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The most dominant customers in the real estate industry are the home buyers and the home sellers but if you look closely then there is another segment of customers, which are the most recurring ones, who want to sell a home and buy a new one instantly. This segment of customers is known as “dual trackers” in the industry.
Orchard homes was launched in 2017 with a vision to serve this segment of customers mainly.
Launched as Perch in 2017, the company was rebranded as Orchard in early 2020. Orchard estimates the market value of your home and allows you to use 90% of your current home’s equity to make a cash offer on your new home that you wish to buy. This also allows you to make a non-contingent offer on the new home which is really attractive for home buyers, as these offers are less likely to fall through. Orchard provides 3 main services: Move First, Buy and List, and List with Orchard.
Orchard Homes’ additional services also include Offer Boost, Orchard Title, Orchard Home Loans, and Orchard Homeowners Insurance. Thus, allowing Orchard real estate to bring the home selling and home buying process all under one roof.
In this complete guide about Orchard, we are going to discuss about everything, their story, their business model, their services, their pros and cons, their competitors, and some Orchard reviews as well.
Orchard at a Quick Glance
Move First, Buy and List, List with Orchard
6%, 4%, 6%+1% convenience fees respectively
Austin, Dallas-Fort Worth, Houston, San Antonio, Denver, Atlanta, Charlotte, Raleigh-Durham, Montgomery Co., MD, Northern Virginia
Court Cunningham (co-founder and CEO), Sean Roberts (COO)
Phone: (844) 819-1373 | Email: firstname.lastname@example.org
Services by Orchard
1. Move First
In a competitive market, homes get a lot of offers and the real estate inventory turnover is quick. Hence, there is a risk of losing out on your dream home if your first offer is not attractive enough to the home seller.
So, if you are buying in a competitive market then Orchard real estate can help you buy your new home and sell your old home at the same time. Orchard does so by setting you up with one of their home advisors who inspect your home and come up with the market value of your home. Out of this value, Orchard allows you to use to 90% of equity, which they call as “instant equity”, to make a non-contingent, high-cash offer on your new home. Such offers can increase the chances of getting your offer accepted.
Here is how the Move First process works:
Home assessment: You have fill up a form on their website and give the basic details of your home like the area, land limits, areas in need of repairs, built year, etc. This assessment helps Orchard’s home advisors to come up with your home’s market value.
Access 90% of your equity: Based on the assessment results and your current home equity, Orchard allows you to utilize 90% of your equity to buy your new home.
Mortgage handover: One of the biggest problems that Orchard Homes solves for home sellers is that they handle the mortgage payments on your old home till it gets sold. You don’t have to worry about the mortgage payments on your old home, just move into your new one and start unpacking. But there’s a catch!
Prepping and listing: Orchard invests over $1000 from their pockets into repairs and preparations for your old home. Their agent acts as your listing agent. You will only get your new home’s title once your old home is sold. Again, there’s a catch!
Get your bill: Orchard doesn’t charge you for anything upfront for repairing your home but deduct the expenses from your sale proceeds, along with that they also deduct their fees which is 6% of your home sale price and your overlapping mortgage payments. Another thing that they sneakily push out of the context is that you also have to pay the buyer’s agent commission of 2%-3%. So, your total expenses would be much more than you expected them to be.
Yes, Orchard homes is raising huge money from their investors to simplify the home selling and buying process but when it comes to saving money, they are not that good!
A Flat Fee MLS package from Houzeo can allow you to list your home on the MLS (Multiple Listing Service) for a much lower fee. Instead of paying 6% commission on your home sale, you only pay a few hundred dollars and list your home on the MLS as a FSBO (For Sale by Owner). Listing your home as an FSBO home seller not only saves you money but also gives you more control over your home sale, as you control which services you want and which you don’t.
Eligibility criteria for Move First
- Must be a single-family home
- Built between 1950-2020
- Your home’s market value must fall between their pre-defined range
- The home that you sell and the home that you buy should be in one of their markets
2. Buy and List
Orchard raised $69 million to develop machine learning for buying and selling homes and since then they have developed advanced home search tools to find and buy a perfect home that suits your needs.
If you are looking to buy and sell at the same time and your home is built before 1950 or after 2020 then you can pair up with Orchard to save some bucks on the real estate fees. Orchard homes provide their Buy and List service at 4% of your home’s sale price. However, there are many other discount real estate brokers who can list your home for much lower charges. Also, if you opt to go with a Flat Fee MLS listing service like Houzeo then you save even more.
