Are you tired of the interest rate rollercoaster? You're not the only one. Today's market conditions have hamstrung many buyers, pushing them into tricky financial situations — if not out of the market altogether. That hurts the bottom line of clients and agents.

We're always seeking to innovate on how we can strengthen our core product offerings like Buy before you sell and Buy with cash to help agents and clients better navigate this unique market. Today, I'm thrilled to share that Homeward Mortgage, an affiliate of Homeward, is launching three mortgage features — No-Fee Refinance, Temporary Buydown, and a Longer Lock Duration — to empower buyers to shop on their terms.

These features help further bolster and distinguish our Homeward Offer by adding powerful new strategies to your home buying playbook. Ready to play chess while others are still playing checkers in the market? Here's what you need to know.

Buy now and refinance later with covered fees

The No-Fee Refinance gives buyers a path to success and a plan for the future. When rates drop, customers can refinance their loans; we'll cover the refinance fees including appraisal, title, escrow, and more. 

Stay on budget with a 2-1 or 1-0 buydown

This program is perfect for cost-conscious buyers on a budget. Homebuyers can lower their effective interest rate for up to two years of their loan using a 2-1 or 1-0 temporary buydown. They'll get lower monthly payments without needing more cash at the closing table.

Additionally, if you are using Buy before you sell or Buy with cash, you can use your seller credit to fund your temporary buydown. (Talk about taking out two birds with one stone.)

Get the certainty of the Longer Lock Duration

We're increasing our rate lock. Once your client is under contract on their new home and past the option period, we’ll lock their rate for up to 120 days. This longer lock duration helps anxious clients take advantage of the rate they want today and ensure it doesn't expire before they can close the loan. Say goodbye to Days-on-Market woes.

Bring clients — and confidence — back to the market

Many buyers who plan to use the Homeward Offer to buy before they sell, or simply negotiate the best deal, will be able to get moving today with these new features which provide them even more flexibility. As we’ve always done, Homeward will continue to respond to the market shift with alternative solutions that overcome the challenges we’re seeing — and this is another step in that direction.

For more on these offerings or to get approved, contact a Homeward Mortgage Loan Officer.



_{Homeward Mortgage LLC | NMLS # 1911059 | 916 S Capital of Texas Hwy, Ste. 2.200 Austin, TX 78746}

Signs that the housing market is cooling are here. The news may dampen the spirits of real estate agents and home sellers who have taken advantage of sky-high housing prices. However, the news is likely to come as a relief to would-be homebuyers who have had a tough time in an ultra-competitive market.

However, a cooling housing market comes with its own set of problems for buyers. Interest rates have climbed substantially from the historic lows of late 2020. Housing prices may not be skyrocketing, but they may not come down anytime soon. And as competition shrinks, the likelihood that buyers can purchase a new home at the same time as they sell their current home becomes more unlikely.

Your clients will need help buying and selling their home in an increasingly volatile market. Your client may need to buy a new home before selling their current one, or they may need to make a cash offer to eliminate deal-stalling contingencies. Luckily, Homeward’s innovative homebuying and selling solutions address both, adding a sense of calm and stability to the process–and all while keeping agents directly at the heart of the transaction.

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Homeward empowers cash-strapped buyers to Buy before they sell

A cooler market means homeowners are likely to experience difficulty lining up the sale of their home with the purchase of their new one. Homeward solves this tricky conundrum with our Buy before you sell solution. The process is surprisingly simple:

1. Your client gets approved for a set amount, enabling them to make an offer as soon as they find a suitable house.
2. You work with us at Homeward to make a cash offer on the house.
3. You win the offer, we finalize the sale, and your client moves in as soon as the title is ready.
4. Your client purchases the house back from Homeward as soon as their mortgage is ready.
5. Your client pays a small monthly fee as they wait for their former home to sell.
6. If approved ahead of time, Homeward will buy their old house from them if it doesn’t sell within six months.

All Buy before you sell offers are made in cash. Cash offers grew in popularity over the last few years in the hot seller’s market as ways to make offers more attractive to homebuyers. While homebuyers are likely to find the current market more buyer-friendly than it was at the height of the pandemic, cash offers remain attractive to sellers in any market.

Homeward solves a problem common to many people wishing to make a cash offer: Most people’s wealth is often tied up in their current home. This makes it difficult to unlock the liquid cash needed to make a cash offer. The median value of assets in the average American’s bank account only totaled $5,300 as of 2019 per the Federal Reserve. Meanwhile, the National Association of Realtors estimates the median price of a house in May 2022 at just over $407,000.

This issue was one all-too-familiar for Tim Heyl, founder of Homeward. As a former real estate agent, he saw how difficult it was for his clients to purchase a new home while their equity was trapped in their current home. He saw that this lack of liquidity coupled with the need for cash created the following catch-22:

1. A homeowner needs to sell their house to raise enough cash to make a cash offer.
2. They need to buy a new house before they can sell their current one.
3. Sellers keep rejecting their offers in favor of cash ones …
4. … but they need to sell their house to raise enough cash to make a cash offer.

Eventually, Tim used money from his own savings account to purchase the house for his clients. Once his clients were approved for a mortgage, they purchased the house back from him — and the idea for Homeward was born.

