Real Estate Tips & Resources
How to Make a Cash Offer with a Mortgage in Denver
Did you know all-cash offers in real estate accounted for 36% of home sales in 2020? You might be thinking: How do so many homebuyers have enough cash laying around to buy an entire house in an expensive city like Denver? Or, how will I ever compete against all those institutional investors scooping up all the available houses on the market? There's good news. There's a way for you to buy a house with cash, even if you don't have the full amount of cash ready and waiting in your checking account. The secret lies in partnering with Accept.inc. We’re here to level the playing field for everyday buyers like you, by making it possible to buy a house with cash but pay for it over time with a mortgage. If paying for a house with cash, while also being able to pay it back with a mortgage, sounds complicated or risky, we're here to assure you it's not. The process for becoming a cash buyer is straightforward -- we promise. Step 1. Get Cash Approved™ It begins with you completing our Cash Approval™ form letting us know you're interested in buying a house with cash in Denver. We'll work with you to start your loan application and discuss your loan options with you. Then we begin the full underwriting process. This is entirely different from other lenders' so-called "preapproval", which just kicks the actual underwriting process down the road for you to deal with later. The Accept.inc Cash Offer approval may take slightly longer than a traditional lender’s 30-minute pre-qualification, but once you are Cash Approved, you can immediately go out and compete with other cash offers! What this step entails You complete our online Cash Approval application. You learn about the loan options and our competitive rates.We guide you in gathering the necessary documents for our underwriting process -- the same documents you'd need for traditional underwriting. What takes traditional mortgage lenders an average of 58 days to process, can be performed in as little as 72 hours with Accept.inc. During this step, we work with you to determine the earnest money and down payment amount you will use in your cash offer. Step 2. Find the home you want to buy Next, you and your real estate agent will begin the fun part of buying your dream house in Denver or the surrounding areas -- looking at houses you want to buy! Your agent can guide you through all the tough decisions about what's on your must-have and nice-to-have lists, whether it's neighborhoods, features, or total house budget. You are not restricted in which real estate agent you work with or which properties you can look at. Hit the open houses with the confidence that your Accept.inc Cash Offer lets you negotiate and craft a bid as compelling as any other cash offer. When you find the house you want, your agent will send the property details to Accept.inc to conduct a value check process. We do the value check at this stage, so you can skip the appraisal contingency in your offer. Another benefit to a cash offer! What this step entails You and your agent find the home you want to purchaseYour agent works with Accept.inc to get approval on the offer amountWe work together to determine the earnest money deposit and down payment amountsYour all-cash offer is submitted to the seller with Accept.inc's proof of funds. Don't forget: because you're making a cash offer, there's no financing contingency either! Your underwriting was already completed during Step 1. Step 3. Win the home An all-cash offer can improve your chances of making the winning offer by 4X. Once a seller approves your bid, we will work with you and your agent to finalize the purchase. What this step entails Once a seller accepts your all-cash offer, the house is purchased using Accept.inc’s cash. This allows us to reserve the home for you until your mortgage is ready to close. From here, you can schedule an inspection on the home. The seller’s contract with Accept.inc is contingent on your satisfaction with the inspection report. As with a regular real estate transaction, you and your agent have complete control over negotiations during the inspection period. We will only purchase the home if you’re satisfied with its condition or you’ve negotiated with the seller and reached a resolution.After Accept.inc purchases the home, it will be sold back to you with a mortgage for the exact same purchase price without any hidden fees or markups. Step 4. Close and take possession As soon as the mortgage is ready to close, you take title and move into the home! Once your real estate agent hands over the keys, it’s time to celebrate! Ready to make a cash offer? Take the first step. It's a myth that the only people having success in the Denver real estate market in the past year were either on the selling side of the transaction, a deep-pocketed investor getting creative with financing options that a normal person doesn't have access to, or someone who happened to have a lot of cash sitting around from their own recent home sale. You, too, can make your next home offer an all-cash offer … and pay it back like a traditional home loan. All the advantages of paying with cash, without needing all that cash on hand! To recap, here is how to make an all-cash offer with a mortgage: Start the Accept.inc Cash Approval processFind the home you want to buyMake your Accept.inc-backed cash offerAccept.inc buys the home on your behalf with cash and then sells it back to you at no additional costClose and move in! Ready to get started and become Colorado's latest proud homeowner? Get Cash Approved today.
