Bigger. Better. Bolder. Inman Connect is heading to San Diego. Join thousands of real estate pros, connect with the Inman Community and gain insights from hundreds of leading minds shaping the industry. If you’re ready to grow your business and invest in yourself, this is where you need to be. Go BIG in San Diego!
Opendoor has agreed to pay $39 million to settle a federal securities class-action lawsuit that accused the iBuyer of misleading investors about its homebuying algorithm, a Friday court filing in the United States District Court of Arizona reveals.
The lawsuit, first filed in 2022, claimed Opendoor misrepresented the accuracy and effectiveness of its iBuying platform.
“Defendants are entering into the settlement to eliminate the burden, expense, uncertainty, distraction, and risk of further litigation,” the legal filing read. “Defendants have determined that it is desirable and beneficial to them that the action be settled in the matter and upon the terms and conditions set forth.”
The case centers around documents issued in connection with its 2020 merger agreement with Social Capital Hedosophia Holdings Corp. II, a special purpose acquisition company (SPAC) led by venture investor Chamath Palihapitiya, and the February 2021 offering.
Opendoor marketed its platform as a “tech disruptor,” claiming its AI-powered tools could outperform traditional real estate methods by accurately pricing homes for sellers and generating profits through resale. However, the complaint alleges the pricing process relied more heavily on human input than Opendoor had disclosed, and that the company failed to adjust to shifting market conditions.
Concerns intensified in September 2022, when a Bloomberg report revealed that Opendoor lost 42 percent of its home resales the prior month. The report cited an analysis suggesting the company’s algorithm was not keeping pace with a fast-changing housing market.
Following mediation, both parties agreed to settle on March 26, 2025. An official stipulation was filed on June 13 and now awaits approval from U.S. District Judge Michael Liburdi.
Plaintiffs say the settlement offers “meaningful recovery without the delays, risks, and expenses of prolonged litigation, discovery and trial.”
Opendoor’s legal team at A&O Shearman has declined to comment, while the plaintiffs’ legal team at Labaton Keller Sucharow did not immediately respond to requests for comment.
