The COVID-19 pandemic has done a number on the real estate industry, but some risky innovators are finding ways to bloom through the muck of the chaotic market.
One such is Homeward, a proptech startup founded by Keller Williams team leader, Tim Heyl. The startup has successfully raised $20 million in equity funding and $80 million in debt amidst the financial crisis within the market.
Heyl revealed that the funding will go towards client services and secure agent partnerships. Heyl explained that most partnerships have come from outside the industry.
The Keller Williams team leader explained:
“For us, this is about putting the agent back at the center of the real estate transaction innovation. It’s something that’s very close to home for me and a mission I’m really excited about personally.”
How Homeward works is simple:
- Homeowner submits an online application
- Homeward then calculates equity with approval happening in minutes
- Homeowner makes an all-cash offer on a home with the help of a real estate agent (there is no need for the homeowner to upload a listing first)
- Homeward buys the home and leases it back to the homeowner while the agent works on selling the old home
- When the home sells, the homeowner is offered a mortgage and buys their home from Homeward at the original purchase price.
- In case the home doesn’t sell, Homeward buys it from the homeowner at a predetermined price.
- Homeward charges a 1.9% fee on the home purchased
“Our customers are able to buy their next home, move into it, move out of their old home and that way they don’t have to be there for home showings at all.
“Every single homeward customer is essentially able to avoid people coming in their house while they’re living there. It’s certainly a great solution on the safety side.”
Heyl said that currently, Homeward is only available to in the Georgia, Colorado, and Texas markets and that he is waiting to expand after the startup gains more traction.
Homeward's success coincides with a number of big-hitters returning to their iBuying schemes. Zillow, Redfin, Opendoor, and Offerpad have all decided that now is safe enough to restart their house flipping businesses. Before, iBuying looked to be in big trouble as shelter-in-place orders all but stopped real estate transactions for many home hunters around the world. Innovation has proven that these sorts of transactions are still viable, as long as they're done through an online platform.