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Homeward’s Buy with cash provides stability for the seller

Sellers prefer cash offers over traditional ones because cash supports a stable, easy, and expedient closing process in any market. Signs indicate the market is cooling, but competition will remain as demand exceeds supply. The National Association of Realtors estimates that four offers are placed for every residential property sold. Supply issues fuel this competition, with Realtor.com estimating that 5.8 million homes need to be built to bridge the gap between supply and existing demand. 

Your clients will always need to find ways to make their offers stand out to sellers — and Homeward can help. The biggest advantage of cash offers to sellers is that they eliminate potentially deal-breaking contingencies. Sellers enjoy Homeward Cash Offers specifically because:

• Most traditional transactions include a “financing” contingency that allows buyers to back out if they can’t secure a mortgage. Homeward approves your clients for a certain amount ahead of time, so sellers know the money is guaranteed.
• Most traditional home sales include a “house sale” contingency that allows buyers to back out if their home doesn’t sell within a set time. Buy before you sell eliminates the need for this pesky contingency.
• Sellers know eliminating contingencies not only reduces the risk of a sale falling through, but it also speeds up the closing process.

Denver homebuyers Austin and Lewis experienced issues with contingencies as they tried to upgrade from their starter home. The couple saw 20 to 30 houses and made numerous offers before realizing that their home sale contingency proved a non-starter. Per Lewis:

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“The home sale contingency really hobbled us. We’d put together a good offer, but when the seller saw the contingency, our offer would go to the bottom of the stack.”

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After their real estate agent recommended Homeward, Austin and Lewis decided to give it a try. They were approved for a Homeward Cash Offer and soon made an offer on a home. Despite being one of 24 offers, their offer was the one that was accepted — an outcome aided by their lack of a house sale contingency. 

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Homeward keeps agents at the heart of the transaction

Homeward was founded (and is currently operated) by real estate agents, so we’re keen on building a tool that supports agents. PropTech tools too often grant assistance at a great cost to real estate agents. Sometimes they aim to cut real estate agents out of the equation entirely. Other times, a product will give real estate agents great insights or assistance — but for a chunk of their commission.

The experience with Homeward is altogether different. We’ll work closely with you during the home sale process to ensure everything goes according to plan, but it’s ultimately your client who transacts with us. Meanwhile, you get to keep 100% of your commission while getting credit for suggesting Homeward in the first place.

Homeward’s agent-friendly focus makes it an indispensable tool for agents looking to get a win for clients who’ve been having a hard time closing in the current market. Grant Rothberg, a celebrated Houston-area realtor, appreciates the added value Homeward brings to his already formidable real estate skills:

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“I recommend Homeward whenever possible because I know it gives my clients the very best chance to land the house they want the first time. I wouldn’t be doing my job if I knew there was a tool like Homeward and I didn’t advise every client to use it.”

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After helping her client close on a house in just 14 days using Homeward, Atlanta-based realtor Jezell Griffin agrees:

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“It’s a really great tool. I mainly work with first-time homebuyers, and it helps to have Homeward available. It builds a lot of trust when I can say, ‘I’ve got this option that I guarantee can give you better odds of getting the home you want.’”

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Use Homeward’s pain-free cash offers to seal the deal

You know too well what it’s like to lose out to a cash offer. Now imagine this: Your clients discover the house of their dreams. You suggest Homeward as a way to sweeten their offer. Despite a dozen competing bids, your clients win out, close quickly, and live happily ever after. You get the credit — and you keep every penny of your hard-earned commission.

As cash offers continue to create unique solutions in an increasingly complex market, the choice is clear: Use a Homeward Cash Offer to win for your clients and avoid losing out to homebuyers who started using it first. Your clients will thank you.

Schedule a call with a Homeward advisor to find out how the Homeward Cash Offer can help your clients

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Tim Heyl is a real estate agent and the CEO and Founder of Homeward. He has deep experience building real estate teams and businesses. At 24 years old, Tim was named Austin's #1 real estate agent by the Austin Business Journal. He ultimately led his brokerage, The Heyl Group, to be a 4x Inc 5000 company. Tim built several real estate businesses, including Mint Title and a lead conversion call center called Phone Animal. In 2018, he founded Homeward, his first venture-backed business and was soon named Inman News Innovator of the Year.

Homeward was proud to be the title sponsor of ICLV 2021. In this interview, Tim sits down with Julie Youngblood, one of Homeward’s partner leads and a native Las Vegan, to talk about how the market is changing, why cash will always be king, and what’s so great about Inman Connect.‍

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Julie: Where did you get the idea for Homeward?

Tim: I got the idea from my clients. From their problem. I kept running into the same thing. Buyers couldn’t make an offer on a new home until they sold their old home. I kept watching buyers try to work around this, but they got stuck paying two mortgages, moving twice, or even missing out on a home they loved altogether. 

It bothered me. Buying a home should be fun and exciting. But a lot of my buyers were anxious and stressed. They felt rushed to make decisions — and sometimes they made really bad ones. There were tech companies trying to address this issue. There were iBuyers. But these solutions were either cutting into the agents’ commission or trying to cut agents out of the picture entirely. And I really believed agents should be part of the solution. 

