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14 min read Dec 01, 2022

Homeward Reviews: Pros, Cons, And Alternatives

Homeward Reviews: Pros, Cons, And Alternatives

Homeward helps you make attractive offers on a house by backing your offers with cash. It is a real estate financing company trusted by famous real estate giants like Keller Williams, Redfin, etc. But does Homeward make the best cash offers in the market? Are there better alternatives for home buyers? Read Homeward Reviews to know more.

What is Homeward?

Homeward is a home financing company that purchases homes on your behalf by making attractive cash offers. After securing a mortgage, the buyer repurchases the home from the company. In the meantime, the company either holds the property or rents it to the buyer.

Homeward offers three cash-buying programs to home buyers. They are:

  • Buy Before You Sell: Homeward purchases a new property for full cash before you sell your existing one. You move into the newly purchased home, list and sell the old one. Use the proceeds to repurchase your house from Homeward.
  • Buy With Cash: To make your offer more competitive Homeward will back your offer with cash. Unlike Buy Before Sell, you need not sell your existing house. It empowers first-time home buyers to make cash offers.
  • Backed By Cash: If your mortgage financing fails or gets delayed, Homeward backs your offer with cash. This will strengthen your offer but will leave you on the hook to pay a 1% fee, even if you do not use the Homeward cash.

Is Homeward Legit?

Yes, Homeward real estate is a legitimate company. It is based in Austin, TX, and has coverage in 7 states. Tim Heyl started Homeward in 2018 and the business has over 620 reviews on Google reviews.

The company has three segments: Homeward Offers, Homeward Mortgage, and Homeward Title. Bundled up together, it is known as Homeward Way.

How Does Homeward Work?

Homeward works on a cash-offer financing model.

The company makes competitive cash offers on your behalf and holds the property till you shop for the mortgage. Once your mortgage is finalized, you buy back the property from the company. Homeward charges a percentage of a home sale amount as their convenience fee.

Homeward has affiliated mortgage and title services. However, choosing the affiliated services is optional.

Where Does Homeward get Cash to Buy Properties?

Homeward is backed by large institutional investors that give them access to cash. The company uses this cash to make contingency-free cash offers on houses.

Homeward Cash Offer Programs

Homeward offers the following programs to home buyers:

Homeward’s Buy Before Sell Program

What is it?

The company purchases the home in total cash on your behalf (Homeward Purchase), and you move in. Then you list and sell your existing house, and use the proceeds to buy back your new home from Homeward (Customer Purchase).

How Much do You Pay?

You pay a convenience fee of 1.9% – 2.4%, depending on your state.

If you use Homeward Mortgage you get 1% credit (0.5% in some states), so the effective cost comes down to 0.9%-1.4%. You pay an Earnest Money Deposit of 2% to 4%, depending on if your property is valued below or above $1M.

Apart, you need to pay a prorated rent for the number of days you stay in the house.

How Does it Work?

Here’s a quick overview:

  • Step 1: Get approved for a specific amount so that you can make an offer as soon as you find your desired house.
  • Step 2: Request Homeward Cash Offer along with your agent. You will also research your financing options and finalize the lender in this step.
  • Step 3: Pay the earnest money deposit and option fee and finalize the loan with your lender. You also sign the Customer Purchase Contract, residential lease, addendums, and Homeward’s Service Agreement Addendum.
  • Step 4: Move into your new home and list your old home within two weeks, if not already.
  • Step 5: Negotiate offers for your existing home. Inform the Homeward team and your lender when your house goes under contract.
  • Step 6: Secure a mortgage amount, complete the closing paperwork, and repurchase your house from Homeward.

Alternative: Ribbon Reserve

Ribbon Reserve is a segment of Ribbon Home that is very similar to Homeward’s Buy Before Sell Program. We recommend opting for Ribbon Reserve if Homeward doesn’t cover your state. The following table shows how Homeward’s Buy Before Sell compares with Ribbon Reserve.

ParametersHomeward’s Buy Before SellRibbon Reserve
Service Fee1.9% – 2.4%1.5% – 3.25%
Coverage7 states17 states
Customer Rating4.6/5.04.4/5.0
Guaranteed Sale of Your Old Home
Credit on Using Affiliated Mortgage Service

Homeward’s Buy With Cash Program

What is it?

Homeward’s Buy with Cash Program helps you make attractive cash offers on a house in a competitive market. The company gives you cash to make a contingency-free offer. This makes your offer less risky for home sellers.

How Much do You Pay?

1.9% in all states Homewards covers. If you opt for Homeward Mortgage you get a credit of 1%, bringing your effective cost to 0.9% due at closing. Apart, you pay an Earnest Money Deposit of 2% if your home is priced below $1M, and 4% if it is priced above $1M.

How Does it Work?

