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William Raveis Inc. has launched a new service it says will help buyers compete with all-cash offers in an incredibly tight real estate market.
The Connecticut-based company’s Raveis CashBid program is based off its iBuyer-like Raveis Purchase product, which launched earlier this year. Instead of acquiring a home for up to 80 percent of its current value, as Raveis Purchas does, the company uses the same architecture to make a cash offer on a for-sale home on a buyer’s behalf. The buyer then finances a mortgage via the company’s William Raveis Mortgage arm and buys the property from Raveis Purchase.
The buyer must first pre-qualify for a loan with Raveis Mortgage, giving the deal a solid financial foundation.
“We have a certain level of certainty they will be able to get a mortgage – it’s just a matter of time in gathering the documents and getting it finalized,” Co-President Ryan Raveis told Banker & Tradesman.
The company charges the buyer a minimum 2 percent fee for use of the capital, but every deal is “custom,” Raveis said, with the buyer and Raveis being able to negotiate add-ons like waiving an appraisal or renting the home back to the buyer while the loan closes, letting them move in early, freeing up their existing home to sell and provide them with a down payment.
That desire to bring more homes onto a market desperately starved for product motivated the new program, Raveis said.
“When you have inventory that’s down 30 or 40 percent in some markets, that’s frozen. You have to chip away at that,” he said. “There’s a halo effect by executing one of these deals that opens up inventory.”
The company plans to offer its services to a wide range of customers, he said. Raveis has 44 Massachusetts brokerages from East Longmeadow to Provincetown.
“We can serve the higher end and we have jumbo investors who can help with this, but it’s not specific to any demographic or geography. Whether it’s for the multi-million-dollar homes we’re selling in Nantucket or the suburbs of Boston or something at a much lower pricepoint,” Raveis said.
Overall, Raveis estimated the company hopes to do up to 10 percent of the $20 billion worth of transactions its brokerage arm handles every year across the Northeast and Florida with the Ravies CashBid program.
The move is part of the company’s overall effort to transition away from a siloed organization with separate mortgage, insurance and real estate brokerage operations, Raveis said, and leverage the work the company is doing already.
“With interest rates this low there’s a lot of loose capital out there and there are some fly-by-night models, but we’re a second-generation, family–owned company and this shows how responsive we can be to the marketplace,” Raveis said.
