Everything you need to know about Better's Cash Offer program

Published August 16, 2021
Better
by Better

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What You’ll Learn

Key benefits of the Better Cash Offer program

How to participate in the Better Cash Offer program

Who the Better Cash Offer program is a good fit for

Answers to FAQs about the Better Cash Offer program



In a competitive housing market, cash is king. Buyers who can bring liquid capital to the closing table are 4x more likely to win bids on the homes they want. But what if you don’t have the resources to afford an all-cash offer? No sweat. Better Real Estate will buy the home on your behalf so you can move in right away; from there, you’ll be able to finalize your mortgage. Here’s how it works:

How does the Better Cash Offer work?

Step 1: Connect with Better Real Estate

The first thing you’ll need to do if you want to take advantage of the Better Cash Offer program is connect with a Better Real Estate Agent. These in-house agents are hyperlocal, so they can work with buyers to find homes that truly fits their needs; they’re also knowledgeable about coordinating cash offers and can assist with the bidding process.

Step 2: Get mortgage approval

Next, have your mortgage underwritten and pre-approved by Better Mortgage. Getting this done before you place a bid will ensure a smooth transition when the time comes for you to buy back the house from Better Real Estate. Remember—even though you’re making an all-cash offer to the seller, you’ll still be getting a mortgage to finance the purchase of the home. You’ll need to figure out your buying budget and understand how much you can afford.

Step 3: Make your best all-cash offer

Once your mortgage has been fully underwritten and pre-approved, it’s time to determine your bidding amount and submit your all-cash offer. Your Agent can help you navigate this process, but as a cash buyer you’ll have a number of things working to your advantage. For starters, all-cash offers typically have a quicker closing period—the time between when a purchase contract is signed and when the sale is finalized—which is very attractive to sellers, especially in hot markets. The Better Cash Offer program also allows buyers to waive financing and appraisal contingencies, which gives sellers more confidence. Buyers who are also trying to sell their home won’t be stuck having to pay multiple mortgages or adding in a home sale contingency.

Step 4: Move in and buy back your home

After your offer is accepted, Better Real Estate pays cash for the home. You can move in as soon as Better Real Estate closes on the sale, and live there while your mortgage is processed. Once your mortgage is finalized, you can buy back the home from Better Real Estate at the original sale price.

Who is a good candidate for the Better Cash Offer Program?

  1. Buyers who want to win in competitive markets: All-cash offers are 4x more likely to be accepted. If you’ve been in the market for a home for a while and aren’t happy with the results, it might be time to switch up tactics and work with a Better Real Estate Agent. You could have a greater chance of succeeding in hot markets with an all-cash offer.

  2. Buyers who are also selling a home: Buying and selling has always been complicated and stressful for homeowners, but not anymore. The Better Cash Offer program lets you sell on your own timeline, avoid two sets of moves, and strengthen your offer by waiving the home sale contingency. Timing can be a headache for buyers planning to finance their next home purchase with money from their current home sale. But with the Better Cash Offer, you can buy the home you want now and still have 180 days to sell your other home.

  3. Buyers who want to negotiate favorable terms: As a cash buyer, you’ll typically rise above the competition in the eyes of the seller—but you could also have more negotiating power when it comes to the terms of sale. Sellers often make concessions for cash that wouldn’t be on the table with traditional mortgage-based offers. For example, they may be inclined to make requested repairs to the home, or accept a lower cash bid even if a higher non-cash bid is in the mix.

How much does the Better Cash Offer cost?

When you work with Better Real Estate and Better Mortgage When you work with Better Real Estate and a lender of your choice
Transaction Fee Free 2.5% of purchase price
Discounts 1% rebate of the purchase price of your home (i.e. $3,000 on a $300,000 home)¹

$2,000 off your closing costs²
None
Rental Costs Prorated market rate rent, paid when you buy back the home from us Prorated market rate rent, paid when you buy back the home from us

Program fees

If you work with Better Mortgage and Better Real Estate, the Better Cash Offer program is free—meaning you pay zero fees for participating. By working with both Better Mortgage and Better Real Estate, you’ll also be eligible for discounts including a 1% agent rebate¹ and $2k off closing costs². If you only work with Better Real Estate and choose to finance your mortgage through a different lender, you will be required to pay a standard transaction fee equivalent to 2.5% of your purchase price. You won’t qualify for any closing cost discounts.

Prorated market rate rent

All borrowers are responsible for paying prorated daily rent once Better Real Estate closes on the home. The exact rent price will be determined by market factors including the sale price of the house, and this amount will be due when you buy the home back from Better Real Estate. That way you can avoid making two monthly payments at the same time if you are also selling a current home. You’ll also be responsible for the relevant HOA fees and property taxes on the home that accrue during this time.

