What's Required to Make A Cash Offer in Real Estate
If you shopped for a home in 2020 or 2021 and felt like you were competing against a lot of cash offers, it wasn't your imagination. In 2020, a whopping 36% of home sales were paid in cash! What are the pros and cons of this approach? And how, exactly, do you make a cash offer in real estate? There are two ways a buyer can make a cash-only offer on a house. We're going to let you in on a little secret about how anyone who qualifies for a mortgage can also make an all-cash offer on their dream home. But first, let's start with the well-known way. Option 1: Have enough cash on-hand to pay for property outright Traditionally, the only way to make a cash offer on a house was to have cash in-hand. Those who could afford to do that in a high cost of living (HCOL) city fell into two camps. Individual buyers who had a lot of cash -- the exceptionally wealthy, those who inherited money or had a generous rich relative, or those who just sold their home and could roll the proceeds into a new home purchase. And then there are individual or corporate investors. Investors buy real estate in order to flip the property and turn a profit. Ever wonder about those signs on the side of the road that promise fast cash for your ugly house? Yeah, those are a subset of house flippers. Investors don't plan to live in the neighborhood and are motivated by making a big, and fast, profit. To bring sufficient cash to the table, these buyers may have their own investors backing the deal or group of deals. Or they may have cash from a recent sale or a cash-out refi from a previous investment property. Investors prefer the process of buying real estate with cash to be fast and streamlined: find a house that looks like it'll be profitable, make an offer (usually without a real estate agent), use a lawyer to finesse the contract, close the deal, wire the money to the seller, and start the flipping process. Let's put aside investors and their financing strategies and focus on the regular people who are trying to buy a home to live in and enjoy. Even if you can pay for a new home with cash upfront, should you? The disadvantage of paying cash for real estate is losing liquidity or tying up money that could be more productively invested. Today’s low-interest-rate environment means financing a home purchase is still a financially sound strategy. On the other hand, if you go the route of a traditional mortgage, you lose the bargaining power of a cash offer. After all, sellers prefer cash buyers because they aren't subject to the bank's financing and appraisal contingencies (and all the other reasons a traditional loan can fall through or drag out). Sounds like a dilemma. But there's a second option that solves this problem for those who have the cash but prefer the flexibility of a longer term home loan … an option that also gives a leg up to those who can't put 100% down but who qualify for a mortgage. Option 2: Work with Accept.inc to buy with the power of cash How We Enable You to Make Cash Offers The good news for everyday individuals and families who dream of buying a home is that it's possible for regular people to make a cash offer, just like investors and the wealthy. The secret lies in partnering with Accept.inc. As a “technology-enabled lender,” we're making it easy and fast for homebuyers to submit all-cash offers, for no additional fees. The process for becoming a cash buyer with Accept.inc is similar to the mortgage process you already know and don't love ... but without the slow, cumbersome, and painful parts that cause you heartburn. Here's how it works: First, we start by letting you know how much you pre-qualify for so you can start looking for your dream house right away; simultaneously, we begin the Cash Approval process. If you qualify, you'll get Cash Approved in days, not weeks or months. Cash Approval is not the simple prequalification you'll get with traditional lenders, which can fall apart during the end of the offer process; once you're approved, you can start making cash offers with confidence that your financing won't fall through! Once you find a house you want to buy, we run a quick value check on the home. Then your agent works with our cash transaction specialist to finalize the offer letter. The seller is offered cash for their home and shown proof of funds. Why You Should Consider Making a Cash Offer In today's real estate market, a cash offer is four times more likely to win than an offer with a traditional mortgage. Even better, the power of cash is so great that you are in a better position to negotiate price and terms. How much negotiating power? Would you believe Accept.inc buyers get an average discount of $11,545 off the highest offer in a bidding war? It's true -- that means their cash offer won by offering nearly twelve thousand dollars less than the highest bid! And in a non-competitive situation of 2 or fewer offers, our cash buyers saved even more -- they paid an average of $15,979 below list price on their home purchase in Denver. That's more money back in your pocket or more equity on your net worth balance sheet from day one. And who would say no to that? Once the deal is done, you begin paying back the loan just like a regular mortgage. It's fast and convenient. And it costs you nothing extra. All the pros of making a cash offer in real estate. None of the cons. Because it turns out that having cash isn't a key requirement for being a cash buyer. Pretty cool, don't you agree? Learn more about the benefits of buying a house with cash. And when you're ready to take the next step, apply to become Cash Approved™.
