Everything you need to know about Better's Cash Offer program
What You’ll Learn
Key benefits of the Better Cash Offer program
How to participate in the Better Cash Offer program
Who the Better Cash Offer program is a good fit for
Answers to FAQs about the Better Cash Offer program
In a competitive housing market, cash is king. Buyers who can bring liquid capital to the closing table are 4x more likely to win bids on the homes they want. But what if you don’t have the resources to afford an all-cash offer? No sweat. Better Real Estate will buy the home on your behalf so you can move in right away; from there, you’ll be able to finalize your mortgage. Here’s how it works:
How does the Better Cash Offer work?
Step 1: Connect with Better Real Estate
The first thing you’ll need to do if you want to take advantage of the Better Cash Offer program is connect with a Better Real Estate Agent. These in-house agents are hyperlocal, so they can work with buyers to find homes that truly fits their needs; they’re also knowledgeable about coordinating cash offers and can assist with the bidding process.
Step 2: Get mortgage approval
Next, have your mortgage underwritten and pre-approved by Better Mortgage. Getting this done before you place a bid will ensure a smooth transition when the time comes for you to buy back the house from Better Real Estate. Remember—even though you’re making an all-cash offer to the seller, you’ll still be getting a mortgage to finance the purchase of the home. You’ll need to figure out your buying budget and understand how much you can afford.
Step 3: Make your best all-cash offer
Once your mortgage has been fully underwritten and pre-approved, it’s time to determine your bidding amount and submit your all-cash offer. Your Agent can help you navigate this process, but as a cash buyer you’ll have a number of things working to your advantage. For starters, all-cash offers typically have a quicker closing period—the time between when a purchase contract is signed and when the sale is finalized—which is very attractive to sellers, especially in hot markets. The Better Cash Offer program also allows buyers to waive financing and appraisal contingencies, which gives sellers more confidence. Buyers who are also trying to sell their home won’t be stuck having to pay multiple mortgages or adding in a home sale contingency.
Step 4: Move in and buy back your home
After your offer is accepted, Better Real Estate pays cash for the home. You can move in as soon as Better Real Estate closes on the sale, and live there while your mortgage is processed. Once your mortgage is finalized, you can buy back the home from Better Real Estate at the original sale price.
Who is a good candidate for the Better Cash Offer Program?
Buyers who want to win in competitive markets: All-cash offers are 4x more likely to be accepted. If you’ve been in the market for a home for a while and aren’t happy with the results, it might be time to switch up tactics and work with a Better Real Estate Agent. You could have a greater chance of succeeding in hot markets with an all-cash offer.
Buyers who are also selling a home: Buying and selling has always been complicated and stressful for homeowners, but not anymore. The Better Cash Offer program lets you sell on your own timeline, avoid two sets of moves, and strengthen your offer by waiving the home sale contingency. Timing can be a headache for buyers planning to finance their next home purchase with money from their current home sale. But with the Better Cash Offer, you can buy the home you want now and still have 90 days to sell your other home.
Buyers who want to negotiate favorable terms: As a cash buyer, you’ll typically rise above the competition in the eyes of the seller—but you could also have more negotiating power when it comes to the terms of sale. Sellers often make concessions for cash that wouldn’t be on the table with traditional mortgage-based offers. For example, they may be inclined to make requested repairs to the home, or accept a lower cash bid even if a higher non-cash bid is in the mix.
How much does the Better Cash Offer cost?
|When you work with Better Real Estate and Better Mortgage||When you work with Better Real Estate and a lender of your choice|
|Service Fee||1.25% of purchase price||2.5% of purchase price|
|Rental Costs||First 30 days included with Transaction Fee; afterwards, prorated market rate rent, paid when you buy the home back from us||Prorated market rate rent, paid when you buy back the home from us|
If you work with Better Mortgage and Better Real Estate, the Better Cash Offer program has a standard service fee equivalent to 1.25% of your purchase price. If you only work with Better Real Estate and choose to finance your mortgage through a different lender, you will be required to pay a standard service fee equivalent to 2.5% of your purchase price. If you use an external real estate agent that is not affiliated with Better Real Estate but finance your mortgage with Better Mortgage, you will be required to pay a standard service fee equivalent to 2% of your purchase price. If you use a real estate agent of your choice and finance with a lender of your choice, you will be required to pay a standard service fee equivalent to 4% of your purchase price.
Prorated market rate rent
All borrowers are responsible for paying prorated daily rent once Better Real Estate closes on the home. The exact rent price will be determined by market factors including the sale price of the house, and this amount will be due when you buy the home back from Better Real Estate. That way you can avoid making two monthly payments at the same time if you are also selling a current home. You’ll also be responsible for the relevant HOA fees and property taxes on the home that accrue during this time.
