Austin Business Journal reports, "A local lender is fundraising for a new startup that aims to help address home affordability by facilitating seller financing.
MORE Seller Direct Financing was founded by Leahy Lending founder Ryan Leahy, who said the startup will show sellers and listing agents how to market lower interest rates in order to attract more homebuyers. In addition to legal, marketing and educational services, the startup will help determine if seller financing — in which a home seller and not a financial institution provides financing to a qualified buyer — is right for the seller.
He said the startup's goals include helping sellers move their homes faster and also earn monthly income to offset current or future mortgage payments. In addition, buyers may benefit from below-market interest rates through seller financing, which can make a home more affordable in an environment of elevated interest rates.
The average 30-year fixed-rate mortgage rate was 6.6% as of Dec. 12.
MORE Seller Direct Financing is in the process of raising a $1 million seed round. It has $600,000 committed and is still seeking $400,000 for a national rollout.
Providing seller financing could help widen the pool of potential homebuyers by offering lower interest rates, said Alan Ceshker, attorney and owner of Ceshker Group: Law and Title Professionals. Ceshker, who said he first began working in the seller-financing realm in the late-2000s and whose team has since closed over 15,000 seller-financing transactions, helped develop the startup’s direct-financing program.
“Offering to seller finance is going to increase your buyer base,” he said. “The big benefit, on the seller's side, is that it gets that property sold. And then on the buyer side, they get potentially lower interest rates that they’re paying, so higher buying power and getting into a house without that perceived high interest rate.”
Seller financing loans are typically short, averaging around three years, according to MORE’s website. The company also recommends buyers make a minimum down payment of 20%, and Leahy said the program is not intended for lower-end or distressed properties, with an average closed transaction price of $950,000.
But the startup offers more than just seller financing services, and if a buyer is determined to not be highly qualified, MORE will advise the seller that seller financing would be a risk and a traditional mortgage may be the better option, Leahy said.
MORE Seller Direct Financing also offers education and marketing services for both sellers and agents, legal representation and compliance, loan servicing, homeowners insurance and closing services.
It isn't the only Austin startup attempting to facilitate novel ways of buying and selling homes. Homeward, founded in 2018, offers homebuyers financing to make all-cash offers, which is a common strategy for buyers in hot housing markets, such as the Austin market amid the pandemic. Homeward had been one of Austin's fastest-growing startups, though the region's cooling housing market led to layoffs in summer 2022."
Source: Austin Business Journal
Written by: Cody Baird
Published: December 17, 2024
Posted by Grossman & Jones Group on
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