So I stopped waiting for someone else to solve my clients’ problem. I did something crazy. In December of 2018, I bought the home my clients wanted with cash from my savings account. That cash unlocked the home equity my clients had tied up in their old house. Then they sold that old house and got a mortgage to buy the new house back from me. It was an epiphany. My cash made the process easier, calmer, and more certain for that client. And it gave them the ability to move when it was good for them, instead of when it was good for the buyers. They didn’t have to rush out of their house.

I wanted to figure out how to scale that. How to give other agents the ability to do the same for their clients. I knew the problem I was seeing wasn’t unique. I knew that other agents kept bumping up against the same limitations with the traditional real estate transaction. Most importantly, I knew solving a problem like this would get my past clients talking and referring their friends to me, not for me but for them - and it worked!. So that idea became Homeward’s first service: Buy before you sell. And top teams we partner with have been using it to generate their own seller referrals ever since! 

Julie: We’ve seen phenomenal growth in only two and a half years. As the market begins to cool off, will the Homeward Cash Offer still be popular?

Tim: Look, cash is king in any market. And here’s why: sellers prefer it. You’re right, in the multiple-offer situations we’ve seen over the last year or so, cash’s number-one advantage is that it can beat traditional offers. In fact, cash offers are four times more likely to beat financed bids. But in less competitive markets, sellers still prefer the Homeward Cash Offer. Why? Because it’s a contingency-free offer. It’s a cash offer backed by our institutional funds, so it eliminates the home sale, finance, and appraisal contingencies. Sellers can be confident that it’s going to close without hiccups or surprises. So they’re going to choose the Homeward Cash Offer over a traditional offer. 

And as the market cools off, they’re going to continue to do that. So, what does that mean for the buyer? That even in a buyer’s market, cash gives them a competitive advantage. It empowers them to command better terms when they’re negotiating a deal. That may mean they can close on their timeline, get some conveyance they really want, command seller credits, or even pay less for the house. 

Cash is still the gold standard of offers — regardless of market conditions.

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Julie: Other innovators in the space won’t work with just any agent. They have their own team of agents or will only refer clients to certain agents. Why did you decide that Homeward would work with anyone? ‍

Tim: Real estate is going to continue to evolve. And that evolution puts the agent’s future at risk. But  buying a home is one of the biggest financial decisions most people ever make. And it’s also one of the most stressful — second only to divorce. So people need an expert guide when they’re going through this. I want all of those guides — all of those agents — to have access to our solutions. 

I am an agent. I have my own team of agents. I understand the importance of agents. So I want Homeward to be an agent-centric company. Most of our Customer Experience Managers and Partner Leads are agents themselves. Our senior leadership, our customer experience managers, our agent advisors — many of them are real estate agents. That’s important to us because it enables us to deliver our solutions in ways that drive business growth for agents and keep them at the heart of the transaction. 

We have established relationships with a lot of brokerages. But if you’re an agent in one of our markets and you want to innovate with us, we want to work with you. ‍‍

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‍Julie: The last year and a half has been a crazy time for real estate — mostly due to the COVID-19 pandemic. What changed for Homeward during that time?

Tim: It’s been a roller coaster, hasn’t it? When COVID-19 first hit, everything came to a standstill. We thought we’d close the office for a few weeks, but our future was really uncertain. Real estate’s future was really uncertain. It was hard to imagine people showing their homes during a pandemic. It was hard to predict what the economy would do. But it came back. The market came back — in fact, it came back with a vengeance. 

The new normal — remote work and all that comes with that — made people rethink their real estate choices. And the market exploded. We saw a 600% revenue increase in just six months. We offer a certification program — a webinar agents can attend — for agents who want to use our solution. Over 12 months, we saw 4.5x growth in the number of agents who did that. 

So what happened at Homeward during the last year and a half? In May of 2020, we had a successful but challenging series A round of funding that raised $20MM in equity. Raising money during a pandemic is no joke. And this was early in the pandemic, when everything was still up in the air, so we thought that was a real testament to our potential. In January of 2021, we introduced our second solution — Buy with cash — the cash offer upgrade for clients who want to make a cash offer, but aren’t also selling a home. Demand was through the roof. Agents had been asking for it — they wanted to be able to make all of their buyers cash buyers — so they were ready and waiting for it.

In May 2021, we closed an incredibly successful series B round of funding that included $136MM in equity. That was big. That money has allowed us to do a few things. Most importantly, it enabled us to scale service and support to meet the huge demand we were seeing. So those funds allowed us to do a lot of hiring. Actually we’re still hiring if anyone’s looking. We’ll also use that funding to expand to new markets. ‍‍

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‍Julie:  What’s next for Homeward?

Tim: We’re getting ready to roll out our solutions to more markets and we’re really excited about that. That’s one of the other reasons we did a big fundraise last spring: we want to make the Homeward Cash Offer available to even more agents. Stay tuned to hear more about our expansion news.‍

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‍‍Julie: What are you looking forward to most about ICLV 2021?

Tim: Brad Inman and his team always do such an incredible job of giving us the macro context of what's going on - what's working, what's not, and where we need to up our game. I'm really excited to learn from the best.

