In 2020 and part of 2021 we continued to see the real estate market spike in value. According to Fit Small Business, the average price of newly listed home climbed 32.6% and home buying power increased 21%. Additionally, millennials are expected to form more than 20 million new households by 2025. In a market dominated by cash buyers, younger couples/individuals are continuing to find difficulty in competing with those that are farther along in their financial journey. But, innovations in real estate and property technology are making it possible for first time home buyers to compete in this competitive market.
What is a Cash Offer and What are the Benefits?
A cash offer allows the buyer to purchase the home without a mortgage loan or other financing. If you are buying a house with a traditional mortgage financing can take up to at least 30 days, whereas an all cash purchase can close in as little as 14 days. Sellers are enticed to consider cash buyers over non-cash buyers due to the speed of closing, no financial contingencies, and immediate availability of funds.
If I am a first time home buyer, how can I make an all cash offer?
Companies such as DivvyHomes, Landis, Better, and Ribbon are making it possible for first time home buyers to purchase their dream home. Better’s Cash Offer Program is built for those that are selling their home but are in a competitive buying market where a cash offer will win (4x more likely). The consumer has the ability to work with Better Real Estate and Better Mortgage to seal the transaction. Landis is allowing consumers to purchase their dream home and get coaching on the home ownership process. Landis purchases the home and allows the consumer to save, up to 24 months, toward their down payment for their dream home. DivvyHomes provides an all cash offer for the consumer and then allows the buyer to lease for up to 3 years from DivvyHomes as they prepare for their purchase. Ribbon powers the homebuyer with an all cash offer and gives them up to 6 months to secure financing with their Ribbon Reserve feature.
Cash offer programs are allowing homebuyers that may not be able to compete in a competitive market to purchase their dream home, while also teaching them financial principles along the way to ensure success for the long-term. Innovative real estate and property technologies will continue to power the consumer as they scale their platform. Homebuyers will continue to look for non-traditional ways of securing their dream home.