New Kind Of Mortgage Company Helping Coloradans Land Dream Homes

DENVER (CBS4) - A Colorado-based loan company is trying to reinvent how people buy homes by providing the money upfront to create more cash offers in an already competitive housing market. December marks the end of the first full year of Accept.Inc in business and a record run in the metro area with home prices continuing to rise and inventory remaining low.

"Accept.Inc is a new type of mortgage company that upgrades any offer to a cash offer, the way that we do that is we use our cash to purchase homes on behalf of buyers who we predict will secure a mortgage," CEO Adam Pollack told CBS4 on Wednesday. "You can think of us a kind of a rich aunt or a rich uncle, basically buyers get to be cash buyers using our cash."

Pollack created the company along with two other co-founders while they were in college. His family has a background the mortgage business back home in New York, and he didn't expect to enter the same industry. Their mission is to level the playing field and increase access to homes and the neighborhoods they're located in to a wider range of buyers.

"With our product, any buyer who can afford a mortgage is able to now submit a cash offer and compete with other buyers when there's multiple offers," said Nick Friedman, the COO and a co-founder of the company.

The model allows the company to buy the home first and then sell it to the interested buyer at the same price, the founders say their interest rates are similar to traditional loan companies. But by keeping expenses low and with financial backing from venture capitalists in Silicon Valley, their approach can be different.

Accept.Inc doesn't pay their loan officers with commissions, and they do not spend as much on marketing as other companies.

"They've accepted your offer, it's not the highest offer, but they love the cash aspect to it," said Annie Vitale, a homeowner who used the company this fall. "We knew that was the only reason we got the house."

Vitale and her husband, Jonathan, started their search for a home in Colorado in October and kept losing out to cash offers. They read about the company and asked their agent if it was a legitimate approach. They tried it and won the home they closed on this month, Vitale also joined the company as an employee.

"In a market that you feel you can't catch up with, it's not impossible, you can absolutely land the home of your dreams," she said on a video conference call.

The concept of their business model has only been strengthened in the past year by the high demand and low inventory, the pandemic has also made the value of the home even more significant to families. Low interest rates also keep putting more people in Denver where the supply has always been constrained.

"When I found this program, it was a game changer for my clients," said Lori Abbey, a realtor for Compass Real Estate. "It's a necessity now, and it's been a game changer for my buyers."

Abbey has been in the market for 10 years and says cash offers have always given you an edge, especially if you aren't willing to accept any concessions with the sale. She says the deals she has made with Accept.Inc have helped buyers get the winning bid after losing more than a dozen times on other houses with different agents.

She says one client came to her, and, together, they beat out 15 other offers. They also paid less because their offer was as good as cash.

"It's a huge deal, as a seller you want cash, and as a buyer if you have cash, it's going to save you money and you're going to win," Abbey said.

She advises anyone looking for a home under $700,000, especially in popular neighborhoods, should consider this option because they will likely go against five to 20 other offers. The end of the year is usually a slow time for the housing market but it is more competitive than normal.

"You need every advantage you can get and we've even seen time and again it's not easy to win with cash," Pollack said on a video conference call.

He and Friedman say in the beginning they needed forward-thinking agents who were innovative to embrace their concept. Their customers were also from similar backgrounds, but now buyers cover a broader range of occupations and age groups. Their deals include condominiums around $150,000 to homes selling around $1.5 million. Their business has increased 10 times in 2020 compared to the year before.

"It was the cash that won it, it was the cash that sealed the deal, it was such a good feeling," said Jonathan.

He and his wife say the housing market was daunting and intimidating, they worried at one point that they entered the market too late as they kept losing out with a traditional lender.

They ended up getting a better rate with Accept.Inc and say it is important to start using the service before you find the house you want to buy.

The process for approval is more rigorous because the company is making a prediction that the buyer can take on the responsibility of the loan before they purchase the home. Their focus has been in the most competitive range of homes, which includes the average price in the metro area of $550,000 to $600,000, but they plan to expand to other markets across the country.

"We're here to make sure that every buyer who can afford a loan has an equal chance at winning their dream home," Pollack said.

LINK: Accept.Inc