If you're an agent interested in turning contingent clients into cash buyers, schedule an appointment with a Homeward Advisor here.

Today, after a year of unprecedented demand for our products, we’re pleased to announce that we’ve secured $371M to help even more agents and their clients win with cash offers in today’s competitive market. “The timing is just right to take on additional growth capital to help us meet this tremendous demand,” says Founder and CEO Tim Heyl. 

Heyl became a real estate agent when he graduated from college in 2009. At 24, he was named his city’s number-one real estate agent by The Austin Business Journal. He led his brokerage, The Heyl Group, to become one of the top 25 agent teams in the country. 

But Heyl kept running into the same problem. “My buyers who already owned homes felt rushed to make decisions and they often made really bad ones,” he explains. “They couldn’t make an offer on a new home until they sold their old home.” He watched them get stuck paying two mortgages, moving twice, or missing out on the home altogether. So, in December 2018, he tried something radical: he used his own savings to buy a house his client loved, and held it for them until they could sell their existing home and secure a mortgage. This service became Homeward’s first offering: Buy before you sell was born. 

Two and a half years later, we’ve helped hundreds of clients buy their homes with cash, and today we’ve secured $371M to help even more homebuyers eliminate their financing, home sale, and appraisal contingencies. This successful fundraise comes just a few months after we introduced our second service, Buy with cash, in response to popular demand. 

We’ve witnessed tremendous growth in agent-referred customers over the last year. And this announcement shows that agents and homebuyers aren’t the only ones who recognize our potential. Norwest Venture Partners led this funding round with participation from Blackstone (BAAM), Breyer Capital, and existing investors, Adams Street, Javelin Venture Partners, and LiveOak Venture Partners. “This new funding will help us scale our service and support to meet strong demand and launch in more cities,” says Heyl. 

Working with agents, not against them

We empower top agents to make every buyer a cash buyer, keeping them at the center of the real estate transaction. “The Homeward Cash Offer addresses real problems for buyers,” says Jeff Crowe, managing partner at Norwest Venture Partners. “But the team has also identified a winning strategy by partnering with agents.”  Most alternatives to traditional real estate minimize or replace agents. But when Heyl founded Homeward, he firmly believed that agents should continue to be a key partner for homebuyers, who need an experienced, local advocate to ensure they have a successful buying and selling experience. 

“Buying a home is one of the biggest financial decisions most of us ever make,” explains Brian Gubernick, our Chief Real Estate Officer. “Homebuyers want an expert by their side throughout the process. So we keep agents at the center of the transaction, offering them services that solve their clients’ problems.” And while we can work with any agent, we strategically partner with top teams, providing dedicated support to help them get more leads and close more deals. 

Barbara DeBow of Realty Austin, is one of those strategic partners. She’s the one who referred proud grandparents Bob and Sharon to us, “Homeward helped my client’s retirement dreams come true,” she says. 

Bob and Sharon, who lived in Houston, decided to move to Austin, Texas, to be closer to their son, daughter-in-law, and their new grandchild. But they had a problem. “Our equity was tied up in our house in Houston, where we’d lived for the last 25 years,” explains Bob. “We needed to find a way to extract the capital so we could make the down payment on a new home in Austin’s competitive market.” They asked DeBow for help and she suggested our Buy before you sell service. 

“Without Homeward, we would have been stuck with two bad choices,” explains Bob. “We could cash out our retirement and use that money to buy the home, or sell our existing home first and then live in an apartment temporarily and move twice.” Instead, they made a Homeward Cash Offer to win their dream home. They were able to buy a home less than a 15-minute drive from their son’s family, and then take their time selling their old home for its full market value. “Life isn’t too bad right now,” says Bob, who gets to see his granddaughter much more often. 

A calmer, more convenient homebuying experience

Like the first buyer Heyl helped in 2018, about 43% of homebuyers need to sell a home before they can buy. “Our cash makes the process easier, calmer, and more certain for them,” explains Heyl. Buying before they sell also gives customers the ability to move when it’s best for them, not because they have to.

“Selling and buying at the same time is unnecessarily complicated,” says Katie Collins, our Director of Customer Experience. “Factor in your own family’s complexities, and it’s enough to make you want to stay put.” Homebuyer Wes and his family, which includes a child with special needs, were especially anxious about buying a new home and moving. “Stairs are an obstacle for their son,” explains Collins. “So they needed a ranch home with bedrooms on the first floor.” And living in temporary housing or moving twice was simply not an option with three young children.

“Before we found Homeward we made above-asking offers on a few other homes and lost,” says Wes, who recently bought a home with his wife near Atlanta. “Because our offers were contingent on us selling our old home, we just weren’t competitive enough and kept losing.” So Wes’s agent got them approved for a Homeward Cash Offer. When the perfect ranch home came on the market, they were able to make a strong, non-contingent cash offer and win, beating several other offers. And when they listed their old home, it sold in a day.

Cash is still king

With record-low inventory and historically high demand, cash’s competitive advantage is more important than ever. In fact, cash offers are four times more likely to beat financed offers. “In today’s market,” explains Gubernick, “sellers want to know which offer has the fewest contingencies and which offer is going to close more swiftly and smoothly. The answer is the cash offer.” 

