Our CashPlus program can be a valuable resource for buyers in competitive markets. This article outlines why it’s important, how the program works, the benefits, and the requirements for using CashPlus.
When purchasing a home, cash, as the cliche goes, is king.
While most people will purchase a home with a mortgage, buyers that can make a cash purchase hold a strong advantage. They can move faster with a purchase, they can be more flexible with price (assuming they have the cash), and they can, within reason, dictate the terms of the purchase. (This, mind you, is coming from a mortgage professional!)
In particular, cash offers don’t have to go through the time-consuming approval process. Sellers often choose cash offers over purchase offers linked to a loan because they know that a cash offer, with proof of funds, has far fewer stumbling blocks. Simply put, it’s more likely to close than an offer based on a loan.
Not everyone has the cash on hand to buy a home without a loan, which is why cash offers are rare. Few have the hundreds of thousands of dollars, let alone the millions, to make a cash purchase.
But what if you could get some of the benefits of a cash offer without actually having the cash on hand?
With the CashPlus program, you can.
How the CashPlus Program Works
With the CashPlus program, the lending institution essentially guarantees (with one important contingency) that if the loan is unable to close within a certain time, they will purchase the property on the buyer’s behalf. It’s really that simple; if you (the buyer) can’t complete the loan in time, the company will purchase the property and, at some point, you will buy it from the organization.
Think about it from a seller’s perspective. When someone comes to you with a purchase offer backed by CashPlus, you are all but guaranteed to complete the sale. You really don’t care whether the purchase goes to the individual homebuyer or the lending institution, as long as the home is sold and you are paid, you remain happy.
The CashPlus program, which is offered through our organization and powered by Ribbon, gives you the opportunity to essentially make a cash offer when purchasing your home. This is accomplished through a simple addendum in the sale contract that states if the loan does not close by the specific closing date, which is described in the sale contract, Ribbon will step in and purchase the property. This ensures the sale is completed on time, a major benefit for all sellers.
If the organization has to step in and purchase the property, you have six months to complete financing and purchase the property. In the meantime, you are completely able to move into the house and enjoy your new home.
Benefits of the CashPlus Program
The benefits of the CashPlus program are numerous. But it essentially comes down to giving buyers the chance to make an offer that is as good as cash. In fact, in many ways it’s better than cash because once the inspection period passes, the organization will guarantee the property will be purchased. This makes it better than cash because with a cash offer, the buyer can actually walk away whenever they want; the only penalty would be loosing their earnest money.
Selling a home for the best possible price is usually the most important factor for sellers. But the speed of a sale is also critical. With an offer supported by CashPlus, buyers can make an offer that is free of common contingencies like financing and the appraisal. The financing process, of course, can take time. You need to gather documents and finalize the details, while an appraisal needs to be scheduled and completed, which can add weeks to the sale process. Even if an appraisal is completed quickly, there’s always the chance that a low appraisal could disrupt the sale, adding even more complications.
Real estate agents also like working with this program. Unlike other cash offer programs, the agent does not have to wait to get paid on the original closing date. Regardless of whether or not ribbon has to step in and purchase the home. No matter what happens, the agent will get paid on the sale, so they have a strong incentive to help move the purchase forward.
Requirements for Using the CashPlus Program
To use our CashPlus program, there are a few requirements you and the property will need to meet. First, the property you are purchasing must be in a major metropolitan area in an approved state. (Contact our team for a list of approved areas.)
The biggest requirement is a home inspection. Because there is a chance that the organization may have to purchase the property, an inspection will be required. Assuming the inspection does not find any major issues, the purchase can likely move forward. All in all, this is basically the biggest (and only) potential roadblock for the CashPlus program.
The purchase price (not the loan amount) must be between $150,000 and $1 million. At this range, most homes in reasonable areas will be eligible for the CashPlus option.
The program is for primary residences only. It can’t be used for secondary homes, vacation getaways, or investment properties.
You’ll have to work with a real estate agent if you are going to use the CashPlus program. This won’t impact most buyers, but it could be a factor if you prefer to go through the purchase process without professional support.
Also, the attorney or title company overseeing the transaction will need to be approved by the company. Most will be approved, so it’s unlikely this will become an issue. The attorney or title company will be selected by the real estate agent.
That’s about all for requirements. In total, this is an accessible program that gives buyers the advantage of a cash offer, even if they don’t have the cash on hand.
Get the Benefits of a Cash Offer for Your Next Purchase
Want to gain the benefits of a cash offer? Contact our team and apply for the CashPlus program today. Whether you are purchasing you first home or moving into a retirement condo, we’re proud to help with all your mortgage needs!