Earnest money deposit

Borrowers will need to make an earnest money deposit, also known as a good faith deposit, of 5% when participating in the Better Cash Offer program. This deposit is paid once the seller accepts the Better Cash Offer and Better Real Estate is under contract with the seller. It is not a fee, and will be applied as a credit to your down payment at closing.

Interested in making a Better Cash Offer?








Need more information? Check out these FAQs:

Frequently asked questions about the Better Cash Offer

General information about Better and the Better Cash Offer

Who is Better?
We’re on a mission to make homeownership more accessible and affordable. Our family of companies does this by letting you get a real estate agent ( Better Real Estate), mortgage (Better Mortgage), homeowners insurance (Better Cover), and title insurance (Better Settlement Services) all in one spot with our affiliates.

How can this be free with Better Mortgage?
Better Mortgage makes money from mortgage investors, not buyers. Cash offers are 4x more likely to be accepted, and by helping customers become cash buyers, we’re able to close more mortgages. The more mortgages we close, the more revenue we pull in, which is how we’re able to offer this program at no cost to our borrowers.

What are the risks?
Better Mortgage’s fast but rigorous underwriting process gets you approved before making a cash offer, so there’s less risk for you and for us.

Is Better an iBuyer?
No, Better Real Estate buys your home for you with its cash, and then you buy it back at the same terms. Better Real Estate does not buy your existing home like an iBuyer does. Instead, Better’s Cash Offer enables you to buy first and sell your home on your own timeline, at a market competitive rate - for free. iBuyers typically make money by charging a fee and buying your home for less than you would get by listing your home on the market.

Better Cash Offer eligibility and approval

Where is the Better Cash Offer available?
We are rapidly expanding to new cities. Our cash offers are currently available to buyers in the following markets:

  • Texas: Austin, Dallas, Houston, San Antonio
  • Florida: Fort Lauderdale, Jacksonville, Miami, Orlando, Palm Beach, Tampa
  • Georgia: Atlanta
  • Colorado: Denver
  • New Jersey: Ocean County, Essex County, Middlesex County, Bergen County, Hudson County, Union County, Monmouth County, Passaic County, Burlington County, Camden County, Mercer County, Morris County, Somerset County, Gloucester County, Sussex County, Hunterdon County
  • Washington: Seattle
  • Pennsylvania: Philadelphia, Pittsburgh
  • Arizona: Phoenix

How do I get approved for the Better Cash Offer program?
You’ll need to be fully underwritten with a verified pre-approval letter before we make a cash offer on your behalf. We use conventional underwriting guidelines to develop a holistic understanding of your financial picture. If you qualify for a mortgage with Better Mortgage, you’ll qualify to be a cash buyer, too. Plus, Better Mortgage accepts down payments starting as low as 5%.

What happens if I get approved for a Cash Offer but don't find a home?
No worries! The verified pre-approval that we give to you lasts for 90 days. We can always refresh the underwriting if it takes longer than 90 days to find you a home.

Am I required to use a Better Real Estate Agent?
Yes, you’ll need to use a Better Real Estate Agent in a market where we offer Cash Offers to be eligible for this program. It’s part of how we’re able to make the program possible.

Am I required to use Better Mortgage?
No, you’re not required to use Better Mortgage but you are required to go through the Better Mortgage verified pre-approval process to qualify for the offer. If you ultimately choose to use another lender to fund your loan, you’ll pay a transaction fee equivalent to 2.5% of the purchase price. Keep in mind, Better Mortgage’s rates are highly competitive, and you’ll have already been pre-approved for a mortgage with them to begin with.

What kinds of properties can I use this program on?
The only property type eligible for purchase through this program is single family residence (no townhomes, condos, or new construction) and the property must be a primary home (no investment properties or second homes.)

What's the fine print?
See the full Better Cash Offer terms here.

Making a Better Cash Offer

How do I make a Better Cash Offer?
Once you’ve been fully underwritten and received a verified pre-approval letter, you’ll work with your Better Real Estate Agent to request a Cash Offer. Better Real Estate will then enter a sales agreement with the seller if the offer is accepted. Because you will buy the home back from Better Real Estate under the same terms, this is where you’ll decide your offer price and whether you will waive the home inspection contingency and appraisal contingency. Better Cash Offers have no appraisal contingency if you use Better Mortgage and make a 10% down payment. If the appraisal comes in low, we guarantee we will fund your home loan at the same terms*.

When do I lock my rate for a mortgage?

  • If you’re buying only (if you have no current home to sell) - You’ll lock your rate shortly after Better Real Estate buys your home with our cash. That way, we can turn ownership over to you in 30 days.
  • If you’re buying and selling (if you also have to sell your current home) - You’ll lock your rate shortly after your old home sells.

Should I include contingencies in my offer?
Contingent offers contain specific terms that must be met before a sale is finalized, such as inspections or appraisals. Contingencies can protect buyers from uncertainty but, especially in this market, sellers usually opt to pick offers with no contingencies because there are fewer risks and they tend to close quicker. If you still want a contingency, your agent can work with you to include one in your purchase contract as necessary. Just be aware that it may reduce the competitiveness of your offer.

