It’s a competitive world out there in the real estate market. Many buyers encounter bidding wars, and have been beaten by all-cash offers. How do you win in this kind of market? Simple: Make an all-cash offer.
According to industry data, cash buyers are 97 percent more likely to win in a multiple-offer situation, and often win with offers up to 5 percent less than buyers who must use a mortgage.
You don’t have enough cash to make an all-cash offer you say? Well, maybe this new startup can help.
BoardRE is a new mortgage company that enables borrowers to make all-cash offers with a very simple concept:
First, you must be pre-approved for a mortgage to determine what you can afford. Second, when you find a home you want, Board will make an all-cash offer for the home. (You and your real estate agent have control over the negotiations.) Finally, Board will sell you the home at the same price it paid, and finance the purchase by providing your mortgage.
How does Board do this? The company is backed by several venture capital funds that seek to capitalize on solving the most vexing problems in real estate today. One of the biggest complaints, of course, is the difficulty in making a successful offer in today’s very competitive market. Board’s very simple offer addresses that nicely.
Board is a Mortgage Company First
While Board’s offer is aimed at helping you buy a home, it is not a real estate company; it is a mortgage lender. According to Nick Friedman, a founder and the COO of Board, the company is a direct lender and can accommodate most credit profiles and loan types. Moreover, since you must be pre-approved before you can take advantage of its offer, you can be sure that you will get the home.
Real Estate Agents Find Value in Board’s Offer
Buyers may feel pressure to work with mortgage lenders that their real estate agents know and trust to close on time. You avoid this awkward scenario as BoardRE becomes your source for the mortgage.
Adam Pollack, Board’s CEO, points out that not only will the all-cash offer make it more likely that your offer will be accepted and that you are likely to pay a little less for your home, but also that you will close the first leg of the transaction more quickly – in as little as two weeks. This makes real estate agents very happy, and helps overcome any objections they may have about working with buyers’ own mortgage providers.
The All-Cash Offer Fine Print
Board doesn’t make its money unless you follow through with the purchase and the mortgage. In exchange for the mortgage from Board, you agree to buy the home at the price you negotiated and you agree to take the mortgage at the fees and rate in effect on the day Board enters into contract with the seller.
The Price You Pay Will Be a Fair Price
As a home buyer you may not know whether you are overpaying for the home, getting a deal or paying a fair price. You must count on your real estate agent (and your own instincts) to guide you. How can you be protected?
Board will run an automated analysis of the value of the home (the Zillow Zestimate is a good example of an automated valuation analysis) before it makes the all-cash offer. This ensures that the offer is fair, and to be sure that when you apply for the mortgage the appraisal will support the purchase price. If the lender’s appraiser doesn’t appraise your home for the purchase price, Board will cover the difference between the appraised value and the purchase price. In other words, Board takes on the risk of overpaying for the home!
Coming … Eventually ... to an Area Near You
As of now, Board is located in Denver and operates only in Colorado. The company has plans to eventually expand into other competitive markets, but, according to Mr. Pollack, will only do so when it is confident that it is delivering excellent customer service.
Coming soon to your area – you are a cash buyer!