How to stand out in the Triangle housing market

Perhaps the moment hit when you realized you wanted a home office instead of a desk in the living room. Maybe the rent spiked again or your landlord decided to sell. The question lingering in your mind says, “What if I had my own home?”

You quickly shove the thought away, thinking it isn’t a desire a 20- or 30-something-year-old can afford in this economy. Think again.  

While jumping into the Triangle housing market might seem daunting, it is not something to be feared when you have the right resources and trusted partnership. According to the National Association of Realtors’ Profile of Home Buyers and Sellers in 2022, first-time buyers made up only 26% of all homebuyers, down from last year's 34% and the lowest share of first-time buyers over the last four decades. With so many first-time homebuyers being pushed out of the market, the question becomes “why?” Sellers are drawn toward the most attractive offer – not only the purchase price, but those without the many common contingencies that increase risk of a sale falling through or adding time to the closing process. 

“The path to ownership is harder because you just have so many more competitors out there,” said recent Ownis Zac and Skylar. Their real estate agent, Elise Helton with Costello Real Estate and Investments, elaborated on how it would have taken Zac and Skylar “three to five more years to own a home in the traditional way.” 

So how did Zac and Skylar accelerate their dreams of homeownership? Can their solution work for you too? Here are a few ways Ownify helps first-time homebuyers stand out in the Triangle housing market.

Make a competitive cash offer 

First-time homebuyers are often considered by sellers to be more risky than repeat buyers. Whereas repeat buyers have proceeds from the sale of another home, and investors often have cash on hand, first-time homebuyers typically need to secure financing to buy a home. With this financial contingency, the risk increases that the deal will fall through. 

The cash competition is intense. Cash sales are at a 9-year-high across the U.S., currently at 36.1% of single-family home and condo sales, up from 34.4% in 2021 and only 22.7% in 2020. However, only 3% of first-time homebuyers are able to pay cash, compared to 27% of repeat buyers. The problem may continue to get worse for first-time homebuyers. With mortgage interest rates rising, creating affordability problems for many buyers, especially first-time homebuyers, market experts anticipate cash purchases may continue to increase in 2023 as investors with cash on hand continue to enjoy their competitive advantage.

With Ownify, Zac and Skylar were able to avoid the financing contingency and make a competitive cash offer on their dream home. As Zac shared, “What really drew us to Ownify was their passion for helping first-time homebuyers make it through an otherwise scary process. They provided so much help with all of the initial costs in buying a home, provided countless resources and served as a guide for us from start to finish.”

Eliminate the appraisal gap risk 

Buying a home isn’t like stopping by the store and buying a product for the price on the sticker. It’s like getting to the checkout counter to pay for your product, and then someone swoops in and offers the cashier more money, perhaps even more than it’s worth, to take that product home on the spot.

In the housing market, those values are reflected in the purchase price and the appraised value. Sometimes the price agreed upon by the buyer and seller, the purchase price, does not match the appraised value, which is an evaluation performed by a professional appraiser to determine the property’s value. This difference is known as the appraisal gap.

Mortgage loans require appraisals, as the lender wants to ensure the loan amount is not higher than the value of the home. This becomes a risk to the seller, because the buyer can back out if they’ve included an appraisal contingency or are unable to secure financing because of the appraisal gap. When the buyer is forced to back out, the result is a lose-lose situation for the buyer and the seller. The buyer loses their due diligence fee, which is a payment to the seller that compensates them for the time the home was off the market during the appraisal and inspection process. In addition, the seller now has to restart the process with the next offer on the table, with the risk that it too will have an appraisal issue. In a competitive market like the Triangle, bidding wars can inflate the purchase price of homes and increase this risk. When given the choice, sellers will choose an offer that does not have an appraisal contingency or a financing contingency that will require an appraisal.

In addition, FHA and VA loans have traditionally been popular among first-time homebuyers because of their lower down payment requirements compared to conventional mortgages. And while FHA and VA loans are seemingly enticing for first-time buyers, these government-secured loans further compound the risk for sellers because appraisers have a longer checklist of minimum property requirements that the seller most likely won’t want to endure, especially in a competitive market with enticing cash offers. According to a recent NAR Loan Type Survey, 89% of sellers would be likely to accept an offer from a buyer with conventional financing, but that number drops to 30% of sellers willing to accept an offer with a FHA or VA loan. The net effect of all that? In 2022, less than 3% of single-family homes in the Triangle were purchased with low-down payment loans.

By partnering with Ownify, Zac and Skylar did not need to secure financing to buy their home. In addition to removing the financing and appraisal contingencies, Ownify transformed their offer into full cash, making it irresistible to the seller. As their real estate agent Elise Helton shared on the competitive nature of the market, “Given the net migration, we have more people coming into the Triangle area of North Carolina than leaving, and those people are going to need housing. Ownify gives my clients a strong and competitive financing option where they are noticed and that’s why I’m excited to partner with them more moving forward,” Elise said.

Sellers want buyers who close quickly

By removing common contingencies, including financing and appraisal, buyers can also remove risks of delays to the closing process, making their offer more attractive to sellers. While it can take up to 45 to 60 days to close with a traditional mortgage process, with Ownify’s simple solution the seller is able to get their money fast and the buyer gets to move in quickly, a win-win for all involved. “With my clients Zac and Skylar, we closed on their new home in only two weeks, even during the Thanksgiving Holiday,” said Elise. “It was a smooth process for everyone involved.” A quick close is what the seller wants, and the ability to provide that as the buyer will put you in the position to succeed off the bat.

At Ownify, we reimagined homeownership for first-time homebuyers, and made the decision to work exclusively with first-time homebuyers, to help them stand out in the market. With as little as 2% down, we can remove the necessity of traditional loans and compete with powerful cash offers and a short closing timeline. In doing so, we’re also helping sellers find the right buyers to take over the care of their homes. While sellers tend to accept the higher or less risky offer for their home, they don’t actually want to sell to investors. Sellers were once first-time homebuyers themselves and they care that their home will be passed to the good hands of someone who will cherish it for many years. This is why it’s crucial to put the first-time homebuyer equal to the institutional investor, so that everyone can feel rewarded and keep the cycle of homeownership in America in the hands of the community, where it belongs. 

To learn more about how to stand out in the competitive Triangle market, submit your pre-qualification to see how Ownify can put you on the path to homeownership. The pre-qualification is free, will not affect your credit score, and can be completed typically in under 10 minutes. By answering a few questions, you can receive your custom budget to assist in the search for your dream home in the Triangle.

If you're ready to get pre-qualified then apply now here.

If you would like a quick check on your eligibility for Ownify, use our tool here.