Kelly K. | Sep 17, 2021
Buying a House with Cash: A Guide
In the last few years, we've seen already hot real estate markets such as Denver, the California Bay Area, Seattle and others become even more competitive. Not only are homes selling just days after being listed and for way over asking price, but increasingly the winning bids are also "cash offers." What exactly is a cash offer and what does this trend mean for buyers and sellers? In this article, we explain the most important things to understand about why and how to buy a house with cash, why sellers prefer these deals, how all-cash offers work, and other frequently asked questions. What you'll learn: What is a cash offer?How common are all-cash offers in real estate?But wait, how do cash offers work?What are the benefits of buying a house with cash?Do you need a real estate agent to make a cash offer?Are cash offers necessary in 2021? What is a cash offer? Traditionally, a cash offer in real estate was one where the homebuyer didn't require a mortgage. Today, a cash offer can be made by a purchaser who has "proof of funds" for the full value of the offer, which means that the offer doesn't depend on them successfully arranging financing after the deal is accepted. That's a subtle, but powerful, distinction. Many homebuyers hear the term “cash offer” and instantly picture someone incredibly wealthy carrying a briefcase stuffed with neatly bundled hundred-dollar bills. These days, the most common image of a cash buyer is a faceless corporate developer or an investor who intends to make a low bid, flip for a hefty profit, and get out … rinse and repeat. These are not families or individuals who intend to live in the house they buy and be part of the community. And while there are individuals and institutions out there who have the liquidity to buy a house with cash (minus the 007-style briefcase) -- and many of these buyers are investors and developers -- making an all-cash offer on a house is a strategy that is increasingly accessible to everyday people. This is thanks to a new kind of lender who is turning the traditional (read: old-fashioned) mortgage lending industry on its head. Making a cash offer on a home only requires that you have cash on hand; and an iLender like Accept.inc will provide proof of funds so you can bid with the power of cash. Keep reading to learn how it works and why cash can be the factor that makes or breaks your deal. How common are all-cash offers in real estate? Many people tend to assume that all-cash home purchases are rare. However, they represent a surprising proportion of property sales – accounting for 36% of home sales according to CNBC. Others assume that the only people able to make a cash offer on a house are only either extremely wealthy investors or those companies that put out the "We buy houses" signs on the side of the road, whose sole intent is to buy a house for under market rate and flip it. But increasingly, cash buyers are regular home buyers looking for a leg up in a tight sellers market. But wait, how do cash offers work? Cash offers are simply offers that don't have an appraisal or a financing contingency, because the buyer already has 100% of the funds available, ready to use on the purchase of the house. That's it. Everything else about the process is straightforward, with no strange surprises or strings attached. So how do everyday buyers afford to make a cash offer on a house in an expensive market like Denver, San Francisco, or Washington DC if they aren't sitting on a giant inheritance? The alternative to traditional financing is to work with an iLender like Colorado-based Accept.inc. We flip the script by doing the underwriting process up front – not after the offer is made and accepted. Accept.inc buyers are Cash ApprovedTM before they make an offer. This is not a pre-qualification or pre-approval -- Cash Approved means the money is already in the bank, guaranteed. (Once the sale on the house closes, the buyer will then begin to pay back the loan, just as they would have with a traditional mortgage.) Providing proof of funds upfront is a highly attractive prospect for sellers. The reason? If a potential buyer is unable to secure lender financing – or a mortgage matching the amount they pre-qualified for – the deal is likely to fall through and the seller would be forced to relist their home. An all-cash offer is a win-win-win scenario for everyone involved -- buyers, sellers and real estate agents. What are the benefits of buying a house with cash? If you're a buyer, the traditional mortgage process is stressful! It's no picnic for homeowners on the other side of the transaction either. Waiting for the lender to approve the loan AFTER the offer has been submitted and accepted, only for the deal to fall apart because of a financing contingency feels completely backwards. Here are the main reasons why cash offers are better: Cash offers speed up the closing timeline Neither buyers nor sellers want to endure a lengthy, drawn-out closing process. Whether a seller is relocating to accommodate their growing family, an employment opportunity or simply taking the next step in their homeowner journey, they want the same thing: a smooth and speedy sale. According to Ellie Mae, after an offer is accepted, it takes approximately 47 days for the sale to close. It