Orchard’s website allows you to browse through the properties that are listed with them and you can choose the one that you like, however, they only show you homes that are located in the areas they operate. So, if you want to buy a home where they do not operate then, unfortunately, they can’t help you. In such cases, Houzeo would be your best choice as we provide nationwide coverage and operate in all the states of the United States, giving you the freedom to sell a home from any state and buy a home in any state.
Orchard real estate does provide professional photography, home cleaning and repairing, on-demand tours, 3D video tours, and much more benefits at no up-front cost to you but they charge you for all of their home prep services at the time of closing the sale.
Here is how the Buy and List process works:
Meet your Orchard agent: They will match you with an experienced and licensed Orchard agent who will work with you on designing your home selling and buying plan.
Find your new home: Using their advanced machine learning Orchard will show you homes that match your requirements. With their on-demand touring you can tour any home as soon as it hits the market. Once you decide on the home that you want to buy, your Orchard agent will help you negotiate the winning offer.
Sell for top dollar: Orchard claims that 62% of the time the homes listed with them sell above the listing price. So, we can assume that they aggressively market your home and help you get maximum exposure and top dollar.
3. List with Orchard
The above-discussed service only allows you to buy homes in the markets where Orchard operates, however, for homebuyers who want to move outside the Orchard locations they have another service called List with Orchard.
The homeowners who want to sell quickly without the hassle of the whole home selling process can avail this service. Orchard gives you an optional cash offer that is there to assure your home gets sold in case no buyer comes in within the period of 120 days from listing the house with Orchard.
How List with Orchard process works?
Get your cash offer: Orchard will assess the value of your home and based on that makes an optional cash offer. This cash offer is, needless to say, lower than the actual market value of your home, and many Orchard reviews have proved the same. However, they claim that most of the homes listed with them do sell on the market for at or above the listing price.
Prep and list: Orchard preps your home with required repairing, painting, cleaning, professional photography, arranging home tours and showings, recording a 3D tour, and much more. This prepares your home for the market and also attract more buyers.
Sell with peace of mind: Orchard real estate claims that most of the properties listed with them get sold on the market itself and that too at or above the listing price. However, in case something unpredictable happens and your home remains unsold for 120 days on the market, Orchard buys your home for the pre-determined amount. So, in a way, they guarantee your home sale.
Orchard’s business model – especially their List with Orchard service – is similar to Knock but what is not similar is the way they do not disclose how their optional cash offer is calculated and how much is it. On the other hand, Knock openly discloses that their cash offer is around 80%-85% of your home’s market value.
List with Orchard service will cost you 6% of your home sale as Orchard’s fee, repair costs, 1% convenience fee to cover their cost to own and resell your home after you move. Also, after your home is sold you also have to pay buyer agent’s commission.
Do not forget, you pay all of this on the sale price of your home which is already lower than the actual market value of your home.
Instead of facing a loss of thousands of dollars, the best option that you can opt for is to go with an MLS listing service like Houzeo. We not only give you maximum exposure but also maximize your savings by saving you 3% of commissions by eliminating the listing agents. And, if you are lucky enough to find a buyer who is not represented by an agent then you save another 3% on commissions. This way, you only have to pay for repairs and your MLS package.
Eligibility for List with Orchard service
- Not buying in an Orchard market
- Single-family home
- Built between 1950-2020
- Not currently listed on the market
- The home’s valuation must fall within their pre-defined valuation
How Much are Orchard’s Fees? How Does Orchard Makes Money?
Orchard real estate’s services are commission-based which means the higher your home sells for, the more they will get paid.
Their ‘Buy First’ service will cost you about 6% of your home sale price but also keep in mind that you will have to pay 2%-3% to the buyer’s agent, if they have one. Along with that, they do not charge you anything upfront when preparing your home for sale but they do charge you for all of this at the time of closing. So, these expenses are going to cost you a lot and your savings would be significantly affected.
Orchard’s ‘Buy and List’ service will cost you 4% of your home’s gross sale price and you will have to pay buyer’s agent commissions and preparation costs at the time of closing.
Orchard also allows its customers to consider their exclusive “Offer Boost” option. With this feature, Orchard can provide funding to you so you can make full cash offers on your new home. Full cash offers are really attractive to home sellers as they are less likely to fall through and faster to close on. Making a full cash offer significantly increases your chances of getting your dream home.
However, there is a catch here.
If your home’s sale price is $250,000 and you want to buy a home whose price is $300,000 then Orchard will make a full cash offer on your behalf, buy the new home and sell it back to you. Orchard will charge you rent of $30-$50 for each day that you stay in the new home till the day you complete the paperwork to buy the home back under your name.