Homebuyer Austin and her husband agree. “We were able to buy a home in the crazy Colorado market — in Denver! — thanks to Homeward,” she explains. “Our offer wasn’t even the highest offer and we still beat 22 others.” explains Austin. 

Today’s announcement will enable us to scale service and support customers and to expand to additional markets.

If you're a homebuyer interested in learning more about becoming a cash buyer, schedule an appointment with a Homeward Advisor here.

If you're an agent interested in turning contingent clients into cash buyers, schedule an appointment with a Homeward Advisor here.

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Stepping into the emotional and financially tricky process of selling and buying a house at the same time can be overwhelming. With all the options, from real estate agents to  iBuyers to companies like Homeward, figuring out which one fits your expectations, budget, and timeline could turn rocky fast. However, illuminating the differences between your choices may make the decision easier.

The traditional model, real estate agents, operates far differently than iBuyers like Opendoor, Offerpad, Knock, Zillow Offers, RedfinNow, Abodewell, or Orchard (formerly Perch). And although Homeward is sometimes confused with an iBuyer, Homeward’s buy before you sell process is distinct from the competition.

To offer a bit of guidance on your home purchasing journey, we’re sorting through what makes Homeward unique when compared to iBuyers, and how you can select the process that matches your needs.

What’s an iBuyer?

iBuyers are companies who purchase your existing home without you having to list it. They then perform repairs on your home if needed, and sell it on the open market themselves. Their process can be quicker and easier than traditional selling with a real estate agent; but homeowners typically get less than market value for their home, and sometimes repair costs on your home eat into your profits.

Think more along the lines of tech-enabled home flippers when it comes to iBuyers. Although you’re getting the cash for your existing home, some contracts bar you from buying a new home until your current home sells. Plus, you’re giving up the opportunity to sell your home for its full value on the open market. Homebuyers who need to move quickly, aren’t fully invested in getting as much as possible for their home, or want to skip the selling process, working with an agent, or repairs, may find this route works for them the best.

iBuyers can charge you from 5 to 9 percent of the home sale price in addition to repair costs and real estate agent fees. The estimates they provide may show what you might get from the sale, but they don’t include what you could pay for repairs; a key piece of info that can eat into your home sale profits fast.  

iBuyer use proprietary models to predict a reasonable offer on your current home, which can vary by tens of thousands of dollars between companies. Just like you would if you went with a traditional Realtor or real estate agent, it’s always a good idea to shop around and compare sale prices so you can get the highest offer.

After you receive your estimate and accept it, some companies give you all-cash from the time you accept, while others provide profits after your home sells and the repair costs have been deducted. In all cases, the iBuyer now owns your home. That means they pay taxes, utilities, insurance, and maintenance for a service fee, which is usually 6 to 7 percent on average. And you’re paying for home repairs and/or upgrades they believe the home needs to be market ready.

The selling of your existing home plus the fees are how iBuyers make their profits. Because the offer you received was likely below what the home could have sold for on the open market, and iBuyers usually subtract fees from your profit, they list your home with a higher price tag. Then, they take the profit amount from what they paid you and what the home actually sold for.

If you’re a homebuyer who wants to avoid some of the headaches of selling, like showings, staging, or waiting for the right buyer, or are in a time crunch, selling your home to an iBuyer may be the option that fits your needs.

Major iBuyers:

• Opendoor: The largest iBuyer that’s in the most markets, Opendoor buys your home, completes repairs, then sells your home for a mark up. They typically charge you around 6 to 7 percent plus repairs, but you’ve now alleviated the issue of selling your house with a traditional agent… and eventually, you have funds to purchase your new home. Repair costs can be 1.7 to 3.2 percent of the purchase price with Opendoor. When you request an offer, it’s delivered within 48 hours, it’s an all-cash offer, is valid for 5 days, and includes a net profit estimate for seller. If the seller accepts, they can schedule their home assessment and Opendoor completes repairs after you move out. They then deduct any costs from your sale price, and you get paid so you can shop for your next home. This is for sellers who want convenience over the full price for their home and aren’t worried about getting stuck with a big repair bill to get the home ready for listing.
• Offerpad: Similar to Opendoor in that they buy and then sell your home, Offerpad has some minor differences in operations, but perform the same function as Opendoor. They’re making you an offer, you’re paying for repairs, then Offerpad is dealing with selling your home while you then take the funds to buy your new house.
• Zillow Offers: Limited in the current number of available markets, Zillow Offers is providing essentially the same service as Offerpad and Opendoor. Zillow is hoping you’ll sell your home to them and work with their network of real estate agents to buy your new home.
• RedfinNow: Cousin to Zillow Offers, and lacking a bit in marketplace presence, RedfinNow has one differentiator from the other iBuyers: if the offer they give you is too low or you’re not a fan of it, they can connect you with a Redfin listing agent who can sell your home at a 1 percent fee.
• Knock: Unlike the other iBuyers, Knock’s uniqueness comes from their model of essentially swapping or trading one home for another. This works for sellers who’re looking to sell a home and buy another simultaneously through Knock’s “trade-in” program. Sellers don’t have to list their home on the market, they buy their new home via Knock, and then Knock turns around to list and sell the existing home.