Stella W | Nov 23, 2021
How to Find the Best Mortgage Lender in Denver
You’ve scoured the internet, bookmarked layouts in Architectural Digest, binged every Denver-based episode of House Hunters, and crafted a wish list of features for your future home. But, what about your wish list for finding the right Denver mortgage company to make that dream a reality? Buying a house is probably one of the biggest financial investments you’ll make in life. And having the right lender in your corner is an essential piece of the homebuying process. Don't settle for anything less than a great experience. Finding the best mortgage lender is more than just securing the lowest interest rate possible. Here’s a look at how the right mortgage company can help you win in the Denver housing market. What to look for in a Denver mortgage lender While the mortgage process may appear to be similar across lenders, not all mortgage companies are the same. Key differences include fees, the level of customer service you'll receive, how quickly the underwriting process can get done, and whether the lender can help you make the most competitive offer possible -- all these points make it worth your time to do your research. What you should expect from a mortgage lender: Great mortgage rates Flexible mortgage optionsNo hidden fees or "gotchas"Easy to work withFast underwriting process So how do you choose a lender? From conventional banks and credit unions to mortgage brokers and nonbank mortgage lenders, there are many options on the market today to consider. Long gone are the days when your only option was the local bank down the street. And while you shop around, remember that a competitive interest rate is a given but not your only consideration. For instance, it’s important to choose a lender that is reputable, responsive, exercises transparency, and offers top-notch customer service — a lender that drags their feet and prevents you from closing quickly can cause you to lose out on your Denver dream home. Like your real estate agent, your mortgage lender should be like a partner in the process. Buying a house in Denver should be a joyful experience; make sure your lender will set you up for success. Discover an innovative new mortgage process According to the Wall Street Journal, 68.1% of all U.S. mortgages issued in 2020 came from nonbank mortgage lenders, up from 58.9% in 2019. Homebuyers are getting wise to the fact that they don't need to rely on old-fashioned, traditional banks to help them buy their dream home. Yet, most would-be homeowners are not aware that there are alternatives to old-fashioned, traditional home loans, also. They don't realize that buying a house doesn't need to follow the same traditional (and slow) process their parents used when they bought a home -- a process that, frankly, doesn't work well for buyers or sellers. So what's the alternative? Accept.inc has turned the mortgage process on its head with an innovative loan product that allows buyers to make strong cash-only offers, with unmatched speed-to-closing and no delays due to financing and appraisal contingencies. Accept.inc is the first and only iLender, or a “technology-enabled lender”, which has facilitated hundreds of millions of dollars in real estate purchases between ordinary homebuyers and sellers in Denver to date. Waiting to see if your lender will give your loan the green light of approval after your offer has been accepted? Nerve racking. Having the rug pulled out from under your feet and your dream home ripped away at the last moment all because of a financing contingency? Heartbreaking and, frankly, unnecessary. Seriously, it’s the 21st century, there has to be a better way. And there is. At Accept.inc, we’ve flipped the script, performing the underwriting process upfront. This allows qualified buyers to become Cash Approved™ before they ever make an offer on a home. So, what exactly does that mean? As a buyer, you have proof of funds when you make your offer. Congrats, you're now negotiating with the power of cash. See how the right lender makes all the difference Lose. Rinse. Repeat. That doesn’t exactly sound like a formula for success to us. By working with the right Denver mortgage lender, you can hop off the merry-go-round of failed offers and improve your chances of scoring a win. Picking a proven mortgage lender who gets deals done and who comes recommended by trusted real estate agents can protect you from falling victim to bait-and-switch ads or brokers who forward your information to anyone and everyone willing to buy leads. You’re not just buying a product, you’re looking for a partner who will work alongside you to get the deal done. In today's housing market, you want to pick a lender that’s innovative, providing a creative and strategic solution that moves beyond the traditional mortgage process. Because let’s face it, the traditional mortgage process is stressful for both buyers and sellers. Historically, making an all-cash offer meant a homebuyer didn’t need to secure a mortgage. This was once reserved solely for investors, developers, and the rare one-percenters who had the capital needed to purchase a home outright. Today, however, we’ve leveled the playing field, providing everyday homebuyers with the proof of funds needed to make a cash offer. Accept.inc's Cash Approval process can be incredibly powerful, increasing your chances of making a winner offer by 4X. Why? Because the sale no longer depends upon your ability to successfully procure financing after a seller has already accepted your bid. The financing process is straightforward, with no strings attached and no hidden fees. In fact, there are no additional fees for an Accept.inc cash offer beyond the customary fees of any traditional mortgage. Let's recap. Great mortgage rates? Check. Accept.inc’s mortgage rates are very competitive. Flexible mortgage options? Absolutely. We offer a variety of financing options. No hidden fees? Guaranteed. Our cash offer service costs the same as a traditional mortgage. We don't add any additional fees or points when compared to a traditional mortgage offer. Easy to work with? You bet. We pair our approved buyers with an Approval Specialist, so that they have someone to personally walk them through the process. We also have a Cash Transaction Specialist who works closely with the buyer's agent to submit the offer. Check out some of our buyer reviews and agent testimonials for more proof. Helps you make the best offer? Here's another area where Accept.inc really shines! Because we give you the ability to make a cash offer, you're more likely to win in a bidding war, as well as negotiate the best deal. Sellers know that cash offers close faster, with no risk of offers falling through due to financing contingencies. Making a strong offer in the competitive Denver housing market Year over year, the Mile-High City is named one of the U.S. News & World Report's best places to live. From the area’s thriving economy to its vibrant culture, great school districts and a slew of outdoor activities, it’s no surprise the population has seen an estimated 21.2% increase in the last 10 years. It’s no secret either that the Denver housing market is competitive. Even as the hot market begins to cool, like any other metro area, it still comes with a higher-than-average cost of living. And while the median household income in Colorado is above the national average, any type of cost savings a homebuyer can secure is incredibly valuable. Especially when having to contend with multi-offer scenarios. When you're making a cash offer on a house with an Accept.inc mortgage, you have more negotiating power. Just like the lowest mortgage rate isn't the only consideration for buyers when choosing a loan (though of course Accept.inc has highly competitive rates with no additional fees), neither do house sellers only care about the highest offer. Because all-cash offers are attractive to sellers due to their certainty and speed, buyers with cash in hand have morhe negotiating power over those with traditional financing. Whether that means you can make a lower offer or you ask for extra concessions, the power of cash is undeniable in both a seller's and a buyer's market. Are you ready for your next Denver house offer to win? Get started by becoming Cash Approved™ today.
Kelly K. | Nov 22, 2021
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