Signs that the housing market is cooling are here. The news may dampen the spirits of real estate agents and home sellers who have taken advantage of sky-high housing prices. However, the news is likely to come as a relief to would-be homebuyers who have had a tough time in an ultra-competitive market.
However, a cooling housing market comes with its own set of problems for buyers. Interest rates have climbed substantially from the historic lows of late 2020. Housing prices may not be skyrocketing, but they may not come down anytime soon. And as competition shrinks, the likelihood that buyers can purchase a new home at the same time as they sell their current home becomes more unlikely.
Your clients will need help buying and selling their home in an increasingly volatile market. Your client may need to buy a new home before selling their current one, or they may need to make a cash offer to eliminate deal-stalling contingencies. Luckily, Homeward’s innovative homebuying and selling solutions address both, adding a sense of calm and stability to the process–and all while keeping agents directly at the heart of the transaction.
Homeward empowers cash-strapped buyers to Buy before they sell
A cooler market means homeowners are likely to experience difficulty lining up the sale of their home with the purchase of their new one. Homeward solves this tricky conundrum with our Buy before you sell solution. The process is surprisingly simple:
- Your client gets approved for a set amount, enabling them to make an offer as soon as they find a suitable house.
- You work with us at Homeward to make a cash offer on the house.
- You win the offer, we finalize the sale, and your client moves in as soon as the title is ready.
- Your client purchases the house back from Homeward as soon as their mortgage is ready.
- Your client pays a small monthly fee as they wait for their former home to sell.
- If approved ahead of time, Homeward will buy their old house from them if it doesn’t sell within six months.
All Buy before you sell offers are made in cash. Cash offers grew in popularity over the last few years in the hot seller’s market as ways to make offers more attractive to homebuyers. While homebuyers are likely to find the current market more buyer-friendly than it was at the height of the pandemic, cash offers remain attractive to sellers in any market.
Homeward solves a problem common to many people wishing to make a cash offer: Most people’s wealth is often tied up in their current home. This makes it difficult to unlock the liquid cash needed to make a cash offer. The median value of assets in the average American’s bank account only totaled $5,300 as of 2019 per the Federal Reserve. Meanwhile, the National Association of Realtors estimates the median price of a house in May 2022 at just over $407,000.
This issue was one all-too-familiar for Tim Heyl, founder of Homeward. As a former real estate agent, he saw how difficult it was for his clients to purchase a new home while their equity was trapped in their current home. He saw that this lack of liquidity coupled with the need for cash created the following catch-22:
- A homeowner needs to sell their house to raise enough cash to make a cash offer.
- They need to buy a new house before they can sell their current one.
- Sellers keep rejecting their offers in favor of cash ones …
- … but they need to sell their house to raise enough cash to make a cash offer.
Eventually, Tim used money from his own savings account to purchase the house for his clients. Once his clients were approved for a mortgage, they purchased the house back from him — and the idea for Homeward was born.
Homeward’s Buy with cash provides stability for the seller
Sellers prefer cash offers over traditional ones because cash supports a stable, easy, and expedient closing process in any market. Signs indicate the market is cooling, but competition will remain as demand exceeds supply. The National Association of Realtors estimates that four offers are placed for every residential property sold. Supply issues fuel this competition, with Realtor.com estimating that 5.8 million homes need to be built to bridge the gap between supply and existing demand.
Your clients will always need to find ways to make their offers stand out to sellers — and Homeward can help. The biggest advantage of cash offers to sellers is that they eliminate potentially deal-breaking contingencies. Sellers enjoy Homeward Cash Offers specifically because:
- Most traditional transactions include a “financing” contingency that allows buyers to back out if they can’t secure a mortgage. Homeward approves your clients for a certain amount ahead of time, so sellers know the money is guaranteed.
- Most traditional home sales include a “house sale” contingency that allows buyers to back out if their home doesn’t sell within a set time. Buy before you sell eliminates the need for this pesky contingency.
- Sellers know eliminating contingencies not only reduces the risk of a sale falling through, but it also speeds up the closing process.
Denver homebuyers Austin and Lewis experienced issues with contingencies as they tried to upgrade from their starter home. The couple saw 20 to 30 houses and made numerous offers before realizing that their home sale contingency proved a non-starter. Per Lewis:
“The home sale contingency really hobbled us. We’d put together a good offer, but when the seller saw the contingency, our offer would go to the bottom of the stack.”
After their real estate agent recommended Homeward, Austin and Lewis decided to give it a try. They were approved for a Homeward Cash Offer and soon made an offer on a home. Despite being one of 24 offers, their offer was the one that was accepted — an outcome aided by their lack of a house sale contingency.
Homeward keeps agents at the heart of the transaction
Homeward was founded (and is currently operated) by real estate agents, so we’re keen on building a tool that supports agents. PropTech tools too often grant assistance at a great cost to real estate agents. Sometimes they aim to cut real estate agents out of the equation entirely. Other times, a product will give real estate agents great insights or assistance — but for a chunk of their commission.
The experience with Homeward is altogether different. We’ll work closely with you during the home sale process to ensure everything goes according to plan, but it’s ultimately your client who transacts with us. Meanwhile, you get to keep 100% of your commission while getting credit for suggesting Homeward in the first place.
Homeward’s agent-friendly focus makes it an indispensable tool for agents looking to get a win for clients who’ve been having a hard time closing in the current market. Grant Rothberg, a celebrated Houston-area realtor, appreciates the added value Homeward brings to his already formidable real estate skills:
“I recommend Homeward whenever possible because I know it gives my clients the very best chance to land the house they want the first time. I wouldn’t be doing my job if I knew there was a tool like Homeward and I didn’t advise every client to use it.”
“It’s a really great tool. I mainly work with first-time homebuyers, and it helps to have Homeward available. It builds a lot of trust when I can say, ‘I’ve got this option that I guarantee can give you better odds of getting the home you want.’”
Use Homeward’s pain-free cash offers to seal the deal
You know too well what it’s like to lose out to a cash offer. Now imagine this: Your clients discover the house of their dreams. You suggest Homeward as a way to sweeten their offer. Despite a dozen competing bids, your clients win out, close quickly, and live happily ever after. You get the credit — and you keep every penny of your hard-earned commission.
As cash offers continue to create unique solutions in an increasingly complex market, the choice is clear: Use a Homeward Cash Offer to win for your clients and avoid losing out to homebuyers who started using it first. Your clients will thank you.