A new product launched by real estate brokerage FlyHomes is designed to help clients compete with the all-cash offers that have become typical in hot housing markets, like Seattle.
Dubbed “Guaranteed Offers,” FlyHomes will add an addendum letter to the offer contract of pre-approved, qualifying clients ensuring that the brokerage will purchase the home if the deal isn’t closed by the agreed upon deadline. According to GeekWire, FlyHomes created the program to give sellers more certainty that selling to one of the company’s clients will be as reliable as an all-cash offer. CEO Stephen Lane said that could even mean more.
“We think it’s really unfair that sellers will choose an all-cash offer over the 98 percent of homes that are going to close, and therefore we’re taking the risk for that uncertainty.”
According to the report, FlyHomes has secured a $2 million credit facility, which will provide the capital to purchase the homes. If a deal doesn’t go through, FlyHomes will buy the home for the agreed upon price and then sell it.
Lane said he expects the number of homes purchased will be low.
“While we can’t know for sure until we hit a certain volume, we’re building this program to increase certainty for our clients and for sellers.”
The program is similar to similar offerings from Redfin and Zillow. Customers who opt-in to Redfin Now can sell their homes directly to the brokerage, typically earning a little less cash but selling faster with less risk.
The company is based in Seattle and its services are also available in the Bay Area, Chicago, and Boston.
Lane noted that FlyHomes is partnering with Better Mortgage to make the last-minute home purchases associated with Guaranteed Offers feasible.
“Historically, mortgage companies and real estate brokers have made a ton of money off of buyers and sellers, but when something goes wrong in closing, both sides have walked away scratch free, and it’s the buyer and seller that really lose. We’re excited to actually stand behind our clients, so that if something goes wrong, the seller won’t lose.”