takes this long to close in part due to the lengthy underwriting process involved in getting a loan through a traditional mortgage lender. An all-cash offer, on the other hand, offers a fast turnaround time, taking an average of 14 days to close. Cash offers are less likely to fall through Cash offers are less likely to fall through. "Issues related to obtaining financing” continuously tops NAR’s Realtors® Confidence Index report as the leading cause of delays or terminations of a potential home sale. So, naturally, sellers want to engage with buyers who provide certainty and the least amount of risk possible. Buyers who go the traditional mortgage route attach a pre-approval letter to their offer as “assurance” that the deal will close. But don't be fooled. While traditional pre-approvals can be obtained quickly, they don’t provide much in the way of certainty because the lender can still draw out the approval process when they take a deeper look into the borrower's finances or deny the loan outright. There's no such risk with a cash offer. And Accept.inc offers won't fall through because of an appraisal contingency either. That's because there is no appraisal required after the offer is made. The Accept.inc process includes a value-check before the offer is made, so both sellers and buyers can rest easy knowing the sale is already approved for the amount of the offer. Just to be crystal clear: an Accept.inc-backed cash offer has no appraisal contingency and no financing contingency. Period. Cash offers can save you money Because of the reasons listed above, sellers find all-cash bids more attractive. In fact, in a bidding war, a cash offer might beat a higher offer with traditional financing. If you're the buyer, that means you benefit from a hidden cash discount. In 2021, the average home price in the United States has reached a new all-time high of over $400,0000, according to Statistia. According to the Denver Post, in the summer of 2021 the median home price in Denver reached a record $600,00, up 25% over 2020. Even if the market begins to cool, buying a home in a market like Denver is going to continue to be a big-ticket purchase for the foreseeable future. Even a small percentage point discount on such a large purchase -- when it comes at no additional cost to you -- is free money, or instant equity, back in your pocket. “Even if you have the strongest financed offer out there, there is just something about cash that almost always entices the seller”-Madison Kissel, Compass Do you need a real estate agent to make a cash offer? While you don’t technically need a real estate agent when buying a house, we don’t recommend doing it without one. Regardless of whether you're buying with cash or using a traditional home loan, a professional real estate agent brings important knowledge to the table. Agents have the market intelligence and local insights needed to help buyers understand everything from various neighborhoods and school districts to what it takes to write a winning offer. An agent’s expertise is priceless – especially when it comes to crafting a competitive offer or handling negotiations with a seller. With a purchase worth potentially hundreds of thousands of dollars (or more!), the risk of trying to go it alone won't be worth it. The great news is that you're in charge. Accept.inc is a lender, not a brokerage, which means we work with you and whichever real estate agent you choose -- this gives you and your agent the flexibility you need to make the best decisions for you. Are cash offers necessary in 2021? According to CNN, “In this wild housing market, with 21% fewer homes on the market than last year and demand pushing prices to record highs, the competition for a home is fierce. One thing that can put a potential buyer on the top of the heap is an all-cash offer.” When given the opportunity to choose between an offer with financing contingencies that could drag on for potentially two months and an all-cash offer, which can close in about 2 weeks, the seller and their agent will be hard pressed to choose the slower and riskier option. Cash is powerful -- whether that's to gain an edge against competing buyers or to create a more favorable position for negotiating on price or terms. Making a cash offer can increase your chances of making a winning offer by 4X or help you negotiate a lower sale price. If you want to increase the odds of winning your next offer, at a price that works for you, we think making a cash offer on your next house is the right strategy. "We won the home even though there were multiple offers that were much higher! The seller liked ours the best because of the cash, knowing that we could close faster. My buyers were thrilled after waiting on so many other homes, they had told me they thought they were never going to be able to get a house!-Clark Hutt, HomeSmart Our philosophy at Accept.inc is simple: if you can qualify for a mortgage, then you deserve the same opportunity to make a strong offer through the power of cash. To be clear, there are no extra costs involved and you pay off your Accept.inc loan over time, just like a regular home lome. Our mission is to enable a cash offer on every home. Now that you know how a cash offer works, start the process to get Cash Approved today or learn more about the benefits to sellers.
