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Opendoor has agreed to pay $39 million to settle a lawsuit that alleges the company misled investors about the reliability of its pricing technology, according to court documents filed Friday.
The proposed settlement — filed in federal court in Arizona and first reported by Reuters — must still be approved by U.S. District Court Judge Michael Liburdi.
Investors sued the San Francisco-based company in 2022, claiming Opendoor misrepresented its pricing algorithm as an artificial intelligence-powered system that could outpace traditional real estate firms.
In reality, the suit alleges, the platform relied heavily on human input and was just as vulnerable to market fluctuations as any other brokerage.
Opendoor did not admit to any wrongdoing as part of the deal, and it said in a filing that it was settling to avoid the costs and risks of prolonged litigation.
The company did not immediately respond to HousingWire‘s request for comment.
The lawsuit also claims Opendoor’s stock price plummeted more than 94% between its market debut in December 2020 and November 2022.
In a court filing, plaintiffs’ attorneys described the $39 million agreement as “a prompt and substantial tangible recovery.” They said they will seek up to 30% of the settlement — approximately $11.7 million — in legal fees.
Opendoor reported $1.2 billion in first-quarter 2025 revenue, with 2,946 homes sold between January and March.
In 2022, the company bought nearly 35,000 homes, but it acquired just 14,684 in 2024.
At the end of Q1 2025, Opendoor had about 1,050 homes under contract for purchase just and has sought aggressive cost-cutting measures.
Last week, the company laid off 40 employees in a move labeled as a “targeted restructuring,” as it continues to overhaul operations and reduce losses.
The layoffs primarily affected the sales team and come amid a broader shift toward what Opendoor describes as a “multi-product, multi-channel” business model.
Seventy employees were also reassigned to unspecified new roles as part of the restructuring. Previous rounds of layoffs at Opendoors have sometimes topped more than 500 workers.