Earnest money deposit
Borrowers will need to make an earnest money deposit, also known as a good faith deposit, of 7% when participating in the Better Cash Offer Program. If you are using a Better Real Estate Agent and the purchase of your home is contingent upon the sale of your current residence and/or the purchase price of the home you are buying is greater than $1,000,000, a 10% earnest money deposit is required to use the Better Cash Offer Program. Borrowers working with a Better Real Estate Agent also have the option of paying a reduced service fee of 0.75% by making an earnest money deposit of 20% or paying 0% service fee by making an earnest money deposit of 30%.
Interested in making a Better Cash Offer?
Better Cash Offer terms and conditions apply.
Need more information? Check out these FAQs:
Frequently asked questions about the Better Cash Offer
General information about Better and the Better Cash Offer
Who is Better?
We’re on a mission to make homeownership more accessible and affordable. Our family of companies does this by letting you get a real estate agent ( Better Real Estate), mortgage (Better Mortgage), homeowners insurance (Better Cover), and title insurance (Better Settlement Services) all in one spot with our affiliates.
What are the risks?
Better Mortgage's fast but rigorous underwriting process gets you approved before making a cash offer, so there's risk for you and for us.
Other risks include, but are not limited to: default by the Seller in its sale to Better Real Estate, additional cash due at borrower's closing as due to an appraisal gap (for offers made without an appraisal contingency), and risk of loss of Borrowers' earnest money deposit under certain circumstances. For more detailed information, speak with your Better Real Estate Agent.
Is Better an iBuyer?
No, Better Real Estate buys your home for you with its cash, and then you buy it back at the same terms. Better Real Estate does not buy your existing home like an iBuyer does. Instead, Better’s Cash Offer enables you to buy first and sell your home on your own timeline, at a market competitive rate - for free. iBuyers typically make money by charging a fee and buying your home for less than you would get by listing your home on the market.
Better Cash Offer eligibility and approval
Where is the Better Cash Offer available?
Better Cash Offer is currently available in the following states:
Alabama, Arizona, California, Colorado, District of Columbia, Florida, Georgia, Illinois, Maryland, Michigan, New Jersey, North Carolina, South Carolina, Oregon, Pennsylvania, Texas, Tennessee, Virginia, and Washington.
How do I get approved for the Better Cash Offer program?
You’ll need to be fully underwritten with a verified pre-approval letter before we make a cash offer on your behalf. We use conventional underwriting guidelines to develop a holistic understanding of your financial picture. If you qualify for a mortgage with Better Mortgage, you’ll qualify to be a cash buyer, too. Plus, Better Mortgage accepts down payments starting as low as 7%.
What happens if I get approved for a Cash Offer but don't find a home?
No worries! The verified pre-approval that we give to you lasts for 90 days. We can always refresh the underwriting if it takes longer than 90 days to find you a home.
Am I required to use a Better Real Estate Agent?
No, you are not required to work with a Better Real Estate Agent. However, you are subject to an increased service fee if you use an external agent.
Am I required to use Better Mortgage?
No, you’re not required to use Better Mortgage but you are required to go through the Better Mortgage verified pre-approval process to qualify for the offer. If you ultimately choose to use another lender to fund your loan, you’ll pay a transaction fee equivalent to 2.5% of the purchase price. Keep in mind, Better Mortgage’s rates are highly competitive, and you’ll have already been pre-approved for a mortgage with them to begin with.
What kinds of properties can I use this program on?
The Better Cash Offer may be applied to real estate transactions for Single Family Residences, Condos, and Single-Family Townhomes, for purchase prices between $100,000 - $2,000,000. Primary Residences, Second Homes, and Investment Properties all qualify.
What's the fine print?
See the full Better Cash Offer terms here.
Making a Better Cash Offer
How do I make a Better Cash Offer?
Once you’ve been fully underwritten and received a verified pre-approval letter, you’ll work with your Better Real Estate Agent to request a Cash Offer. Better Real Estate will then enter a sales agreement with the seller if the offer is accepted. Because you will buy the home back from Better Real Estate under the same terms, this is where you’ll decide your offer price and whether you will waive the home inspection contingency and appraisal contingency.
When do I lock my rate for a mortgage?
- If you’re buying only (if you have no current home to sell) - You’ll lock your rate shortly after Better Real Estate buys your home with our cash. That way, we can turn ownership over to you in 30 days.
- If you’re buying and selling (if you also have to sell your current home) - You’ll lock your rate shortly after your old home sells.
Should I include contingencies in my offer?
Contingent offers contain specific terms that must be met before a sale is finalized, such as inspections or appraisals. Contingencies can protect buyers from uncertainty but, especially in this market, sellers usually opt to pick offers with no contingencies because there are fewer risks and they tend to close quicker. If you still want a contingency, your agent can work with you to include one in your purchase contract as necessary. Just be aware that it may reduce the competitiveness of your offer.