Kelly K. | Aug 27, 2021
What is the difference between a preapproval and a cash approval?
In today’s blog, we speak with Accept.inc’s Approval Strategy Manager and mortgage expert, Ben Maez to find out what the difference is between a traditional mortgage pre-approval and an Accept.inc cash approval. Let’s look at the different levels of approval in a traditional mortgage process and how that compares with Accept.inc’s cash approval process. Traditional financing step 1: Prequalification What does a traditional mortgage prequalification look like? The first step is simple: discuss your financial information with a loan officer. A prequalification means you as a homebuyer have discussed your finances with a loan officer who has determined based on a quick phone call (approximately 15 minutes) and other factors such as your job history, cash in the bank and amount of financial reserves, that you are likely to qualify for a mortgage to purchase a home. Basically, the loan officer is making an educated guess based on a short series of general questions that you will qualify for a mortgage. How long does a prequalification take to complete? A prequalification can happen the same day. When does a prequalification happen? At the very beginning of your loan application; it is the first step to securing a traditional mortgage. Who influences how fast a prequalification takes? The buyer or the loan officer? A prequalification moves as fast as a loan officer’s speed in setting up a call. As the buyer, you need to be available for the call and ready to provide accurate information. Traditional financing step 2: Preapproval What does a traditional mortgage preapproval look like? The second step is to get preapproved. A preapproval means that a loan officer has received, reviewed, and discussed the following information with you: A copy of your credit report to review your credit score and history Proof of income Proof of assets to verify you have the money set aside for items such as down payment and closing costs If you submit the requested documentation immediately, a preapproval from a loan officer can happen as fast as the same day. By reviewing your income documents and paystubs, a loan officer can get a sense of how stable or consistent your income has been. This also indicates whether you are likely to earn a stable income in the future. Your bank statement and other financial accounts confirm your ability to put enough money towards a down payment and closing costs. Because the loan officer is reviewing these documents, a preapproval is a stronger level of approval than a prequalification. How long does a preapproval take to complete? A preapproval can take as little as 24 hours from the time requested documents are received. When does a preapproval happen? After you have completed your prequalification and provided preliminary financial documents. Who influences how quickly a preapproval can be issued? The buyer or the loan officer? The buyer and the loan officer. As a buyer, the faster you submit all your financial documents, the faster the loan officer can start reviewing. After that, it’s down to how fast the loan officer reviews your documents and lets you know if there are any additional documents they need to complete the file package that will be sent to the underwriter for review. Traditional financing step 3: Underwriting What is mortgage underwriting and when does it happen in the transaction for a traditional mortgage? The final stage in traditional financing is getting underwriter approval. After you go house hunting with either a prequalification or preapproval letter and you have won an offer on a home, you will be ready to move into mortgage underwriting. In this stage, an underwriter thoroughly evaluates the financial documents in your file that a loan officer used to pre-approve you, verifying that all information is current and accurate. When the underwriter reviews your file, they might request additional documents or verification of items. It’s important to note that a mortgage underwriter is the ultimate authority in evaluating credit worthiness. After they give their thumbs up, the underwriter can move you on to closing. How long does underwriting take to complete? Most lenders will tell you that from the time you turn in your documents, you can expect the underwriting portion will take 3-7 days to complete. After the initial underwriting review, there will often come a request from the underwriter for additional documents needed from you to satisfy loan conditions. When they request additional documents, this will extend your timeline for getting underwritten approval. When does underwriting for a traditional mortgage happen? Traditional mortgage lenders send your file to underwriting only after you have won an offer on a home and gone under contract. This means you must first apply for the loan, submit