How To Beat The Nashville Market
For the past five years, Nashville has seen of the biggest real estate bumps in the entire country. To put it in the context of numbers, a two-bedroom home in Nashville five years ago would cost on average $146,500. In 2019, the average price on a two-bedroom is up to $245,000. That is an INSANE increase, and something that isn’t sustainable in most economies. In Nashville, however, there is a constant influx of new residents-which means new money. With that comes heavy amounts of investors that are able to drop cash offers on properties, put a bit of money into the house and then flip it for a huge return. While that’s good for current residents and people that already own, it puts a large burden on buyers that are currently shopping in the marketplace. However, a company has come to town in the hopes of fixing that problem for buyers- their name is Ribbon.
A friend and colleague of mine had a property listed last month in South Nashville in a community that has been undergoing a lot of renovation over the last couple of years. In short, a lot of homes that have had exactly what I described above happen to them- property purchased, renovated, sold for the going market rate. Within a couple of hours of being listed, he got an offer. Although, it wasn’t a traditional offer because it came from a company instead of the usual Mr. or Mrs. So-and-so. There were a couple of really intriguing things about the offer that would make it stand above more conventional and common offers. The main benefit, it is a cash offer, which means that there is no threat of financing not working out for a buyer. Second, with it being a cash offer, there wasn’t going to have to be an appraisal. What was agreed upon in the sales contract for a price-pending a good home inspection- was the price. From a seller’s perspective, these two things are the most important thing when it comes down to the bottom line of net earnings from a sale. Ribbon takes both of those things completely out of the equation. When everyone in Tyler York heard about this, we honestly thought that it was too good to be true.
While there are a couple of benefits to getting an offer from Ribbon, I think that their real value is in buying. Here’s how it works. John Doe wants to move him and his family out of their current home that they own. He and his realtor go around for a couple of months searching for a property and get rejected on three offers, all due to a home sale contingency in the contract that says the buyer’s current residence must sell before the buyer is qualified to get a mortgage and buy the home. With Ribbon, their offer LOSES the contingency, making it comparable with other buyers that don’t have it while also providing a cash offer that isn’t just going to low-ball the seller. Moral of the story is, cash offers win more often than they lose.
After a contract is signed off on, it’s a pretty quick sell for Ribbon. Once Ribbon “owns” the property (because they’re really buying it on behalf of someone contracting them, they then go into a leaseback agreement with the buyer. This leaseback is in place until the buyer’s original home sells. Once that takes place, the buyer gets a traditional mortgage to buy the home from Ribbon, and it’s all done from there. Your home is now officially yours and you didn’t even have to fight the headaches of making sure everything falls in to place at exactly the right times. Like I said, sounds too good to be true, right? I think Ribbon is a total game changer for the traditional buyer especially in such a fast-paced market like the one that we have in Middle Tennessee.