Buy With Cash Program is similar to Buy Before You Sell, except here you do not sell an existing property. Here’s an overview of the process:

  • Step 1: Get approved for a specific amount so that you can make an offer as soon as you find a house of your choice.
  • Step 2: You along with your agent request a Homeward Offer. You will also research your financing options and finalize the mortgage lender.
  • Step 3: You pay the earnest money deposit and option fee and work with your lender to finalize the loan. You also sign the Customer Purchase contract, residential lease, addendums, and Homeward’s Service Agreement Addendum.
  • Step 4: Move into your new home and rent it from Homeward until you repurchase it.
  • Step 5: Secure a mortgage amount, complete the closing paperwork, and repurchase your house from Homeward.

Alternative: Better Cash Offer

Better Mortgage’s Cash Offer is exactly like Homeward’s Buy with Cash Program. Better makes competitive cash offers for you, and holds it till you secure a mortgage and repurchase your property from the company.

This is how Homeward’s Buy With Cash compares with Better Cash Offer:

ParametersHomeward’s Buy With CashBetter Cash Offer
Service Fee0.9% – 1.9% 1.25% – 4%
Coverage7 states19 states
Earnest Money Deposit2% – 4%7%
Customer Rating4.6/5.04.6/05.0
Security Deposit
Credit on Using Affiliated Mortgage Service

Homeward’s Backed by Cash Program

What is it?

The Backed By Cash Program gives an added layer of assurance to home sellers about your offers. Homeward backs your offer with cash. This means if your mortgage falls through, Homeward would buy the house on your behalf for all cash.

How Much do You Pay?

You pay a 1% convenience fee. If you use Homeward Mortgage, the company gives you 1% credit. This brings your effective fee to 0%. However, you do have to pay a 1% Earnest Money Deposit.

How Does it Work?

Homeward pre-approves you for a specific amount. You apply for traditional financing. If your mortgage financing is delayed or falls through, Homeward buys the house for full cash on your behalf. You move into your new home and pay the prorated rent until you repurchase it, like other Homeward Programs.

In case, your mortgage financing doesn’t fall through, you will still pay a 1% Homeward convenience fee.

Alternative: Ribbon Rescue

If your financing gets delayed or your existing home’s sale falls out of contract, Ribbon steps in. The company checks your eligibility for Ribbon Rescue and then purchases the home for you. During this time you can rent the home from the company for up to 6 months, on a prorated basis. This will give you enough time to resolve mortgage issues.

You pay the Ribbon fee only if you use their Rescue plan. Unlike Homeward Backed By Cash, where you are on the hook for paying a 1% fee, even if do not face any financing problems.

This is how Homeward’s Backed By Cash compares against Ribbon Rescue:

ParametersHomeward’s Backed By CashRibbon Rescue
Service Fee0% – 1%3% – 3.5%
Coverage7 states17 states
Customer Rating4.6/5.04.4/5.0
Security Deposit for Renting Your New Home

What is the Homeward Way?

The Homeward Way is a bundle of three services provided by Homeward.

  • Homeward Offer: It consists of their cash programs through which the company helps you make a cash offer- Buy Before You Sell, Buy With Cash, and Backed By Cash.
  • Homeward Mortgage: It is Homeward’s mortgage financing division. You need to apply only once for the mortgage and fill out only one set of forms. Securing your mortgage financing with Homeward Mortgage makes you eligible for 1% credit.
  • Homeward Title: To avoid the hassle of two closings the company offers virtual closing for home buyers. If you close both transactions with them they cover the title policy for you.

Homeward Coverage

As of November 2022, Homeward Offer is available in 7 states – Arizona, Colorado, Florida, Georgia, Oregon, Texas, and Washington. The company offers all the cash offer programs in seven states.

The company is very soon going to expand its coverage in California.

Homeward Customer Reviews

The company has 634 reviews on Google and 258 reviews on Trustpilot. On both platforms, Home home buying has a positive rating of 4.7 and 4.6 respectively.

Helped Buyers Purchase Dream Homes in Hot Sellers Market

Homeward helped a buyer make a competitive offer in Colorado’s hot seller market. The reviewer mentioned that it was nearly impossible for them to purchase a house without a cash offer. Homeward’s Offer made the buyer’s offer competitive and all the people involved in the transaction were helpful and friendly.

Company Discloses all Prices Up-front

Customers are satisfied with the Homeward fees which the company discloses on its website upfront. This is unlike several other cash-offering companies that are famous for charging high hidden fees and pulling off notorious scams. The home buyer found Homeward representatives informative and patient. The company stood by the commitment and the timeline.

Home Buyers Could Move into their Homes Earlier

A home buyer moved into their home 2 months earlier than if they had bought with a contingency offer. The customer mentioned how the Homeward team walked them through the entire process. The buyer claimed they spent less when compared to the amount they might have spent on renting and storage.

Homeward Acknowledged Communication Problems

Due to the massive amount of applications, the customer could not get a designated point of contact for communication. The closing date was not communicated to the buyer beforehand and they had to confirm on a call. The user had to send a crisp email to the founder of the company, after which the entire journey went smoothly.

