Fintech startup Ribbon has launched Appraisal Protection, a new service that allows buyers using RibbonCash offers to make cashless offers without having to worry about valuation risks. With Appraisal Protection, Ribbon covers the difference for undervalued listings.
The service is available in all Ribbon markets including North Carolina, South Carolina, Tennessee, Georgia, and Texas.
“We are seeing a dangerous trend in today’s marketplace – middle-class families, especially in the home starter market, are losing their homes to institutional investors and high net worth individuals,” said Shaival Shah, co-founder and CEO of Ribbon, in a press release on Wednesday. “This has only strengthened our commitment to our mission.”
To get started, homebuyers must provide a pre-approval letter from their lender so that Ribbon can determine the amount they are willing to support them through RibbonCash deals. After completing the RibbonCash listing approval process, buyers can begin their search for the perfect home.
After selecting a home to buy, buyers can request a Ribbon Max Value, which is the maximum purchase price Ribbon would like to offer for that particular listing. Homebuyers can negotiate a quote that is greater than the maximum value of the ribbon but must cover the difference.
From there, the buyer can submit a cash offer for the amount of the maximum tape value that they can use to make a competitive offer without the need for evaluation. If their offer is accepted and the home values below the offer amount, Ribbon covers the difference so business can continue.
“Let’s say you want to get a listing on a home that is listed for $ 350,000. You request a valuation of Ribbon through our platform and we value the house at 365,000 US dollars (this is the maximum value for Ribbon) ”, read one explanatory note. “It’s a competitive market, so your buyer wants to offer a list price of $ 360,000.”
“Typically, if the house is valued at $ 355,000, one would have to try negotiating with the seller or stepping back from the deal. However, with Appraisal Protection, Ribbon covers the $ 5,000 difference,” he added.
Home sellers can use the rating protection provided by Ribbon’s Ribbon Boost service, Ribbon Boost, before the sale for a flat fee of 1 percent. If a seller encounters a funding lock, Ribbon will buy the home through their Ribbon Reserve service for a flat fee of 2 to 2.4 percent. Sellers have 180 days to secure funding. After that they buy Ribbon’s house for the same price.
“Protecting appraisals is one of the ways we can level the playing field and help everyday families make their dream of owning a reality,” said Shah.
Since its launch in 2018, Ribbon has raised more than $ 555 million from two rounds of funding. The company counts Trulia co-founder Pete Flint among its staunch supporters.
“Ribbon proves that it takes superior technology and data plus capital to truly transform the real estate industry,” Flint said in 2019.
Email Marian McPherson