53
AN ALL-CASH BUYER
WITHOUT ANY CASH
WHO THEY ARE
WHAT THEY WANTED
WHAT THEY GOT
HOW THEY DID IT
On Dec. 27, 2021, JOhn LenOir was ceLe-
brating his 31st birthday at home in Austin
with his wife Sarah LeNoir. Over a couple of
beers and chicken korma, the subject of buy-
ing a house came up. Curled up on the sofa,
Sarah scrolled through Zillow listings on her
phone and started to imagine the impossible.
“It’s been something that I personally did
not believe was plausible,” says Sarah, 29,
who works in nonprofit management. But
that night Sarah saw a crack opening, one that
might be large enough to squeeze through.
The couple was chipping away at $18,000 in
credit- card debt, and they’d had a two-year re-
prieve from $600 monthly student- loan pay-
ments because of the federal pause on them.
Feeling giddy, they logged on to a local
credit union’s website and applied forpreapproval for a mortgage. A week later they
learned that they qualified for a $300,000
home. But $300,000 doesn’t go very far in
Austin, where the typical home value was
$681,000 in April 2022, according to Zillow.
In late February, a house came on the mar-
ket in Kyle, about 30 minutes south of Austin.
Listed for $280,000, with three bedrooms and
two baths, it seemed within reach. But in less
than 24 hours on the market, it had multiple
offers. They called their credit union and got
the green light to raise their borrowing limit.
But to be competitive, they needed to offer
more than preapproval on a Federal Housing
Administration loan. So they turned to Open-
door, one of a number of startups that help
buyers make cash offers. In this case, Open-
door would buy the home and sell it back to
the LeNoirs at the same price. To qualify, they
had to use a real estate agent affiliated with
Opendoor, so the company would get the com-
mission. Even without up-front costs, there
were risks. If they backed out after the close,
the company would keep their escrow deposit,
and it could charge them if they took too long
to transfer the property to their name.
But before this could even happen, the cou-
ple needed cash to set aside in an escrow ac-
count if their offer was accepted. And in Feb-
ruary, they had less than $2,000 in the bank.
“I got spooked,” Sarah says. “I don’t want to
make this offer and then not have the money.”
Cash for the 3.5% down payment required
for FHA loans would be coming. John, a super-
visor at an insurance call center, was expecting
a bonus, and they planned to supplement that
with a loan against his 401(k). Home buyers
can borrow up to $50,000 or 50% of the bal-
ance of their 401(k), whichever is lower, but
must pay back the money with interest and
cannot contribute to their 401(k) until the debt
has been repaid. But neither sum was in hand.
Their agent called the seller’s and explained
that the LeNoirs could put only $1,200 in es-
crow, far less than is typical. The seller’s agent
told them to put in an offer anyway. That night,
before they’d ever seen their house, they of-
fered $319,000 for it. The next day, they went
to see what they’d just bid on. Sarah was smit-
ten by the trapezoidal kitchen and large yard.
“We were on pins and needles,” Sarah says.
The next day, their offer was accepted.
Opendoor closed on the sale within 30 days.
Before the couple’s lease expires this summer,
they’ll buy it back at the same price—or they’ll
forfeit the $1,200 they put down. For now, they
drive by frequently, waiting for the day they
PREVIOUS PAGES AND OPPOSITE: CHRISTOPHER MORRIS—VII FOR TIME; THIS PAGE: BRENT HUMPHREYS FOR TIME can call the little house in Kyle home.