

Orchard claims that its fees are limited by 8.5% Orchard fee, but this fee does not mean that Orchard will offer consumers a fair offer. Orchard is not obligated to present consumers with a fair offer for their property because, unlike a real estate agent, it does not represent consumers when selling a home.

Additionally, similar to a traditional home sale process, the seller is responsible for covering their closing costs. This typically includes (but is not limited to) title insurance policy, attorney and escrow fees, and any HOA transfer fees. With higher fees comes a convenience of an all-cash closing when selling a home. Orchard claims to provide convenience, speed, and certainty of a fast sale.

Dubbed as an iBuyer, Orchard makes an offer on a house within days or hours, but this offer is highly conditional. Each offer Orchard makes is just an estimate, it is non-binding until the company makes a home inspection. At the inspection Orchard 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. When using Orchard consumers agree that company and “any of its affiliates, agents, service providers or assignees may call you, leave you a voice, prerecorded, or artificial voice message, or send you a text, e-mail, or another electronic message for any purpose related to your home sale or purchase.”

Orchard offers fast home sales, but these are typically accompanied by higher fees. Orchard only makes offers to select homes in select regions.

The main disadvantage of using Orchard is high losses in homeowners' equity. Orchard 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, Orchard 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. Orchard is not legally bound to represent consumers, its main legal obligation is to its shareholders.

Orchard'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.

Orchard 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 Orchard'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 Orchard.

Typically Orchard 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 Orchard 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.

Orchard Service Areas:

San Antonio, Dallas-Fort Worth, and Austin

Buying and Selling with Offerpad

Offerpad is a direct home buyer that makes cash offers to sellers as it considers the condition of a home, improvements, home's upgrades, and required repairs.

In determining the offer, Offerpad discounts the offer amount from the estimated retail value after it’s fully renovated.

Offerpad Pricing

Offerpad makes money with fees and a difference between buying and selling each home. Offerpad claims service fees vary between 6% to 10%, plus an additional 1% to 3% of the purchase price in closing costs.

Sellers can also expect to receive an offer that has a built-in margin of 5% to 10% between the market price today and what Offerpad plans to flip the home in the open market.

In summation of all these fees, an offer equal to 80% of home value is reasonably expected from this type of sale after fees and cost of the repairs and resale.

Listing Services

  • This Service Does Not Represent Sellers

Buyer's Agent Services

  • This Service Does Not Represent Buyers

Offerpad Editor's Review:

Offerpad will buy a home at a price that is below market value due to necessary repairs, renovation, and other factors. After it buys the home, it renovates and resells it for a profit to another buyer or another company that rents it out to qualified tenants. With low offer price, comes a convenience of an all-cash closing when selling a home. Offerpad typically provides a conditional offer within 24 hours.

Offerpad will perform a free, on-site inspection of your home within 15 days of the signed conditional agreement. If Offerpad finds something it doesn't like and the sellers decline to make any requested repairs or issue a Offerpad credit it demands, Offerpad can then choose to cancel the contract or may determine that it still wants to move forward with the purchase of the home. If Offerpad elects to cancel the contract, there is no penalty to either party.

Offerpad does not make offers for most homes, it will only make offers for single-family residential homes in areas where it operates, including condos and townhomes, built after 1960, with a value of no more than $500,000-$600,000 as well as fair conditions without any major repairs required. Offerpad will not consider homes with significant foundation, structural or other condition issues.

Typically, Offerpad 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.

The main disadvantage of using Offerpad is high loss in homeowners' equity. Offerpad is a "heavy" model, ready to buy homes in all-cash transactions. As any real estate investor, Offerpad is susceptible to losing money in any given transaction. Offerpad model further suffers from a "double expense" such as paying all the normal transaction costs that come with selling a home—including a commission to a buyer's agent (3%), concessions to buyer, holding costs, maintenance fees, taxes and other costs to list and market the home.

This model is prone to a number of risk factors, high operational costs and a continued need for higher-than-average Return on Investment (ROI) with each flip.

Offerpad is not legally bound to represent consumers, its main legal obligation is to its stakeholders. 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, or how much of homeowners' net equity is lost in the transaction with Offerpad.

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 Offerpad option.

Offerpad Service Areas:

Atlanta, Charlotte, Las Vegas, Los Angeles, Orlando, Phoenix, Tucson, Tampa, Salt Lake City, and Dallas-Fort Worth.