Do Better Cash Offers have a financing contingency?
No, that’s the beauty of a cash offer! A financing contingency means that the buyer can back out of the transaction without losing their earnest money deposit if their financing falls through. Better Real Estate buys the home for you with cash, so there’s no need for a financing contingency.

Do Better Cash Offers have an appraisal contingency?
An appraisal contingency means that the buyer can back out of the transaction without losing their earnest money deposit if an appraiser determines that the home is worth less than the offer price. Better Cash Offers have no appraisal contingency if you use Better Mortgage and make a 10% down payment, thanks to our Appraisal Guarantee*. The guarantee means that if your appraisal comes in low, we guarantee to fund your home loan at the same terms. If you do not plan on making a 10% down payment or using Better Mortgage, it is your decision whether to include an appraisal contingency. Therefore, if you waive the appraisal contingency with the original seller, you will also need to waive the inspection contingency when purchasing back from Better Real Estate.

Do Better Cash Offers have a home inspection contingency?
A home inspection contingency means that the buyer can back out of the transaction without losing their earnest money deposit if they learn about major issues with the home during the inspection. The decision to include or not include a home inspection contingency in the terms of the sale will be yours. Keep in mind that those same terms will carry over and apply when you buy back the home from Better Real Estate. Therefore, if you waive the inspection contingency with the original seller, you will also need to waive the inspection contingency when purchasing back from Better Real Estate. Including the contingency will make your offer less competitive in some markets.

Who are Better Real Estate Agents, and can I shop around until I find one I like?
Absolutely! Better Real Estate Agents are local and vetted, but if you don't click with an agent, that's no problem—we'll work with you to find one who is a fit. We want you to feel confident and comfortable.

What if I'm already working with a real estate agent?
As long as you haven’t signed an exclusivity agreement with your current agent, you’re free to cut ties at any time.

Do I have to put down an earnest money deposit?
Yes, you will need to make an earnest money deposit (EMD) of 5% to represent your good faith to buy the home. This deposit is not a fee, and will be applied as a credit to your down payment at closing. You are required to make this deposit within 2 calendar days of the seller accepting your offer.

What if my circumstances change and I’m unable to buy the home after Better Real Estate has bought it?
Sometimes the unexpected happens. If circumstances change and you’re unable to buy the home back, you’d forfeit your original deposit of 5% and still be required to pay the relevant rent, HOA fees, and property taxes for the time you occupied the home.

How long will I have to complete my mortgage process and re-purchase the home from Better Real Estate?

  • If you’re buying only (if you have no current home to sell) - You will have 30 days from the date of Better Real Estate’s cash closing with the seller to repurchase the home from us. If you haven’t bought back the home within that time frame, you’ll forfeit your earnest money deposit.
  • If you’re buying and selling (if you also have to sell your current home) - You will have 180 days from the date of Better Real Estate’s cash closing with the seller to repurchase the home from us. If you haven’t bought back the home within that time frame, you’ll forfeit your earnest money deposit.

What happens if the appraised value of the home comes in lower than the purchase price?

  • If you’re using Better Mortgage to fund your mortgage, you may qualify for their Appraisal Guarantee. If that’s the case, Better Mortgage will fund your loan at the same terms regardless of appraisal valuation.*
  • If you’re using another lender, you’ll be subject to changes in your mortgage pricing, depending on the gap in the appraised value and purchase price of the home.

How involved can I be in the offer process? Do I still get to negotiate the terms I want?
You will work with your agent to determine the best offer terms, as normal. The only difference is that Better Real Estate will be submitting the actual offer to the Seller, and Better Real Estate, LLC will be listed on the purchase contract. Prior to offer submission, you will have an opportunity to review the offer, and will be asked to sign a Consent to Offer Letter to give Better Real Estate permission to submit this offer on your behalf.

What if I want to negotiate for repairs after we are under contract with the seller?
No problem. To negotiate for repairs on the home after it’s under contract, you must do so directly with the seller as part of the first purchase transaction. To do so, your Better Real Estate Agent will send the seller an Amendment to the Purchase Contract with Better Real Estate, which you will review and provide signoff on through a Consent to Amendment form.

What if I want to provide the seller with a seller leaseback?
You may provide the seller with a seller leaseback of up to your deadline to repurchase the home back from Better Real Estate (30 days if you’re only buying a home and 180 days if you’re buying a new home and selling your current home). Please note that if you do so, you will still be responsible for the rent, HOA fees and property taxes for the time the seller occupies the home.

Who conducts the final walkthrough of the home prior to closing with the Seller?
You will be responsible for conducting the final walkthrough of the home. If you negotiate any repairs from the Seller, you will be responsible for confirming the completion of such repairs prior to closing.



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