UpEquity Offers Buy-In-Cash Service in California
Power buyer UpEquity kicks off the new year by making its digital mortgage platform available in California, allowing homebuyers in competitive markets to take the edge by offering all-cash deals.
UpEquity is now licensed in 11 states – Arizona, California, Colorado, Florida, Georgia, Idaho, Illinois, Oregon, Pennsylvania, Tennessee, and Texas – and plans to add eight more states in 2022.
Co-founded in 2019 by Tim Herman and Louis Wilson in Austin, TX, UpEquity announced in October a $ 50 million Series B funding round, bringing the total raised to date to $ 77 million.
Announcing the availability of its Buy with Cash service in California, UpEquity said it is “expanding rapidly into new markets” by obtaining licenses and expanding its partnerships with realtors in new states, and by launching localized marketing campaigns to raise awareness in large metropolises.
UpEquity allows clients to work with the real estate agent of their choice and does not charge fees for their Buy Cash service other than the usual costs associated with a mortgage-backed home purchase, such as appraisals, taxes and closing costs. The business bears the risk of having to buy a home if the client withdraws through the commissions it earns from brokerage or selling the mortgages it has taken out.
In states where purchase contracts are transferable, UpEquity provides financing without contingencies, without actually purchasing the home up front. In states that do not allow transferable purchase contracts, the business purchases the house in advance and then provides the mortgage.
Seattle-based rival Flyhomes recently announced that it would help cover expenses like title insurance and appraisal fees on its short-term bridging loans, but only when homebuyers are working with a Flyhomes brokerage agent. Homebuyers represented by other agents pay closing costs and may also have to pay a 1% convenience fee if they get their permanent financing from another lender.
Powerful buyers like Knock, Homeward, Orchard, Ribbon and Reali say they can “turn any buyer into an iBuyer” with their cash offer and “buy before sell” services. The mechanics of the process – including financing methods (conventional loan, equity advance, purchase then redemption), transaction costs (fixed costs or percentages plus closing costs) and ancillary functions (valuation protection, guarantees inspection, preparation for sale) – may vary from company to company.
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