The complexity and uncertainty of real estate transactions have long been a source of serious concern for buyers and sellers, as the closure of transactions was usually dependent on many factors, including the sale of the buyer’s existing property and its ability to secure financing. Lately, there has also been an increased risk that someone else will offer a better cash offer at the last moment.
The only thing the buyer can be sure of is that nothing can be taken for granted until the deal is closed.
“I have every possible advantage. I work in real estate technology and a licensed real estate broker “, HouseLight Executive Director Drew Ware told Karen Webster about his personal experience of moving in today’s incredibly competitive housing market. “And yet we lost a couple of houses because of the cash offers.”
This disappointing personal experience was one of the sources of inspiration for HomeLight, as it aims to create what Uher says will be a “no-contingency real estate deal of the future,” in which buyers and sellers can act with much more confidence. real estate transactions will be completed.
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“The idea is that people should be able to buy and sell real estate with confidence,” Uher said. “They need to know that when they enter into a contract to buy a house, that contract will necessarily close, which means there should be no contingencies.”
HomeLight has created a range of contingency management products. Its Cash Offer product, for example, allows a buyer in need of a mortgage to make a cash offer on a home, which ensures that they are more competitive and increases their chances of getting their dream home – often at a lower price.
With so few real estate inventories in the US these days, cash offers have become much more common. Ware explained that home builders have been “building sub-parts” for nearly a decade due to the aftermath of the Great Recession in the late 2000s, when there was too much inventory. Buyers now face the opposite situation: there are not enough homes for sale, leading to a bidding war for the few homes that can be found. This means cash bids are king because they give the seller a lot more confidence than offering someone who still needs funding.
“If you don’t have a cash supply, it’s really hard to become a home buyer right now — it’s almost a necessity,” Ware said.
According to Uher, when people make the decision to buy a house, it becomes a defining moment in their lives, akin to getting married and having children, and therefore they want to achieve this goal at any cost. He believes this is why HomeLight’s offerings resonate with buyers.
“If you’re a buyer and find your dream home, you don’t want to lose it,” he said. “There are other considerations, but more than anything you want to win. The products we have released help our customers to do this. ”
Another way HomeLight tries to avoid contingencies is through an exchange process that saves buyers from having to sell their current home before buying a new one, Ware explained. The offer is in high demand from both buyers and real estate agents, he said, as it transcends the classic iBuying model, providing agents with a strong differentiation that others do not have.
As Ware explained, HomeLight pays a homeowner 90 percent of the value of his home up front even before it is listed. The company then gets its lead agent for the sale of the home at the highest possible price. The buyer receives the remaining 10% of the purchase price minus the 1.5% HomeLight commission.
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“This allows you to maximize the value and make the most money possible for your home, instead of selling it to iBuyer, which will just turn the house over and take all the profits,” Ware said.
Customers can even use two HomeLight products together to further increase their chances: they can trade at home, and they can also use the money offer product to make a solid offer for their dream home.
“We look forward to bringing these products to a wider range of agents because they deliver more value to the right customer,” Uher said. “The demand for this product is huge.”