14 Apr The Bibel Team: CASH BUYING
Eric Bibel with the Bibel team at NEO Home Loans. And today I am joined with–
Brad: I’m Brad Soll with the Bibel team here at NEO Home Loans.
Eric: And we want to have a conversation around cash buying options in market.
Brad: Right. So tell me. I mean, Eric, talk to me about cash buying options or, you know, the clients that we have that are fearful that they won’t have a home or somewhere to go when they’re buying a new property and they need to sell their current one. I mean, there’s a lot of fears around that, or some confusion. Do we have anything that can help?
Eric: Absolutely. And I think you’ve touched on a number of good points there, Brad. Right now with our market being such a seller focused market, and with there being such a suppression of inventory and high demand, there’s a lot of folks that have something to sell in order to buy something new. But you know, of the things that I just mentioned, it being such a seller favored market, the opportunity and ability to have a contingent offer, meaning needing to sell something before buying accepted is very, very low. So, it’s kind of double fold, the problem that we’re facing right now. Suppressed inventory and not able to be able to purchase with that.
Brad: Right. So, I mean, you know, they want to buy. People want to buy homes, but they are scared to leave the current one. Where are they going to go and they need those funds to purchase their new homes. So what do they do?
Eric: Absolutely. And that, like I said, is a very valid fear. Fortunately we have a solution that addresses that fear on two fronts. One, it allows the buyer to stay in their existing home prior to purchasing the new property, meaning they do not need to sell their departing residence in order to buy the new property. And more importantly, the replacement home they can buy with all cash
Brad: Do tell!
Eric: So it’s kind of a mind blowing concept. It’s really a pretty simple approach. We’ve partnered, NEO and the Bibel team, with a company called Revive, which allows buyers to do just that. Purchase a property, all cash, move into the new home, and then sell their property and take advantage of the seller’s market and then sell for top dollar.
Brad: Amazing. Amazing. So essentially they are, Revive is providing funds for you prior to your upcoming purchase. And therefore they can be as competitive as a cash buyer.
Eric: Exactly. And on that point, I mean, the competitiveness of a cash buyer, Redfin, who everybody knows Redfin, it’s basically the rival to Zillow.
Eric: Exactly. But Redfin recently conducted a survey and a study around the strength of offers, and their findings concluded that the likelihood of a cash offer being accepted over a financed offer is 270% greater.
Eric: So really, you know, looking at how competitive this market is right now, and you layer in the contingency element, well, that person’s going to get blown out, that perspective buyer, by a cash offer. Why don’t we make that buyer a cash buyer, right?
Brad: And Eric, do you know roughly how many cash offers are being made amongst the finance offers on, on average?
Eric: On average, I mean, right now, I think each market’s going to be different. Each price point’s going to be different, but here, specifically in the San Diego market, it’s not uncommon to see, out of 20, 30 offers, more than a third are being positioned as all cash.
Brad: Which, I mean, that’s a big number.
Eric: It’s a huge number.
Brad: You know, it just adds to the competition of all of everyone else that’s being financed the conventional way.
Eric: Exactly. So with that, I mean, that really brings us to the option that we’re able to provide and solution that we’re able to provide our clients, which is around this revive feature, which again makes the client an all cash buyer. So essentially how it works. We get introduced to the client, determine the need. Yes, they have a property they need to sell. That’s where a majority of the down payment sits. However, they need to move up, purchase a new property for X, Y, Z reason. So what we do is we go through our standard analysis, complete a traditional approval process as if they’re buying with the sale of their existing property.
Brad: Got it. So the regular requirements or the ordinary requirements that we often check and, and we calculate and evaluate.
Eric: Correct. And we take it one step further. We not only do we complete our full analysis, we have an underwriter approve and review our findings as well. So we pre approve to approve, based on the buyer’s max purchase scenario. And again, assuming the sale of their departing residents.
Brad: That’s unbelievable. I mean, we are pre-approving the pre-approved.