The company accepted the feedback without trying to oppose the customer’s problem. This shows Homeward’s commitment to serving home buyers.

Benefits of Using Homeward

Good Customer Rating

The company has an aggregate rating of 4.65 across various company review sites. On digging further we found, Homeward Offers have at large received over 4 stars in most cases. 87 people have rated Homeward’s cash offers 4.5 stars on Google reviews.

We did come across some reviews where customers faced slight hiccups in communication. However, the company’s prompt response and acknowledgment of such reviews demonstrate Homeward’s credibility.

You Get Credit with Homeward Mortgage

Unlike other cash financing companies like Ribbon, Homeward offers up to 1% credit to home buyers if they use their mortgage service.

Using Homeward Mortgage for Buy Before Sell Program reduces the effective service fee to 1.4%. If you use Homeward Mortgage for Buy with Cash Program the initial service fee drops down to 0.9%.

You Pay No Hidden Fee

The company discloses all its prices upfront on its website. The company is transparent with its customers about their service fees, rental charges, and their home-buying policies.

In the customer reviews, we found reviews appreciating the transparency of the company.

Guaranteed Sale of Your Home

In their Buy Before Sell Program, Homeward guarantees to purchase your home if you are unable to sell it within six months. The company will purchase your old house for a Floor Price that is typically 90% – 95% of your home’s fair market value.

Drawbacks of Using Homeward

You Cannot Shop for FSBO Properties

The company makes cash offer only for represented home buyers and sellers. As a home buyer, you cannot buy or/and sell properties FSBO when working with Homeward.com. All transactions take place via an agent, which leads to the following:

  • There will always be a middle man
  • While selling your home old home you will be on the hook to pay a 6% agent commission
  • You cannot shop for FSBO properties

If you have the required financing or hard cash, search for properties using FSBO websites like Houzeo. Buying FSBO with Houzeo looks something like this:

  • Browse 1000+ properties on Houzeo’s FSBO page
  • Make an offer on your dream home
  • Interact with the home seller directly
  • Sign the contract
  • Perform the required due diligence
  • Close on the house

Homeward has Limited Coverage

Homeward operates only in 7 states. Unlike other cash financing companies like Ribbon and Better, Cash Offer have coverage in 17 and 19 states respectively. Homeward offers cash offer services at more rates. But due to limited coverage, home buyers living beyond Homeward’s coverage have to opt for expensive alternatives.

Homeward Alternatives

1. Ribbon Home

The company has three cash offer packages – Ribbon Boost, Ribbon Reserve, and Ribbon Rescue.

  • Ribbon Boost: The company purchases a house on your behalf by backing your offer with cash and appraisal protection. After securing a mortgage, you can repurchase your home from Ribbon at the same price.
  • Ribbon Reserve: It is similar to Ribbon Boost, except you can move into your new house while shopping for a mortgage. This Ribbon loan package is ideal if you want to close quickly.
  • Ribbon Rescue: It is similar to Homeward’s Backed by Cash Program, wherein you are assured of a cash offer if your financing fails before the closing.

Cash offer programs of Ribbon Home are very similar to Homewards but are a lot more expensive. Ribbon charges a 1% to 3.5% service fee, depending on the program and location. However, Ribbon Home has coverage in 17 states, 10 more than Homeward.

We recommend opting for Ribbon Home if Homeward doesn’t have coverage in your state.

» Ribbon Home Reviews: Read to know which Ribbon loan suits you the best

2. Better Cash Offer

Better Cash Offer is a cash financing segment of Better Mortgage. Better’s Cash Offer Program is similar to Homeward’s Buy with Cash Program. The company purchases the house on your behalf, you move in, pay the prorated rent, and simultaneously shop for the mortgage.

Like Homeward, Better has its own Mortgage Program. Depending on your choice of mortgage lenders and real estate agents, Better’s service fee can range from 2% to 4%.

» Better Cash Offer Reviews: Everything You Need to Know

Final Verdict

Homeward Offers is a good option for home buyers who are having a time crunch and want to make competitive offers in the hot seller’s market. Homeward services are a lot more affordable and the company has a good customer rating. The company, however, does not attempt to eliminate Realtors and requires buyers show want to sell first to pay a 6% agent commission.

If you have time list your home on the MLS and sell it FSBO with Houzeo. Homes listed on the MLS sell 17% faster and for more. Use the proceeds from the home sale to make offers on Houzeo properties. Interact with home sellers directly and close on the home sale quickly.

Eager to Know How Houzeo Works?

We’ve got you covered. Check out the following video to understand how Houzeo works and why it is one of the best For Sale By Owners websites in the U.S.

What is Houzeo?

An overview of what the platform is all about

Start Your MLS Listing NOW!

» NEED MORE CLARITY? Read these exclusive Houzeo reviews and learn why it is one of the best FSBO sites in America.

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