Fannie Mae-No Politics (FNMA)

[Robert from yahoo bd]

From todays WSJ: "Startups with cash-offer programs are expanding quickly. Companies like Ribbon, HomeLight Inc. and Orchard unveiled new funding rounds this month. Knock said this spring it is exploring plans to go public. Opendoor Technologies Inc., a house-flipping company that went public in late 2020, launched a cash-offer program in March. Real-estate brokerage Redfin Corp. is piloting a cash-offer program in some markets, a spokeswoman said.

Cash-offer companies are paid through commissions, fees or both. In some cases, the companies act as the buyer's real-estate agent or mortgage lender and are paid through sales commissions or origination fees. Other companies charge a flat fee, often between 1% and 3% of the purchase price.

One advantage for companies offering these programs is it helps them connect with consumers early in the home-buying process, said Guy Cecala, chief executive of industry-research firm Inside Mortgage Finance.

"The reality of the situation is it is very, very hard to shop for a house now unless you can put in an all-cash offer," Mr. Cecala said. "The question is, what kind of strings and everything else do they have attached to it?"

Cash-offer companies are taking a risk. If a home buyer's financing falls through, the company could end up owning the house and needing to resell it.

There also might be limited demand for these programs in a less frenzied market."