all financial documents, win an offer on a home, complete an inspection, resolve any additional negotiations with the seller and satisfy any other contingencies before your file is considered complete. According to Ice Mortgage Technology’s Origination Insight report, traditional lenders currently need an average of fifty-one days from the time you begin your loan application to the time you close on the home. Who influences how fast a file is sent to underwriting with a traditional lender? The lender decides when your file is ready to be shared with underwriting. Cash approval What does a cash approval look like? An Accept.inc cash approval is simply one step: full upfront underwriting. What can take traditional mortgage lenders 48 + days to process, Accept.inc can process in 72 hours. With an Accept.inc cash approval, the mortgage underwriting stage is completed upfront before you go shopping to minimize surprises at the end of the transaction. Sellers hate last-minute surprises after they have gone under contract with a buyer. A full upfront underwrite means that you are able to shop with the power of cash, backed by a loan you have already been fully approved for. Accept.inc’s cash approval process is designed to accelerate your approval timeline. As you begin the cash approval process you should expect to take a thorough deep dive into your finances immediately, the first day you apply. You should plan on a series of conversations with your approval specialist to assess what specific documents are needed to verify all income, assets and debt. How long does cash approval take? Cash approval can happen in as little as 72 hours. When does cash approval happen? Cash approval starts as soon as you decide to apply and finishes after all financial documents requested by the approval specialist have been sent to underwriting and your file has been underwritten. At this stage you will know the home purchase value you are approved for. If you want to submit offers on homes with a cash approval letter you should apply before you start shopping for homes. What is the most important part of the cash approval process? The most important piece to getting cash approved is also the most cumbersome part for you as a buyer: collecting documents for your loan application so it is ready for the underwriter to approve. Your approval specialist will guide you step-by- step, document-by-document through what is needed for your specific financial situation. With both traditional financing and cash approval, you should expect several rounds of requests for documents that verify your finances. Yes, that’s right: several rounds. The first round will be a general submission of standard documents. Additional rounds that follow will be more custom-tailored to the specific items in your finances that the lender has identified. Because each loan applicant is unique, there is no set standard to how many rounds of documents you will need to submit. Remember: submitting multiple rounds of documents can happen when working with a traditional lender or Accept.inc. It’s important to note that some buyers with more complex financials, such as those who are self-employed or who have multiple streams of income or many assets such as multiple properties should be prepared to submit more documentation. With traditional financing, lenders will give you weeks to submit your complete documentation. But cash approval is different. Accept.inc’s mortgage team is prepared to move as fast as our buyers can submit their documents. This is also where many buyers may lag in their response time. What is considered too long of a response time? Well, that depends on how fast you want to win a home. In today’s hypercompetitive market, many buyers face the challenge of homes selling within days of coming on the market. If you wait to finish your cash approval until you find a home you like, you risk missing the window for submitting an offer that is backed by cash. Who influences how fast cash approval takes? The buyer. Why? Because Accept.inc’s cash approval process is designed to empower buyers to fastrack their file through the same vetting process a traditional loan takes -but, in a fraction of the time. Traditional loan preapproval or cash approval: which one is for you? Getting approved for a home loan requires you to commit to a process and timeline whether you work with a traditional lender to get preapproved or Accept.inc to get cash approved. With cash approval you get more than just underwritten approval, you get all-cash buying power which is 4x more likely to win an offer for a home. Preapprovals tell you that you can “probably” qualify for a mortgage to buy this house- but cash approval gives you and the seller 100% certainty that the cash will be ready on closing day. To start the cash approval process with Accept.inc, just fill out this quick form.
