On the heels of laying off nearly a third of its employees, Utah-based flat-fee brokerage Homie has joined the ranks of companies seeking to make it easier for homebuyers to compete with cash offers.
On Tuesday, the brokerage announced the launch of its new Homie Cash program in Southern Nevada. Homie Cash allows buyers working with a Homie agent to make all-cash offers without financing contingencies and close within 21 days. The program’s aim is to give its buyers an edge in the highly competitive housing market where sellers have the upper hand and cash offers are three times more likely to win a bidding war, according to the company.
“I’ve seen too many Southern Nevadans, from first-time homebuyers to empty nesters, lose out on the home they really want because of investors or cash buyers,” said Mike Peregrina, Homie co-founder and president, in a statement.
“That’s why we started Homie Cash to give buyers a leg up on the competition. By upgrading your offer to a cash offer, Homie Cash provides peace of mind knowing you can make a cash offer as soon as you find a home you really want.”
Homie laid off 119 of its 441 employees last week, citing a “changing real estate market.” Only six members of the home loans team at Homie were affected and the company said it would shift gears into making homeownership more accessible for buyers amid an ongoing inventory shortage. With Homie Cash, the company joins the ranks of other “power buyers” offering programs to turn home seekers into cash buyers, such as HomeLight, Evergreen Home Loans, UpEquity, Knock, Homeward, Orchard, Ribbon and Reali.
The Homie Cash program is available in Nevada, Arizona, Utah, Idaho and Colorado and will roll out to more states soon, the company said.
To participate, buyers submit a short application to be pre-approved by the brokerage’s lending arm, Homie Loans, that helps ensure they’re eligible for a conforming mortgage, and then they can start making all-cash offers. Once an offer is accepted, the buyers work with Homie Loans to secure a long-term mortgage and then Homie Loans provides a Homie Cash bridge loan so the buyers can close on their new home and then close on their long-term mortgage.
There are no additional program fees to use Homie Cash, though the company notes, “There are standard third-party closing costs and fees associated with any real estate transaction. Prior to securing your primary mortgage, your Homie Cash loan will accrue interest, prorated daily.”
Buyers can also get up to a $2,500 rebate for closing costs when they bundle Homie services, the company said.
Homie was founded in 2015 and almost immediately made waves for its business model, wherein it charged buyers and sellers a flat fee of $1,500 instead of a commission while still utilizing agents and attorneys who guide customers through the closing process.
The company has expanded to offer home loans, insurance and title services. It has also raised its flat fee to $3,500 for sellers no matter the price of the home (plus a buyer agent commission that the seller decides). If both the buyer and seller are Homie clients, the buyer agent commission is a flat $5,000. Homie will also rebate up to half of the buyer agent commission it receives from sellers to its buyers.
“Homie Cash levels the playing field by allowing buyers that don’t have hundreds of thousands of dollars in their bank accounts to become cash buyers and compete,” Peregrina said.
“Our mission is to make homeownership easy, affordable, and accessible to all. We have saved our customers over $100 million in commissions over the past six years. Now, we’re putting power back into the hands of buyers who face a disadvantage in this intensely competitive market.”
Homie has raised a total of $35.1 million in venture capital throughout its existence, most recently raising $23 million in a Series B round in February 2020, which the company said it planned to use to expand into Las Vegas and two other southwestern markets by the end of that year.
In 2020, the company became the leading real estate brokerage in Utah by transaction value and volume after its revenue soared 150 percent in 2019, Inman reported at the time.