How to Start a Cash Offer Program to Find More Sellers

In our webinars, CEO Ryan often talks about cash offer programs being a great way to see who is interested in selling their home. And we usually get some of the following questions:

• “How do I start a cash offer program?”
• “Where do I get the cash for a cash offer?”
• "Do I have to buy these properties myself?"
• “Does Fello fund cash offers?” (No.)

But we can help you with the first three questions and give you some guidance on how to establish a cash offer program for your business. 

Why Homeowners Like Cash Offer/Guaranteed Seller Programs

In essence, these programs provide sellers with a quick, all-cash offer for their property. Accepting a cash offer typically eliminates repairs, showings, negotiations, financing issues, and usually accelerates the closing process.

While some sellers are motivated by getting the most money for their home, others just want to get it over with or need to move quickly. 

You can see how a cash offer — while sometimes less than a traditional sale price — has some powerful motivation behind it. 

5 Ways to Start Your Cash Offer Program

And none of these solutions include you buying the property. 

1. Partner with an iBuying company that specializes in residential real estate. Cash offer companies have the financing specifically to buy homes and they know what they’re doing. Plus, you can usually white-label their offering to your brand. Not all iBuying companies operate in every market. These are some of the most popular, and many brokerages also have a cash offer arm. Some companies to check out:
   
   • Homeward
   • OpenDoor
   • Offerpad
   • There are probably cash offer companies that specialize in your specific state or market, like these Ohio iBuying companies, where Fello is headquartered.
2. Build a "buy box" of real estate investors looking for cash opportunities. Get on your MLS, focus on areas with duplexes or rentals, find the properties that transacted in cash (some MLS have this filter), and see which properties are owned by an LLC. These are real estate investors, or "flippers." Look up the LLC and you'll generally find ownership names and contact info. Reach out with your script: "I see you own a few properties in the area. If I come across an opportunity that wants a cash offer to move quickly, potentially below market, would you be willing to make an offer?" These investors become your "buy box": You help them sell renovated properties — and sell them new ones for cash.
   
   
3. Create mutually beneficial cash flow with luxury rentals. If you work in a luxury market, there are probably not many flippers — but there are investors with portfolios of luxury vacation rentals. Find the owners via county data or Vrbo and present your script: "If I can you opportunities below market value so you can expand your portfolio, would you be comfortable making a cash offer on a property before it goes to market?" These luxury rental investors are now backstopping your cash offer program. 
   
   
4. Establish a worry-free listing program, which usually includes these four components or options to eliminate any seller's concerns. 
   
   • Flexible commission packages to meet the seller's budget and needs
   • If the homeowner sells the home themselves, they pay you nothing 
   • The seller can accept an instant cash offer
   • The homeowner can cancel the agreement at any time 
5. Set up a guaranteed offer program, which is a combination of a cash offer and a traditional listing. Homeowners are given a guaranteed cash offer, and at the same time, the property is listed on the market. The dual approach lets homeowners test the market to see if they can get a higher price from a traditional buyer while having the security of a guaranteed cash offer from an iBuyer or investor. 

Regardless of which direction makes the most sense for your business, to ensure the program is successful, market the program (this is where Fello can make a major impact), train your team (or yourself), and add the details of the cash offer program into your listing presentation.

— — —  

"38% of the people that were requesting a cash offer were actually going to market within 12 months."

CEO Ryan is also a REALTOR® and leads The Young Team. They started their cash offer program several years ago, and one thing their data quickly showed was that 38% of homeowners who requested a cash offer eventually went on to traditionally list their homes with them — within 12 months. Less than 2% of people who requested a cash offer actually accepted it. 

This is how a cash offer program helps you find the hand-raisers. The people requesting a cash offer are motivated to sell and might want to move faster than you think.

Two Other Things You Should Know

1) Fello can automate the marketing of your entire cash offer program! Find out more by scheduling a personalized demo or contacting your Customer Success Manager (you can also email success@hifello.com). 

In short, Fello's Smart Content and Smart Automations use powerful AI to deliver dynamically optimized cash offer messaging for postcard and email campaigns. We are so excited to launch this feature, as it is the first and only solution of its kind in the industry. This means messages are constantly optimized for better deliverability, more opens, more clicks, and more scans while the marketing campaign runs. You just have to set it, forget it, and let the leads roll in. Read all about how it works HERE.

2) We hosted a webinar with Tim Heyl, REALTOR® and CEO/Founder of iBuyer, Homeward as part of our May 2024 30-Day Listing Challenge. You can watch the webinar here where Tim outlined how Homeward works, and how a cash offer program can help generate more seller leads.