What’s Homeward?

Homeward provides funds for you to buy your new home with an all-cash offer without you having to sell your existing home. After the new home is secured, Homeward rents the new home back to you while you get your existing home ready to sell. Homeward affords you six months to get top market value for your existing home. Homebuyers and Homeward agree on a guaranteed price for your current home before buying your new home, and Homeward will buy it for that price in the unlikely case that you have trouble selling it.

When your existing home closes, you buy your new home back from Homeward for the original purchase price plus a fixed convenience fee of 1.9 percent of the purchase price.

Homeward allows you to buy the home you want before you sell the one you’ve got – the opposite of what an iBuyer offers. And when it comes to fees, you’re paying rent plus the 1.9 percent convenience fee only. Once your current home sells, you buy back your home from Homeward and you can use the cash from your home sale towards a down payment on the new one.

Unlike with iBuyers, those who use Homeward don’t have to sell their existing home at a discount or worry about nontransparent repair fees. They can secure their ideal home and take it off the market so they don’t miss out on their ideal home, list their previous home for full market value, leaseback their new home for up to six months, and have the guarantee that their home will be purchased by Homeward if it doesn’t sell on the open market.

Homeward’s Process:

• Get approved and then shop for your new home
• Find your dream home on your schedule and make a competitive, all-cash offer on it with Homeward’s funds (All-cash offers are two times more likely to beat out offers that have financing contingencies, and all-cash offers can sometimes command 2 to 5 percent discounts on the purchase price from the seller)
• Close quickly on your new home purchase because it’s cash instead of a financed mortgage
• Move once into your new home and rent your new home from Homeward for up to six months
• Prepare your current home for sale by getting repairs and maintenance completed if necessary
• List your existing home and take your time to get full market value with the guarantee that if your home doesn’t sell, Homeward will buy it from you at the previously agreed upon price
• When your existing home closes, you buy back your new home at the original all-cash offer price plus the fixed 1.9 percent convenience fee

Homeward vs. iBuyers

Between the two categories, Homeward is looking to finance the purchase of your new home, then you’re able to sell your current home. iBuyers are looking to buy your existing home then sell it themselves. Homeowners who want to sell quickly, are not concerned about getting full market value , and want to remove themselves from the selling process and handling repairs may want to consider the iBuyer approach. Those who are interested in buying a house before selling but don’t have the funds, and who want the best chance to secure their dream home in a competitive market or are tired of watching great homes pass them by while their funds are tied up in their current home might want to consider going with Homeward.

iBuyers have variable fees (unlike Homeward), and homeowners who sell to iBuyers may lose profits because the iBuyers typically provide below market value offers. Additionally, those who’ve sold their home to iBuyers often have to make mortgage-contingent offers on their next homes. But buyers who work with Homeward go into their new home purchase with an all-cash offer and contingency-free contract; a much more attractive offer to sellers.

Homeward also allows you to get full market value for your current home because you’re able to sell it on the open market, unlike with iBuyers. And with the six-month leaseback period on your new home with Homeward, you can prepare your existing home for sale by completing repairs or staging on your own timeline. With an iBuyer, the idea is to move quickly and trust that the estimates they provide you for repair costs are fair.

When you’re considering Homeward or an iBuyer, think about how critical buying your new home before selling your existing home is to you, if transparent fees are important, and if you want to sell your current home for full value and on your own schedule.  

Although both iBuyers and Homeward guarantee a home sale, Homeward provides the opportunity and convenience to purchase your dream home without the concern of selling your existing property first. The ability to grab your perfect house off the market with an all-cash offer, then handle repairs and selling your current home after the fact not only helps reduce stress, but gives homeowners a chance to get more money from their home sale. iBuyers may be able to give you a quick sale, but Homeward invests in your future home as well as helping you tie up the loose ends on your existing property.

Does Homeward feel like a fit? Learn more about how Homeward works, or call 512-956-5087.

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So, you want to move into a new home quickly but have to sell your existing home first? You’re in the same predicament as 43 percent of homeowners looking to move. It’s one of the reasons the home selling/buying process is considered one of life’s biggest stressors. There’s so much pressure to sell before you buy so you don’t carry two mortgage payments – if you can even qualify for a second mortgage. But if you sell before you buy the next house, you may have to move twice. Meanwhile, you have to live through showings where strangers walk through your home, opening cabinets and closet doors as they assess your personal space. You’d think after decades of this craziness, someone would have thought of a better way.

Fortunately, they have. There are actually a few newer options that give homeowners more control over the timing of their move. We’ll cover two of the more popular ones to help you choose wisely.

iBuyer

You may have noticed signs around your town saying things like “We’ll buy your house with cash.” These and similar online offers are typically advertisements from iBuyer companies who use technology to estimate the value of your home based on similar homes recently sold in your area, then offer a “fair value” to buy your home with cash, sight unseen. The offer may be adjusted, however, after an on-site inspection where the condition of home is assessed. Cash offers close faster because there are no financing, appraisal or home sale contingencies to deal with that can slow or prevent the closing process, a process that can take more than two months from listing until close. Once you’ve sold your property to an iBuyer, the company puts the home back on the market. They’re not in as much of a hurry and can take on the burden of maintaining a pristine home for showings and waiting for an acceptable offer.

