Homeward is a real estate financing service that, put simply, buys your new home for you with its own cash. Then you buy the new home back from Homeward later.
Homeward's "Buy with Cash" can give your offer an edge in a competitive market. And "Buy Before You Sell" lets you avoid the hassle of juggling a simultaneous sale and purchase, or carrying the costs of two properties at once.
But as you might’ve guessed, there’s no free lunch here. Homeward charges additional service fees and rent for the time you live in the new house before you buy it back from them.
Homeward does offer a few benefits over similar brands, though: you bring your own realtor, which means you can use a low commission agent to save thousands on commission fees. And you can lower Homeward's service fee if you use Homeward Mortgage for your loan.
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We think Homeward is a pretty solid option if you're interested in "home trade-in" or "cash-backed offer" services. It has generally solid customer reviews and recently launched in three new states, making it more widely available.
Homeward offers a few benefits over most competitors: Namely, opportunities to save by finding your own agent (and getting a lower commission) — and using Homeward Mortgage to get that lender credit to offset the ~1.9% service fee.
But a few key things to be aware of: You’ll still be on the hook for any and all standard costs for your sale and purchase. PLUS prorated rent to Homeward when your home sale closes. PLUS Homeward’s service fee. In other words, Homeward isn’t helping you avoid any costs you would’ve incurred on your own — it’s just delaying them (and charging you a little extra for it).
And don’t just assume Homeward Mortgage is your best value: The most important things with any loan are the interest rate and terms. Definitely still shop around to make sure you get the best rate possible. Even if Homeward effectively lowers its one-time service fee by ~1% at closing, if the interest rate is higher than another option, it could cost you tens of thousands of dollars over the life of your loan.
Homeward's fees are on the higher side, but they can be offset if you decide to use Homeward Mortgage for your loan. And you can choose your own agent, which means better representation and additional savings opportunities.
Homeward is also more transparent about the fees and other expenses than a lot of its competitors. And it has a solid average customer rating, with reviews consistently calling out the responsive customer service and good communication.
Homeward is currently available in seven states: AZ, CO, FL, GA, OR, TX, and WA. If you’re somewhere else and looking for a similar service, Knock is available in more places. And if you need extra cash to get your home ready to list, Flyhomesand Orchard can help you there (Homeward doesn’t offer additional funds for listing prep).
The biggest difference between Homeward and other trade-in services (with the exception of Knock) is that you can bring your own agent to the process.
This could be a plus for people who have an agent they trust, or for people who want to use a low commission agent to save on realtor fees. Of course, that means a little more legwork for you and your agent compared to other one-stop-shop alternatives, who provide their own agent services.
But we think bringing your own agent is the way to go, given the additional cost savings opportunity — and the fact that choosing the best agent for the job will likely net you a better outcome on both your sale and purchase.
Homeward provides credits at closing if you finance your purchase through its affiliate lender, Homeward Mortgage. This credit could eliminate — or at least help reduce — Homeward’s service fee.
Homeward’s initial service fee of 1.9% drops to 0–0.9% if you use Homeward Mortgage as your lender for its Buy with Cash service. For the Buy Before You Sell service, using Homeward Mortgage lowers your effective fee to 1.4%.
Flyhomes, one of Homeward's competitors, also offers a rebate that eliminates its 1% fee, but the company requires you to use its in-house agents — so no additional savings there.
Most home trade-in services require you to rent your new home from them until your old home sells. Once your old home sells, you’ll buy the new home from the company and begin making actual mortgage payments.
Homeward charges 0.7% per month for rent, prorated by the day and deferred until closing. Many services are less forthcoming about how much they charge in rent, making it hard to estimate your costs — and know exactly what you’re signing up for…
With Knock, you begin making a regular mortgage payment once you move in, and Flyhomes says it charges somewhere between $100–200 per day, which is a wide range (between $3,000–6,000 over 30 days). Orchard has the best deal on rent, charging $50–100 per day until the old home sells.
Homeward is usually able to provide a floor price guarantee on your home, offering to buy it for that price if it doesn’t sell within six months. Homeward says that it typically pays 93–95% of fair market value for homes, which is more than what other services usually pay. [1]
Orchard makes a similar guarantee, paying out after only four months, but it’s unclear how much it usually pays.
Keep in mind, however, that it’s unlikely your home won’t sell within a few months. Most homes will sell for a fair price within that time frame. But if you’re worried about your home sitting on the market without a sale, the backup offer can be reassuring.
Knock is a good alternative to Homeward if your home requires repairs before listing. Like Homeward, Knock allows you to use your own agent, but it also lends you up to $25,000 for home repairs to spruce up the house and get it ready for showings.
Knock and Homeward have some overlap, but Knock has more locations overall. It could be a good alternative if you don’t live in one of the states where Homeward currently operates.
But unlike Homeward, Knock doesn’t offer a rebate to offset its fee: You’ll pay 1.25% plus a flat service fee of $1,450.
Flyhomes has a 1% fee that’s offset to 0% if you use its mortgage service. The company also offers to cover some of the closing costs, which could mean thousands in savings.
