The real estate market is in an unprecedented spot with home supply at a shocking low and through-the-roof prices that reflect it. In some ways, even the top market experts are at a loss about when the other shoe is going to drop. But one thing that is clear to everyone is this: cash offers always get priority attention, giving buyers a whole lot of negotiating power from the jump.
If there were any question that cash is king in the post-pandemic housing market, there’s good data to back it up. According to a Redfin survey reported by the New York Times, buyers who offered all cash almost quadrupled their chances of winning a bidding war. Read that again if you need to — it’s a wild stat. Multiplying a buyer’s chances of getting a home in this market by that much is a pinch-me-I-must-be-dreaming scenario, but that’s where we’re at right now. Cash carries a lot of weight in uncertain economic landscapes.
The Problem: Buyer Cash Flow
Of course, the obvious issue we face is that most folks don’t have the kind of cash on hand to pay for a home up front. For brokers, there are a few ways to approach this and position clients for success. Our previous blog post on how to stay ahead of the curve in a rising-rate market sheds light on various MLO resources like home loan education tools and certification for specialty loan products to help you provide value no matter what the market looks like.
In addition to these resources, there’s another new and exciting program targeting the cash-first landscape of 2022. If you haven’t heard, it’s providing buyers with a direct solution when they lack the independent cash backing to make an all-cash offer.
The Solution: eCASH! A Partner-Guaranteed Good-as-Cash Offer
If the issue at hand is a lack of available funds, the answer is a partnership that gives up-front access to those funds for a reasonable fee. The eCash Home Financing Program is a way to provide your buyers with both the financial backing and confidence that will empower them to make a cash offer on their dream home.
This works by essentially eliminating tension in the buying process. Here’s what the process looks like.
Pre-Approval
AFR will work with you to solidify both a speedy mortgage qualification and approval process. This way the buyer knows exactly what their approval amount is and can proceed with confidence during their home search.
The Home Search
Knowing they now have the buying power of an all-cash offer, the buyer finds a home they love (that, most likely, another four to six buyers also love!) and prepares to make a competitive offer.
Speedy Approval and Valuation
Our program partner will ensure that the offer does not exceed the pre-approved credit limit and then approve it. At this point, they will perform a valuation report to ascertain the approximate value of the home and send you and the buyer a purchase contract addendum displaying the appropriate proof of funds, allowing the contract to move forward to closing.
Why the eCash Home Financing Program Works
Since the addendum contains a legal assurance that the seller will not be left out in the cold should the buyer fail to close due to any covered mortgage issue, there shouldn’t be any of the hiccups that you might expect with financing and appraisal value contingencies.
At its core, the eCash Home Financing Program offers a unique way for brokers to provide competitive value to clients in a seller’s market that demands speed, efficiency, and cash on hand. And that’s because stable buyers deserve support and the benefit of programs and professionals working for their best interests.
The eCash Home Financing Program is a singular and powerful resource to help your clients place competitive offers on homes and win bidding wars with confidence. Stay tuned as it begins its nationwide rollout, and feel free to contact AFR for more information at any time.
