Imagine if you could sell your current home for a cash offer at a time that coordinates with the closing date of your new Lennar home. Lennar has teamed with Opendoor to create the New Home Trade-up Program to do just that. In this recent Builder article by Lauren Shanesy, Lennar’s Executive Chairman, Stuart Miller, discusses this simple and innovative new way to buy a home.
“I love this new home…but, I have to sell my current house first.”
New home sales teams hear this all too often from potential buyers. Forty percent of shoppers in the market for a new home have one they have to sell before completing a purchase, according to data from the National Association of Realtors, a process that can add months and unnecessary stress to a buyer’s timeline.
Enter Opendoor, a company that has partnered with builders across the country to purchase existing homes with an immediate offer so buyers can close on their new home more quickly. After months working with Opendoor as the company’s pilot partner, Stuart Miller, executive chairman at Miami-based Lennar Corp., says this new approach could have dramatic implications for the housing industry.
“Buyers always encounter the same pain points–their life has changed and they have outgrown their home, or maybe are looking to downsize, but they have trouble figuring out how to approach the market. They worry about ending up with a gap where they need to find a place to live temporarily, or a situation where they are paying a double mortgage on their old and new homes simultaneously,” says Miller. “What we have been able to engineer here is the beginnings of a frictionless program. It’s a powerful thing that we can do this for our customers without putting them through the aggravation of figuring out the transaction process.”
He likens the process to the way that car buyers can trade in a vehicle at a car dealership when it’s time for an upgrade. A less stressful home sale will make homeowners more apt to move up to a new home, says Miller.
“When we take friction out of the transaction side of the business and create that transaction with ease in a condensed period of time, we take the fear out of buying a home,” he says. “Owners won’t feel stuck in a home if they outgrow it, and your house can be a stepping stone into something new as you move up.”
The ramifications for home builders are huge, he adds. “If we can do this seamlessly, it starts to increase the number of people that come to the new home market and the number of transactions,” he says. “That will trickle through the entire housing market, all the way up to the new home builders.”