As multiple offers have become increasingly common (if not the norm) in markets all over the country, real estate agents and their buyers are becoming all too familiar with the feeling of losing to an all-cash bidder. And if those buyers could have offered cash, they likely would have—and won the bid. According to industry statistics, nearly one in three homes last year were purchased with all cash.
Zavvie research reveals that buyers armed with a cash offer are going under contract nearly seven times faster than financed buyers, making 1.1 offers to win a house compared with every seven for buyers using a mortgage. Cash can save both you and your buyers an incredible amount of time, stress and frustration, not to mention money.
A new study from researchers at the University of California-San Diego finds that since 1980, cash buyers have paid about 11% less than those using a mortgage. On a $400,000 home, about the median-priced home sold today, that’s a difference of $44,000.
What if all your buyer clients could make a cash offer?
Power Buyers provide brokerages (and their agents and buyers) access to cash offers. Power Buyers, a term coined by global real estate tech strategist Mike DelPrete, “are companies empowering buyers with services like cash offers, bridge financing and trade-in programs.”
Power Buyers have experienced explosive growth, according to zavvie’s Q3 Seller Preferences Report. Ribbon reported that demand for its cash offers had increased tenfold in 2021, while EasyKnock’s Q3 business doubled over Q1 and Knock expanded from three markets at the end of 2019 to 69 markets in 14 states across the country.
As Flyhomes leader Tushar Garg told the Dallas Business Journal when Flyhomes for Agents expanded into Texas, “Every single human being should be able to make a cash offer. That just completely levels the playing field and allows people to compete with the cash offers.”
The best news for real estate brokerages is that Power Buyers want to work with you and your agents. These new players help you create more deals with modern buying/selling solutions, including cash offers and buy-before-you-sell bridge or trade-in programs.
Today, the number of sellers using Power Buyer solutions is growing exponentially. Brokerages love the solution because it solves the “chicken and egg” problem of needing to sell before buying and moving. These new programs help your clients win more deals, save money and close faster. Consumers using these innovative solutions love them, giving them high customer satisfaction ratings.
Does your brokerage offer breakthrough Power Buying options to your clients? If not, what’s your plan to provide them? It is what consumers expect—and will keep agents at the center of every real estate transaction. Learn more about Power Buyers at zavvie.com.
Lane Hornung is CEO/co-founder of zavvie, a software technology company that provides real estate brokerages with a marketplace for buying and selling solutions including Power Buyers via their own white-labeled platform. Hornung is also CEO/founder of 8z Real Estate.