Eric: Exactly. So then we take that information and partner with Revive to outline, this is what this client is approved for based on these criteria, them selling the property, so on and so forth. Revive does their analysis. They approve the buyer. And Revive now ultimately becomes the conduit, if you want to call it, for their replacement property. So if a client comes to us, wants to purchase a million dollar home, they need to sell a $700,000 home of which they owe 400,000 on. So they’ve got, call it 300,000 in equity that they would be using for the purchase of the property. Revive then takes that information, all the components, okay, you’re going to sell the home and XYZ timeline. We’re going to now position you as all cash for the million dollars. We’re going to give you a million dollars to go purchase this home. Client purchases the home. Their offer gets accepted, which again, Revive being all cash move very nimbly, move fast without contingencies. So, I mean, really close in as little as 14 days.
Brad: Very expedited process.
Eric: Exactly. Which goes back to the ability to, you know, 270% more likelihood of getting your offer accepted as all cash, because cash moves fast.
Brad: That’s insane.
Eric: So what happens is that client uses Revive, and purchases with Revive. They move into the new home, get all situated, get everything out of their old house, get their old house, situated, ready. Call it, you know, 90 day process, whatever that looks like. And then they go and sell their departing residence and take advantage of the ability to sell without being bothered, annoyed, all those components that come with selling a home and having to show the property. And then once that is complete, we then impose and place the final financing based as if they were purchasing the property with a contingency. So at that point, the stress is off. The headaches are over and replacement financing comes into play.
Brad: That’s amazing. That’s amazing. I think a question that I know that I have, as well as probably our clients is, what is the time line from start to finish? And then second question would be, once they’ve acquired the home what’s, what’s the plan then? Do they have the breathing room and the wiggle room to then situate their financing to get into something conventional or in the jumbo space or the, whatever it may be? Non QM space?
Eric: Great question, Brad. And that’s really, you know, every client’s asking that question. So timeline to be in the position to be an all cash buyer, we could complete this really in as little as 48 hours.
Brad: Oh my gosh.
Eric: So from introduction to the time they’re able to actually go and make offers really in the span of, of two days. And really, you know, I say that with caveats that 48 hours requires definite participation from the clients,
Brad: A commitment.
Eric: A commitment. We’re going to need, you know, X, Y, and Z component. You know, the documentation review, we’re going to need this as expeditious as possible. General timeline, it’s usually about three to four days, you know, moving at, call it a normal pace, but definitely I understand speed is a priority. We can move as fast as and sometimes even faster than the 48 hours.
Brad: I mean, that’s a sounds like it’s moving mountains already. I mean, I don’t think I can even look at all my emails in two days, you know, let alone getting a home or getting financed for one. So, I mean, that’s, that’s unbelievable. That’s great.
Eric: Well, thank you. But you know, being able to move fast in this market is crucial.
Eric: And the other part of your question, Brad was around what does the end product look like? What is the timeline? So, and that’s a very valid point. Because again, that goes back to one of the key fears, you know, having this daunting pressure of, I need to do something. Time is not on our side. And the fortunate element with Revive is that that really removes that time constraint. They can typically go from 90 days up to 12 months from the time in which they move into the new home and sell their departing and replace with permanent financing. So, I mean, if you can’t transition inside 12 months, maybe moving right now isn’t the best.
Brad: We might have to have a different conversation. I understand
Eric: Exactly. Really once the new home is acquired and closed, so possession is taken, the client has transitioned into the property. They do the things that need to be done.
Brad: Then the weight is off.
Eric: The weight is off. They move in, start enjoying their new home home. The agent that was, was helping them gets everything, show ready for their departing residents and allows that to run the course.
Brad: That’s amazing. I know that personally, my wife and I, we went from a condo to our new and current home. We had to do a contingent sales where we’re selling our condo and simultaneously making an offer on our current home. And I remember that it was stressful, to say the least. I mean, a lot of hoops, lot of timelines to hit right on the dot in order to make this happen. You know, luckily for us, we weren’t in such a crazy environment that we’re in right now in our market. But outside of that was very stressful, still.
Eric: And you know, that is not just an exclusive feeling or experience to just you. I mean, that is our clients in a nutshell. And that can be a crazy amount of stress. And you start layering other facets and aspects of life on top of that.
Brad: Right. You’ve got life on top of that.
Eric: Yeah. So if it can be avoided, avoid it at all costs.
Brad: Yeah, exactly. I think I’d sign up for that immediately if I knew about this product or system.
Eric: Well, and to that point, you know, to our audience, we would love the opportunity to show how this product could work for you. Please give us a call today. Thank you.