Power Buyer Orchard is expanding its offerings to help first-time homebuyers make cash-backed offers, with Orchard acting at the buyer’s agent and splitting the commission paid by sellers to the listing broker.
New York City-based Orchard is an end-to-end platform providing real estate brokerage, mortgage and title services, helping clients make non-contingent or cash-backed offers and to buy a home before they sell.
Orchard, which has primarily been focused on helping existing homeowners buy a new home before selling their old one with its “Move First” product, has been piloting its new “Buy with Orchard” first-time homebuyer program in five markets in Texas and Colorado.
After expanding into Phoenix, Portland and Seattle last month, Orchard has a presence in 13 markets and plans to offer Buy With Orchard in all of them in coming months. Buy with Orchard is currently available in Denver and four Texas markets — Austin, Dallas-Fort Worth, Houston and San Antonio.
In officially announcing the launch of the new first-time homebuyer product on Tuesday, Orchard cited an estimate by the National Association of Realtors (NAR) that cash buyers accounted for 28 percent of purchases in March.
“It has never been more difficult for first-time buyers to purchase a home,” said Orchard co-founder and CEO Court Cunningham, in a statement. “People are dealing with soaring interest rates and low inventory of affordable homes for sale and competing with equity-rich homeowners and investors vying for the same properties.”
If there are delays in closing, Orchard steps in and buys the home, allowing the client to move in and continue to work on their financing. Once the mortgage is finalized, Orchard sells the home to them at the same price the company paid for it. If finalizing the mortgage takes longer than 30 days, clients pay rent (typically $50 to $100 per day) to cover expenses such as utilities and maintenance.
Orchard is currently advertising more than 40 openings for agents in markets around the country. In employing its own agents, Orchard is similar to Better, in that it seeks to provide end-to-end services, including financing and title insurance.
Some other Power Buyers, including Homeward and Knock, partner with agents and make money by providing the financing. Another Power Buyer, Ribbon, allows homebuyers to work with their preferred real estate agent and lender, charging homebuyers a transaction fee.