HOUSTON - A real estate company with a new way to buy and sell a home just moved into Houston. Orchard lets you buy a new house before you sell the old one.
That means home sellers don't have to keep the house clean and ready to show, or risk a buyer bringing in COVID-19, while they're still living there.
"Thinking about having to show a home, while having two little kids that will literally make a mess every five minutes," said homeowner Russ McMinn, explaining why he and his wife Brandi listed their home with Orchard instead.
They say Orchard gave them a cash offer for their Dallas area home. That allowed them to buy and move into their new home before the old one was listed.
"They gave us a really good cash offer for our home. They came and inspected the home themselves and made sure everything was in order," explained Brandi McMinn.
"People say how do you do that?" said Orchard co-founder and CEO Court Cunningham.
"Today, I have to sell first, put my stuff in storage, move in with the in-laws, and unlock my home equity. Only then can I go shopping. We allow you to reverse the order."
The Orchard website says a home seller can get up to 90% of their home's value upfront to put toward a new home, making them cash buyers. Orchard pays to clean up the home and sellers get the balance after costs when it sells.
"We go shopping for your new home and when we find the home you like, we buy that house with our cash in our name. You move in, pay a rent to us that is much lower than the carrying costs, and we list your old home," explained Cunningham.
The home seller pays the mortgage on the old home until the property sells. If it doesn't sell in 120 days, Orchard guarantees to buy it. CEO Court Cunningham says Orchard also offers title and mortgage services, and home sellers pay Orchard the same 6% fee they'd usually pay a realtor.
We asked how home selling prices compare.
"We have data that shows that we achieved at least as good price realization as the average realtor," said Cunningham.
"They gave us a good idea of how the market is, what your house is probably going to sell for, and they basically hit it on the head. And it sold really quickly, the first weekend," said Russ McMinn.
Orchard is already operating in Dallas, Austin, and San Antonio, as well as Denver and Atlanta. Other companies, such as Homeward and Knock, offer similar real estate models.