A remedy for homebuyer’s remorse: Real estate startup Flyhomes today unveiled a new offering called Flyhomes Guarantee for Buyers that gives clients a way to move out of a home they recently purchased. It’s the latest idea from the Seattle company, known for helping people purchase houses directly with cash.
How it works: If a Flyhomes buyer decides they want to move out within a year of closing, Flyhomes will list the home and waive its commission. The client will still need to pay the buyer’s agent when the home sells, in addition to excise taxes and seller closing costs. The idea is to help buyers ease anxiety when purchasing a home, particularly in today’s competitive market with homes selling quickly. Other real estate brokerages also offer similar guarantees.
Flyhomes background: Founded in 2016, Flyhomes has helped more than 3,000 families buy nearly $3 billion worth of homes.
Its cash offer program presents customers as the equivalent of cash buyers, which sweetens the deal for sellers by removing uncertainty and can give Flyhomes’ buyers an edge. Buyers secure a short-term loan from Flyhomes, which provides the cash until its clients finalize their long-term mortgage. Flyhomes says it does not make money on the short-term loan, which carries an annual interest rate of about 6%. Buyers also pay closing costs when they refinance out of their short-term mortgage.
A majority of the company’s revenue comes from agent commissions.
The 450-person startup also offers mortgage services and has a Buy Before You Sell program that helps sellers buy and move into their next home before selling their current property.
Flyhomes faces stiff competition from both traditional brokerages and new tech-fueled “iBuyer” services operated by online companies such as Opendoor and Offerpad. There’s also Zillow Group, the Seattle-based industry giant that has been touting a similar message to Flyhomes over the past few years as it evolves from a media-focused search hub to being involved with the actual transaction, investing heavily in its iBuyer service Zillow Offers and growing its mortgage arm.
Flyhomes is currently active in five states. The company is led by CEO and co-founder Tushar Garg. It has raised more than $200 million to date, including a $150 million Series C round in June. Investors include Norwest Venture Partners, Battery Ventures, Fifth Wall, Camber Creek, Balyasny Asset Management, Andreessen Horowitz, Canvas Partners, and former Zillow Group CEO Spencer Rascoff.
Source : https://www.geekwire.com/2021/real-estate-startup-flyhomes-aims-address-homebuyers-remorse-new-guarantee/