Real estate tech firm forges ahead with power buyer program
The software company zavvie has introduced its cash offer and buy-before-you-sell products to brokerages in 11 states, with plans to expand later this year.
- Brokerages that offer mortgage services will see the greatest benefit from zavvie's products.
- In a challenging market, "you need to offer every selling and buying solution available because that’s what consumers are demanding," said broker Alan Smith.
- The cash offer is particularly attractive to first-time homebuyers as they compete in what’s expected to be an ongoing low-inventory environment.
After a successful trial run of its power buyer product, the software technology startup zavvie is moving forward with brokerage partnerships across the U.S.
Brokerages in 11 states and Washington, D.C., are eligible to partner with the tech company and implement its zavvie Power Buyer offering. The company plans to add another four or five states later this year, said Maya Velasquez, vice president of sales at zavvie.
The product, which went through a soft-launch phase last year, includes both cash offer and buy-before-you-sell financing options that can be connected with the brokerage's preferred or in-house lender — something that is needed in today's market, Velasquez said.
"The power buyer options allow the perfect conversation catalyst to get people excited about transacting in this market again," Velasquez said in an email. Both buyers and sellers have been hesitant to act given higher mortgage interest rates, but alternative financing could provide some incentive.
The buy-before-you-sell option is popular with sellers, as it can help them bridge the gap between their sale and purchase. And for buyers, interest in cash offers is growing as agents and loan officers look for ways to eliminate financing contingency issues.
"Cash is always king and queen in real estate," said Stefan Peterson, chief data officer and co-founder of zavvie. "And with cash offers, agents can help their clients win more deals, especially for first-time homebuyers."
"Research shows how cash offers have surged, with about one in three transactions being all cash," said Frank Gay, principal and CEO of Home Pros Family of Companies in El Paso, Texas, which uses the zavvie platform. "Helping first-time buyers be able to make an offer that is equivalent to cash is a win for everyone."
Unlike some power buyer companies, zavvie has not ended up owning any unplanned homes. Power buyers can accumulate homes if they offer a buy-before-you-sell product that guarantees the company will purchase the seller's home if it doesn't sell within a set period of time. But zavvie uses a specific due diligence process that ensures clients, agents and loan officers are on the same page, Velasquez said.
Zavvie's program may not be a fit for all brokerages, said Lane Hornung, the company's CEO and co-founder, who noted that the power buyer product works best for firms that offer mortgage services. Brokerages who partner with zavvie are still free to present their clients with similar products from other companies. "Our program is designed to be complimentary, not competitive," said Hornung.
Brokerages that have begun using the platform are reporting positive results. "Immediately empowering buyers with Cash Offers, or sellers with a Buy Before You Sell solution, can create more transactions and open up more inventory," said Christina Pappas, president of The Keyes Company, an independent brokerage with more than 50 offices in Florida.
"As a bonus, adding our in-house mortgage company as the 'go to' for all solutions — traditional and modern — has increased our capture rate," said Pappas.
Alan Smith, owner of RE/MAX Professionals in Colorado, agreed that innovative offerings can attract clients and help agents close deals. "You need to offer every selling and buying solution available today because that's what consumers are demanding," Smith said.