It’s an attractive option, but you may wonder how iBuyers make their money if they’re buying your home at a fair value and then reselling it without making improvements as with a flip. More on that “fair value” later, but most charge a fee, anywhere from 5-8 percent of the sales price. It’s more than the average rate you’d pay a full-service real estate agent to sell your home, making it an option to carefully consider before you pull the trigger. If your objective is to sell quickly so you can buy and move faster, using an iBuyer will get the job done, but you’ll pay a premium for it.

The Homeward Way

For homeowners who want to buy their next home now and not feel pressured to sell their existing home first (and make more money doing it), there’s another option that can cost less than using an iBuyer. Homeward approves you and then allows you to use the company’s money to make an all-cash offer on your next home. You can move into your new home immediately after closing, sometimes in as little as 10 days after the seller accepts their all-cash offer.

You can then take your time selling your existing home while you make leaseback (rent) payments on your new home. This gives you flexibility to decide when you move. You can stay in your existing home while remodeling your new home; you can move into your new home immediately and avoid all of the showings on the old home; or you can move whenever you’re ready. As soon as your old home sells, you pay Homeward back and assume ownership of your new home.

Homeward solves a few of common home buying problems. First, homeowners have the cash to make a highly-competitive offer to buy the home they really want without rushing, stress or pressure to sell first. They also avoid having to play the perfect-timing game where they cross their fingers and hope they can sell and buy a new home at precisely the right time. Third, they can schedule their move on their own schedule to fit their needs. Finally, they don’t have to make an offer on a house with a risky home sale contingency that may not be acceptable to the seller.

Homeward Fees vs. iBuyer Fees

Homeward charges a 1.9 percent fee on the purchase price of your new home, plus the daily prorated leaseback until you sell your existing home. Your leaseback payment is similar to local market rents. You’ll know the exact rate in advance before you make an offer. When you buy the house back from Homeward, there are no extra fees. You buy it back at the same price Homeward purchased it for with their cash. No duplicate closing costs, either. Homeward is transparent about their fees and how the process works.

If your existing home sells quickly, you’ve paid a 1.9 percent fee plus a month or so of leaseback payments. You would also pay the typical seller and buyer agents’ fees. Opendoor is a well-known iBuyer and currently advertises an average service charge of 7.1 percent, which includes their service charge and the real-estate agent fee associated with selling your home. Zillow is another iBuyer and does not reveal its fees until you get your offer. Keep in mind that while you may get an instant online offer, iBuyers frequently lower their price once they inspect your home.

iBuyers not only charge a full commission, they “build in a discount to fair value to compensate for the risk they take by providing you with ‘instant’ liquidity…these costs can add up to more than 10% of the fair market value of a home compared to 5-6% in commission with a traditional agent,” says Forbes. “Zillow recently explained that 90 percent of sellers who engaged in its Instant Offers platform decided against the iBuyer offer and chose a traditional agent instead. If 9 out of 10 consumers pass, the pricing can’t be that compelling.”

3 Tips on How to Choose between an iBuyer and Homeward

Buying and selling real estate can be complicated and stressful yet highly profitable if you do it right. Homeward and iBuyers make the process simpler, but you still must consider all of the risks and benefits. Here’s a brief cheat sheet to help guide your decision making process.

Tip 1: Determine Your Goals

Before you can make an informed decision on which real estate transaction you want to undertake, ask yourself what your ultimate goals are. Are you simply looking to move quickly – maybe because of a job relocation – and are willing to pay a premium to do so? Have you found a home already and need to sell your existing home fast? Do you want to avoid the hassle of listing and showing your current home?

Once you have your answers, do your homework on how each option helps you reach your goal in the easiest and most cost effective way. You can visit company websites and/or call each company to speak with a representative. Be sure to have all of your questions written out so you don’t forget anything that’s important to you and can save time.

Tip 2: Calculate All of Your Out of Pocket Expenses

As with any financial transaction, you need to do an apples-to-apples comparison of all of the costs you may incur with each option. Because some iBuyers don’t publish their fees upfront, you may have to call them to see if they’ll disclose all of their fees. Otherwise, check their websites, particularly their Pricing page and FAQ page to see if you can find them. Even if you feel the company has posted all of its fees on its websites, you may want to call them anyway to confirm there are no hidden fees. You should get any verbal pricing in writing.

Do the math. Add up all of the commissions and fees first. Consider whether the company is purchasing your home and what that price will be, or if the company allows you to sell your home on the open market. What’s the difference in how much you’ll take home after you sell? Will you be selling your home yourself or will you be paying an agent commission to do so? What is that commission? All of these factors will result in a ballpark cost to you.

Tip 3: Read The Fine Print

Until you enter into the approval process, it may be difficult to know exactly what you’re getting into. Some companies publish all of their pricing, terms and conditions, and how the process works on their websites. Others will ask you to apply first, then send you their fees and offer. Whatever the case, do not enter into any agreement without first carefully reading what you’re obligations are at each stage and the fine print on the contract. You don’t want any surprises in an investment this large, so be sure you have all your facts before you agree to anything.