One big drawback with Flyhomes is that its rent charge of $100–200 per day is higher than other services. If you need to delay your move or anticipate a longer sale timeline, this could really add up.
Flyhomes also doesn’t let you choose your own agent, which means you have to roll with whoever they match you with — regardless of experience and personality fit — and there’s no opportunity to save on commission fees.
Orchard, like Knock, will front costs for repairs on the home to be listed, which can be deducted from the proceeds of the sale later on. Orchard also has the best deal on rent, charging $50–150 per day — and it doesn’t charge you rent for the first 30 days. Orchard will also buy your home if it has been on the market for four months without selling.
But Orchard doesn’t let you choose your own agents, which means less ability to get the best representation and personality fit, and limited ability to get additional commission savings. Its fee structure is 6%, which is comparable to listing with a conventional realtor. But when you go through a low commission real estate company, you could potentially cut that fee in half.
Homeward offers three core services:
Buy Before You Sell: Homeward buys your new home for you before you sell your current one. You move in, list and sell your old home, then use the proceeds to buy the new one from Homeward. Buy with Cash (see below) is built into this service.
Buy with Cash: Homeward buys your new home for you with cash, then you buy it back from Homeward. It’s similar to Buy Before You Sell, but it doesn’t need to involve a separate home sale (i.e., you could use it as a first-time buyer). You still pay prorated rent from the day you move in until you buy the home back from Homeward.
Backed by Cash: Homeward will give you cash to buy if your financing gets delayed or falls through. This strengthens your offer (and gives you peace of mind) without committing you to actually using the cash and paying Homeward additional rent. Though you’re on the hook for at least 1% even if you don’t end up using their cash…
It also has an in-house title service and lending arm, Homeward Mortgage.
Look out for troubles with title services. Many reviews talk about Homeward’s clear communication, but a few negative reviews point out problems with its closing agents and title company. Make sure you and your agent agree to keep on top of everything required of you to close on the home.
Be ready to list your home once you buy. Once Homeward buys the new home for you, you’ll agree to put your home on the market within two weeks. Be sure that you and your agent can get the home ready in that amount of time before you make the offer on the new home. Again, it’s good to have both of your agents lined up before you initiate the process. If you’re selling and buying in the same area, you can also use the same agent for both (assuming they have the right experience).
Pay attention to the appraisal value and your purchase price. When you first make an offer on the home, Homeward will conduct a preliminary appraisal. If the preliminary appraisal value is below the purchase price, you’ll need to make up the difference:
What is it? Homeward buys your new house for you (with cash) and you move in. You list and sell your old house, then use the proceeds to buy your new house from Homeward.
How much does it cost? The service fee is 1.9–2.4%, depending on which state you’re in. If you use Homeward Mortgage, you get a 1% credit at closing (so the effective rate drops to 0.9–1.4%). Prorated rent is 0.7% per month. You’re also required to put down a 2% earnest money deposit.
How does it work? Here’s a quick step-by-step overview:
What’s the general timeline? Homeward says you can get into your new home in as few as 14 days, if your offer is accepted that quickly. Once Homeward purchases your new home, you need to get your old home on the market within two weeks. You’ll accrue prorated rent based on the number of days it takes you to sell your old house.
Once the old house sells, you use the proceeds and/or new financing — either with your own lender or Homeward Mortgage — to settle up on rent, fees, and other closing costs, purchase the new home from Homeward, and assume full ownership.
What is it? Homeward’s Buy with Cash (cash-backed offer) helps make your offer more appealing in a competitive market. It allows you to close faster and remove contingencies, which means less risk for sellers.
How does it work? Buy with Cash seems pretty much identical to Buy Before You Sell, just with different branding. You use Homeward’s cash to purchase your new home, then pay them prorated rent until you buy it back from them. The only difference is selling your own home doesn’t necessarily have to factor in.
How much does it cost? 1.9% in all states Homeward operates in. If you use Homeward Mortgage, your closing credit amount will vary by state. Some states refund the full 1.9% dropping the effective rate to 0% (aka it’s free). In other states, you get back 1%, dropping the effective rate to 0.9%. Prorated rent is 0.7% per month. You’ll also need to put down 3% for your earnest money deposit (compared to 2% for the Buy Before You Sell program).
What is it? Backed by Cash is basically “closing insurance”: Homeward backs up your offer with its cash, so if your conventional financing falls through (delays, approval, or appraisal issues), you can still close on time. It’s added assurance for the seller without locking you in to use Homeward’s cash, so you can avoid additional costs like rent.
🟡 Limited availability: Backed by Cash is currently only available in Florida, Oregon, and Washington.
How does it work? Homeward pre-pproves you up to a certain amount. You make an offer and apply for conventional financing. If your loan gets delayed or falls through, Homeward steps in and buys the house with cash. If that happens, you’ll have to pay prorated rent until you buy back the house from Homeward, just like with its other programs. If you don’t end up using Homeward’s cash, you still have to pay a service fee.
How much does it cost? Backed by Cash services fees range from 1–1.9%. If you use Homeward Mortgage, you get a closing credit for 1%. If you end up using the cash, you’ll pay the standard prorated 0.7% monthly rent.
