Nick Friedman Co-Founder of Accept.inc | The ”Rich Uncle” of the Real Estate Industry

This week the team talks with Co-founder and COO of accept.inc, Nick Friedman

Zoodealio is now partnered with accept.inc to upgrade buyer offers to cash! We are very excited about this new and powerful partnership and it is our pleasure to have the opportunity to have Nick join us this week!

The conversation begins with Nick explaining what accept.inc is.

We are basically a mortgage company that upgrades any offer to a cash offer. We purchase homes for buyers who we predict will secure a mortgage, then we sell the home to them at the same price we purchased it for. We basically become the buyer’s rich aunt or uncle who buy the home for them.

We began the company by looking at what is real estate today and how can it be fixed, what would we do differently if WE could do it all over again. What is the simplest transaction and how can we give that to every buyer and seller? It didn’t take long to figure out this is a cash offer. Now how do you give the cash offer to everybody?

We had no real estate background or experience at the beginning. We failed for a couple of years and learned every way to NOT make someone a cash buyer, but the lack of experience played to our strength … We went in and said “Hey we’re just going to go in there with the bat and see what we can hit!” By not being jaded by the industry going in we were ablate figure out that this is the model we want to have, this is a model that is appealing to buyers, sellers and agents today.

Next he expanded on their value proposition and explained how they gained agent mind-share. Looking at the Denver market, it’s a great place to live and we ended up picking a market the really grabbed on to this model quickly. Our value proposition is not you all can have a rich aunt or uncle … that appeals not only to buyers and sellers, but also to real estate agents. We market to agents and they are able to tell their sellers to not settle for anything other than a cash offer and they tell their buyers to not submit anything less than a cash offer.

What's the catch?! There isn’t one, we explain to them exactly where we are making our money. We are a mortgage company add we have an in-house title company, so we make money there as well. Those are standard across the industry. Today even mortgage company and every title company make money. People do get a little confused when we layer on that were are a cash offer company that allows you to upgrade your offer to cash, so the question becomes how can you do all of that and still keep rates competitive? We let them know that tour marketing costs are very low and we don’t pay commission to our loan officers, they are on salary and the savings on commissions basically offset to costs of floating the home. Finally we are only holding the home for a week or two so there really isn’t any carrying cost. In this crazy market it makes sense to want to be a cash buyer, but why would a buyer want or need to be a cash buyer in a slower market? Simply the negotiating power that comes with a cash offer is key in answering this. Say you come to the table with cash and a quick close, ask for a $30k to $40k price reduction, the house has been on the market for 45 days and not been busy - the seller doesn’t want this deal to fall through.

What happens when something goers sideways? Things don’t come up often, but sometimes they do. We only own the home for a short time, so it’s pretty rare that we experience things like a burst pipe or something while we own it. We haven’t had any transactions fall out, meaning that the person we bought the home for ultimately purchased it from us. We have had some appraisals come in low, but that is the risk we taken ourselves and we take the loss. When an appraisal comes in low we actually lower the price and sell it to the buyer, we are willing to take that because we believe our offer needs to be a “true cash offer” and in order to do that we need to take on the risk of the home and the risk of the buyer.

An obvious question in the current makers in AZ and CO is do you let buyers overpay for a home? We do an internal value check which is what we feel the home will appraise for. Our value check is also a guarantee that we will fund that loan for up to that amount, if the appraisal comes in low we take the loss. The buyer can agree ahead of time to pay more in cash if they want to offer over the value check number, but we would have to verify those funds before the offer.

It does take a few days for the buyer to get the cash approval. It takes 3-4 business days to get it done. If a buyer finds a home immediately and they want to put in a cash offer in five minutes, that is just not going to happen. If they come to us a week or so ahead and let us know they are going be looking for a home, if they bring us everything on a Monday by the weekend they can be a cash buyer.

How are agents prospecting with this product? Listing agents pitch in the listing appointment that they will make sure that any offers that come in will be upgraded to cash. On the buy side they are telling people they can use their negotiating skills as na agent with a cash offer and you the buyer can win your first or second offer usually. Buyer’s agents use their use cases to help market themselves and this service, using testimonials from prior clients, the critical mass on that is about 3 transactions with us.

If you are listening to this in Arizona or Colorado Zoodealio has this available for you! And if you are a current subscriber you already have it and we will have it available in your back end soon!