Do Better Cash Offers have a financing contingency?
No, that’s the beauty of a cash offer! A financing contingency means that the buyer can back out of the transaction without losing their earnest money deposit if their financing falls through. Better Real Estate buys the home for you with cash, so there’s no need for a financing contingency.
Do Better Cash Offers have an appraisal contingency?
An appraisal contingency means that the buyer can back out of the transaction without losing their earnest money deposit if the property’s appraisal value is below the purchase price. The decision to include or not include an appraisal contingency in the terms of the sale will be yours. Keep in mind that if you waive the appraisal contingency with the original seller, you will also need to waive the appraisal contingency when purchasing back from Better Real Estate. Including the contingency will make your offer less competitive in some markets. If you do waive the appraisal contingency and the appraisal comes in below purchase price, you will be responsible for any changes in the loan terms, including the monthly payment, mortgage insurance, or down payment. If you cannot meet these, you will not be able to purchase the home, but will be refunded your earnest money deposit less the cash offer transaction fee and any transaction related costs.
Do Better Cash Offers have a home inspection contingency?
A home inspection contingency means that the buyer can back out of the transaction without losing their earnest money deposit if they learn about major issues with the home during the inspection. The decision to include or not include a home inspection contingency in the terms of the sale will be yours. Keep in mind that those same terms will carry over and apply when you buy back the home from Better Real Estate. Therefore, if you waive the inspection contingency with the original seller, you will also need to waive the inspection contingency when purchasing back from Better Real Estate. Including the contingency will make your offer less competitive in some markets.
Who are Better Real Estate Agents, and can I shop around until I find one I like?
Absolutely! Better Real Estate Agents are local and vetted, but if you don't click with an agent, that's no problem—we'll work with you to find one who is a fit. We want you to feel confident and comfortable.
What if I'm already working with a real estate agent?
No worries, the Better Cash Offer Program is still available to customers working with external real estate agents.
Do I have to put down an earnest money deposit?
Yes, you will need to make an earnest money deposit (EMD) of 7% to represent your good faith to buy the home. If you are using a Better Real Estate Agent and the purchase of your home is contingent upon the sale of your current residence and/or the purchase price of the home you are buying is greater than $1,000,000, a 10% earnest money deposit is required to use the Better Cash Offer Program. This deposit is not a fee, and will be applied as a credit to your down payment at closing. You are required to make this deposit within 2 calendar days of the seller accepting your offer.
What if my circumstances change and I’m unable to buy the home after Better Real Estate has bought it?
Sometimes the unexpected happens. If circumstances change and you’re unable to buy the home back, you’d forfeit your original deposit of 7% and still be required to pay the relevant rent, HOA fees, and property taxes for the time you occupied the home.
How long will I have to complete my mortgage process and re-purchase the home from Better Real Estate?
- If you’re buying only (if you have no current home to sell) - You will have 30 days from the date of Better Real Estate’s cash closing with the seller to repurchase the home from us. If you haven’t bought back the home within that time frame, you’ll forfeit your earnest money deposit.
- If you’re buying and selling (if you also have to sell your current home) - You will have 90 days from the date of Better Real Estate’s cash closing with the seller to repurchase the home from us. If you haven’t bought back the home within that time frame, you’ll forfeit your earnest money deposit.
What happens if the appraised value of the home comes in lower than the purchase price?
You’ll be subject to changes in your mortgage pricing, depending on the gap in the appraised value and purchase price of the home.
How involved can I be in the offer process? Do I still get to negotiate the terms I want?
You will work with your agent to determine the best offer terms, as normal. The only difference is that Better Real Estate will be submitting the actual offer to the Seller, and Better Real Estate, LLC will be listed on the purchase contract. Prior to offer submission, you will have an opportunity to review the offer, and will be asked to sign a Consent to Offer Letter to give Better Real Estate permission to submit this offer on your behalf.
What if I want to negotiate for repairs after we are under contract with the seller?
No problem. To negotiate for repairs on the home after it’s under contract, you must do so directly with the seller as part of the first purchase transaction. To do so, your Better Real Estate Agent will send the seller an Amendment to the Purchase Contract with Better Real Estate, which you will review and provide signoff on through a Consent to Amendment form.
What if I want to provide the seller with a seller leaseback?
You may provide the seller with a seller leaseback of up to 14 days or your deadline to repurchase the home back from Better Real Estate, whichever occurs first. The maximum duration that Better Real Estate Please note that if you do so, you will still be responsible for the rent, HOA fees and property taxes for the time the seller occupies the home.
Who conducts the final walkthrough of the home prior to closing with the Seller?
You will be responsible for conducting the final walkthrough of the home. If you negotiate any repairs from the Seller, you will be responsible for confirming the completion of such repairs prior to closing.
Got what you need? Take the next step with the Better Cash Offer.