Once you go through these steps you should have a good idea of the timing, process and cost of iBuyers vs. Homeward. If you’d like to learn more about Homeward, check out the How It Works page.

The Age-Old Dilemma

The residential real estate process has an inherent flaw, at least for those without unlimited funds. In order for most to purchase your next house, you must sell your current home and pay off your existing mortgage first. So many homeowners wonder, “If I have a mortgage and want to buy another house, will I have to sell before I begin the search?

For most, the answer is yes. Most banks won’t approve another mortgage unless the first one has been paid in full. Unless you have an income that can support dual mortgages, plus an excellent credit score and a low debt-to-income ratio, you’re in the same boat as the rest of us.

This poses the question of whether you should begin your new home search before or after you sell your existing home and pay off that mortgage.

Shop for Your Next Home First

If you have a mortgage and want to buy another house right away, you can begin your search before selling. There’s a problem with that, however. You may actually get your wish and find your dream house. Then what? Remember, you’re tied to your existing mortgage. You may be one of the few who can get approved for a second mortgage, but you’re assuming you won’t have to pay two mortgages for long, right? What happens when your house doesn’t sell as quickly as you assumed? How long can you afford to pay both mortgages and their related bills before your savings take a major hit? As you can see, this is risky.

The other scenario is to immediately put your house on the market and hope it will sell before another buyer purchases your dream house. This is also risky. The average home sold in 68 days in 2018. That’s from listing to close. The seller can’t just rely on your offer though. They’re going to want you to close in a reasonable time. They know plenty of offers fall through, which is why they have a deadline. If you’re unable to sell your home in time or are held up due to other financing issues, the seller will go with the next available buyer and you’ll lose out on your dream home.

To sell your existing home quickly, you may decide to list it below market price. You may not make as much as you were hoping, but at least you can likely sell quickly, preferably before someone gets your dream house. It’s important to consider how much you will need to ask in order to be able to pay off that mortgage and have enough left over for a down payment on the new home. Ask too little and your dream home might be out of reach. Ask too much and you risk having your home sit on the market while the home you really want goes to the next highest bidder.

Since you have to wait for your home to sell, you’ll need to place a home sale or mortgage contingency on your offer. The seller has to decide if they want to accept this contingency. Accepting your offer requires them to pull their house off of the market and waiting to see if you sell your home and pay off your mortgage within a specific period of time so the deal can close. Once again, however, this is risky. Not many home sellers are willing to wait, especially if the market is hot, their neighborhood is in high demand, and/or their home is new to the market. It is often worth it to them to decline a contingent offer in hopes of a “clean” offer with no contingencies. Wouldn’t you?

Another option is to make an all-cash offer using the funds of a company like Homeward. With this innovative alternative, you can search for a new house even before you list and sell your existing home. When you find the home you want, you apply to use their money to make the purchase. They actually buy the home on your behalf using their cash. That’s the good news. The even better news is all-cash offers are the cleanest offers. That’s why they are twice as likely to beat out financed offers and can result in a 2-5 percent discount from the seller. With no bank appraisals needed, you save time and money.

This option gives you ultimate flexibility in when you move into your new home. You can move in as soon as you want. You have the control to move immediately (avoiding staging and cleaning the home for showings), after you complete renovations on the new home (a huge plus if you don’t want to live in the home during remodeling), or when your existing home sells. All that you have to do is lease your new home back from Homeward until you close on your existing home sale. This process completely removes the hassles and risks associated with having a mortgage and wanting to buy another house.

Sell First

Most experts will tell you that you should sell your existing home first to avoid paying for two mortgages or having to move twice. If you decide to sell your existing home before you buy your next house, things can get just as sticky as if you decided to search first before selling. Selling first means you must wait to look for a house until you at least have a solid contract on your existing home. For many, this can be a lesson in patience. It’s hard not to look around and see what’s out there.

When you do get a contract on your existing home, the stress really begins. Now, it’s a mad dash to find the right home, put in an offer, negotiate, then wait for the inspections and appraisals if your offer is accepted. If it’s not, you’re back to square one. The clock is ticking on the close of your existing home. If you don’t close on a new home before you close on your existing home, you’re going to have to move twice.

This scenario is all too common. People sell their current home before they are in their new home, requiring them to pack up, rent a home and often a storage unit, and unpack their things into a temporary place. They can pay rent and storage fees for months while they search for the new home and wait for their purchase to close. Once it does, they get to pack up again, pay movers (again), and finally get settled. The process is not only expensive, but it’s unbelievably stressful and can often result in homeowners choosing a home out of desperation more than for true love for the house.

In the best-case scenario, homeowners who sell first are blessed with the perfect-timing angels. There is no lag time between selling and buying and they can move from one house to the next one time with no stress. Good luck with that.

If you have a mortgage and want to buy a house, think hard about each option and consider the pros and cons. In the end, the objective is to get into the house you want as quickly and affordably as possible. Play your cards right and you can turn what is considered one of the most stressful times in life into the fun, exciting achievement it should be.