Jennifer Shapiro | Aug 21, 2021
How to successfully compete with an all-cash offer on a home
As a homebuyer in today’s hot real estate market, you’re facing some fierce competition. So, we don’t blame you for feeling a tad overwhelmed – or even discouraged – especially if you’ve lost a number of bids to all-cash buyers. Wondering how you could possibly compete with an all-cash offer? The answer is simple: the secret to beating a cash offer and walking away with the keys to your dream home is to make a cash offer yourself. You don’t need to have a net worth that rivals Jeff Bezos or Jonathan and Drew Scott from HGTV’s Property Brothers to be able to make a cash offer on a house. Here’s how everyday buyers are doing it, too. Compete with an all-cash offer by making one yourself We know what you’re thinking: How can you compete with an all-cash offer if you don’t actually have the cash to do so? Accept.inc is an iLender who makes it possible for regular people who qualify for a mortgage to make an all-cash offer even if they don't have hundreds of thousands of dollars lying around. You can secure the funds by getting Cash Approved™ – which will provide you with the upfront liquidity needed to make an all-cash offer, backed by an Accept.inc mortgage. You’ll reap all the same benefits of a cash offer – like a competitive edge and a speedier close – but without the need for upfront liquidity. Traditional mortgage lenders don’t initiate the underwriting process until a home is officially under contract. Through Accept.inc’s Cash-Approval process, however, underwriting is performed upfront. That means you’ll be fully mortgage-approved (really approved, not "pre-approved"!) before ever submitting an offer on a home AND you’ll have the strength of cash in your back pocket. Similar to how a 0% credit card works, we front the funds for approved borrowers to make their own all-cash offer with no additional costs or hidden fees. This allows you and your real estate agent to shop the housing market and negotiate with sellers using the power of cash. And when the deal is done, you pay back the borrowed funds over time just like you would with a traditional mortgage. Have a knowledgeable real estate agent by your side A licensed real estate professional serves as an advocate for your interests – working on your behalf to find you a dream home that fits both your budget and needs. They’ll have invaluable knowledge about the local market, providing insights on neighborhoods and school districts while helping you understand any paperwork or confusing jargon that may sound like a foreign language to you. What’s more, you can lean on an agent’s expertise to write a competitive bid and negotiate with the seller. Real estate agents understand what truly matters to today’s sellers. By understanding what motivates the seller, you can draft up an offer that caters to their specific needs. For example, maybe they’re looking for a quick and seamless transaction. Or, maybe they prefer to deal with as few contingencies as possible. Know your numbers, so you can move fast The perfect home has caught your eye -- it's everything you want and need. But before you break out the champagne, there's still a lot that needs to happen before you can win the bid. You don't want to lose out on the perfect home because you were too slow to present your offer. In a hyper-competitive market, that means you have to know what you plan to offer as soon as possible, which means you've already done all your homework ahead of time. Factors to consider: What's your budget? And how much do you need to bid to win? In terms of affordability, a good rule of thumb is the 30% rule, which says you should spend 30% (or less) of your gross monthly income on house-related costs. But savvy home buyers know it’s important to crunch the numbers to know specifically how much your monthly costs will be and how that fits into your larger budget. (Here are some pro tips for calculating your total monthly housing costs.) If you've been working closely with a real estate agent, you should already have a sense of whether homes in your market are selling below, at, or above listing price in your desired neighborhood. So work with your agent to come up with a good number, put in your offer quickly, and be sure to let the seller know you have cash on hand! Get cash approved ahead of time While traditional pre-approvals are quick to obtain, they don’t provide much certainty because the lender can still decide to deny the loan later in the process. To give the home seller true confidence that your offer won't fall through due to financing issues, you’ll need to get fully underwritten upfront. That's what getting a mortgage through Accept.inc does. Taking the financing contingency out of the equation is one of the biggest differences between a Cash Approved™ buyer and one who is simply pre-approved. Crafting a winning offer and boosting your confidence while house hunting ultimately boils down to being able to make the best offer, not necessarily the highest offer. Gain a competitive advantage in this seller's market by having full proof of funds in the bank and being able to move quickly, just like those other all-cash buyers who have been snapping up homes from under everyone's noses. Get Cash Approved today and improve your chances of scoring your dream home by 4X.
Kelly K. | Aug 4, 2021