iBuying Bidding Wars, Rising Mortgage Rates, and Digital Business Development

iBuying firm Opendoor helps buyers make cash-backed offers to improve chances in a bidding war

  • To participate, buyers will have to get prequalified with Opendoor Residence Loans or another mortgage firm. 
  • Opendoor will then pair the client with a real estate professional affiliated with the company, who will review their offer for a home before submitting it to the seller. 
  • The company will back the buyer’s offer with cash, allowing buyers to submit an offer free of financing, appraisal, or home sale contingencies.
  •  Opendoor promises the seller that it will buy the home with cash if the client is unable to get financing.


Rising Mortgage Rates Could Erase Home Buyers’ Increased Spending Power

  • A new report by Redfin helps consumers understand what the steady climb of mortgage rates means for buyers who have been sitting on the fence waiting for a lower rate to roll around.
  • A home buyer would lose $23,250 in spending power with a mortgage rate of 3.25% versus a 2.75% rate, where they were sitting earlier this year.
  • At 3.25% interest rate, a buyer can afford a $506,000 home for $2,500 per month, down from the $529,250 they could afford on the same budget with a 2.75% rate.
  • Additionally, inflation may change the aspect of home buyers’ finances: It could change earnings, change budgets and even change mortgage rates.
  • If you go to Freddiemac.com you will see mortgage rates and how that have changed since 1970.


You’re behind If You Are Not Conducting Business Digitally

  • Due to the pandemic, the real estate industry quickly adjusted to digital-first.
  • According to a May 2020 study from the National Association of Realtors (NAR), 41% of buyers said they could envision buying a home without ever physically stepping inside.
  • 70% of buyers and 67% of sellers said they were comfortable with conducting all business on a computer
  • 62% of buyers believe it is essential that an agent/broker be knowledgeable about ways to electronically sign some or all closing documents.


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