If you use Orchard home’s ‘List with Orchard’ service then you have to pay 6% of your home’s gross sale price + 1% convenience fee for them buying and keeping your home till it sells + buyer agent commission of 2%-3%. Your final expenses would be much more than expected, it could be 10% of your home’s sale price.
Instead, if you choose a Flat Fee MLS listing service like Houzeo, you’d be saving 50% of your commission expenses, and if you are lucky enough to find an unrepresented buyer i.e., buyer without an agent, then you save full commissions. Houzeo makes it easier for you to find an unrepresented buyer with their ‘Buyer Search’ feature where buyers can come and search for homes as per their requirements i.e., area, garden, parking space, number of rooms and bathrooms, and much more.
If your home suits the buyer’s needs then they can make a direct offer on your home without any interference from agents.
Orchard Homes Locations
Although Orchard is based out of New York they do not operate there. Currently they operate at 10 locations. The locations they serve are:
Austin, Dallas-Fort Worth, Houston, San Antonio, Denver, Atlanta, Charlotte, Raleigh-Durham, Montgomery Co., MD, and Northern Virginia.
Orchard has been reviewed by 157 customers and boasts of a rating of 4.9/5 stars but that’s their internal reviews.
However, the internal reviews cannot be trusted as none of them are negative reviews. As per their positive reviews, most of the customers found Orchard’s process to be straightforward and praised how the Orchard Home Advisors guided them on everything.
If we have to come to a fairer picture then we can look at external websites like Trustpilot, Glassdoor, Better Business Bureau, and some more third-party websites. Here are a few of the third-party reviews that we have compiled for you.
- Trustpilot: 4.6/5 (131 reviews)
- Homeopenly: 1/5 user’s rating (14 reviews)
- Better Business Bureau: A rating and 3.4/5 (5 reviews)
- Glassdoor: 4.8/5 (72 reviews)
Some of the reviewers on Trustpilot have given a fair picture of their experience with Orchard where they pointed out that they were impressed with the initial concept of the company but were unimpressed with the competence of the agent that was assigned to them.
Although the customer reviews about Orchard Homes are mixed, the employee reviews are favorable. On Glassdoor, Court Cunningham, the CEO of Orchard, has an approval rating of 95% and 96% of the employees said that they’d like to recommend working there. In the positive reviews, employees cite motivated peers and healthy company culture; however, they also cite a lack of work-life balance in the negative comments.
Alternatives to Orchard
Flat Fee MLS Listing Services like Houzeo
Houzeo is one of the best Flat Fee MLS listing services in the United States that offers maximum savings and maximum MLS exposure, all for an affordable flat fee of a few hundred dollars. Prices vary according to your state.
Multiple Listing Service (MLS) is a real estate database where all the properties that are available for sale are listed. Only licensed agents are allowed access to the MLS. According to National Association of Realtors report, 88% of buyers buy through an agent, so if you are not listing your home on the MLS, you are losing out on this 88% of buyers.
Nowhere on their website Orchard have mentioned that they list their home on the MLS, so assuming that they don’t it would be unhelpful towards your home sale and hinder you from finding a qualified buyer.
iBuyers like Offerpad
Offerpad is a big competitor of Orchard. Offerpad allows home sellers to sell their homes for cash within 24 hours. They assess the home and make a cash offer within 24 hours, if you are okay with their offer, you accept it and your home is sold within 24 hours.
However, Offerpad has been severely criticized for its low-ball offers and unsatisfactory customer service experience. They also have a similar feature to Orchard’s Buy First feature called as Sell Express option where they make you a cash offer for your home and you can move on to buy your new home. Although the process sounds simple and quick, it might not bring expected results and profits for your home sale.
Local Home Buying Companies
Nowadays, there are many companies out there who are specifically into buying homes for cash and then reselling them.
If you work with a local, smaller company then chances are that you will have a better customer experience. You will likely have a direct point of contact who you can reach out to on the weekends and at night to answer your questions.
So, Should You Go With Orchard Homes?
Orchard Homes is definitely a good option if you want to buy a new home before you sell, or maybe you want to have a backup offer in case you are not sure whether your home will be sold as quickly as you want it to, but if you want to save money…. Orchard Homes might not be the right choice for you.
Not only do you have to pay 4%-6% as commissions but also you have to pay closing costs, buyer agent commissions, a convenience fee of 1% if you are selling it directly to them and even rent of $30-$50 daily if you are making a full-cash offer on your new home using their “Offer Boost” feature.
So, if you look at it then you are getting good services but no savings at all.
Our suggestion would be to go with a Flat Fee MLS Listing Service like Houzeo which offers maximum savings with the best MLS exposure and also allows you to customize your package to keep complete control over your expenses.