By John Voket
We bring you important points in housing each week—and this week (literally!) is no exception.
A new startup, Point (Point.com), aims to make homeowners free of debt and able to unlock the wealth in their home—but to do that, a homeowner must sell a portion of the equity in his or her home to Point’s investors.
How does it work? A homeowner provides some basic information about their home and household finances. Point instantly assigns homeowners pre-approval or denial based on the information they provide.
If pre-approved, Point provides a provisional offer based on the data provided—that offer is typically for between 5 percent and 10 percent of the home’s current value. To be eligible for Point, the owner(s) need to retain at least 20 percent of the equity in their home after Point's investment. The homeowner then completes a full application and provides documentation for the Point underwriting team.
Within approximately a week, Point will schedule a home valuation visit, which the homeowner covers— generally between $500 and $700. Once the valuation is complete, Point will share the appraiser's report with the homeowner.
If the valuation is deemed acceptable by the homeowner, Point will finalize the offer following the appraisal and receipt of all supporting application documents, and call the homeowner to meet with a notary to sign the Point Homeowner Agreement.
Point then files a Deed of Trust and Memorandum of Option on the property in the county recorder's office. Once filings have been confirmed, Point transfers the offer funds (with less than 3 percent escrow and processing fees) electronically to the homeowner’s bank account.
If the homeowner sells his or her home within the agreed-upon terms, then Point will be automatically paid from escrow. If the homeowner does not sell his or her home, he or she can buy back Point’s stake at any time during the term, at the then-current appraised property value.
Would you sell part of your home to investors?
Nancy M. Alexander Stone Harbor and Avalon NJ Real Estate, Long & Foster Avalon
