Market Problem:
In residential real estate, existing homeowners face a major disadvantage in a competitive seller’s market. Conventional loans require paying off the current mortgage before closing on a new home, making these buyers less attractive due to the contingency.
Selling their current home becomes the only option, but coordinating two large, complex financial transactions across multiple parties introduces friction and inefficiency across the entire market.
Who’s it for:
Homeowners looking to upgrade, downsize, or reduce stress in their next move, and the real estate agents who advise them
What we did:
We designed and launched a private loan product that allowed buyers to show their current home as free and clear of financing. This removed the contingency from their offer on the new home, enabling them to access better financing options and effectively act as cash buyers.
To make the product work, we built a relationship with a local bank to support loan origination and secured approval from major mortgage wholesalers. We then launched a go-to-market strategy focused on partnering directly with real estate agents in the Minneapolis–St. Paul area, giving them a flexible option for clients in tight markets.
We iterated on the loan structure to reduce risk for funding partners and simplify the process for borrowers. This included creating a strong online presence and sales collateral to clearly communicate our differentiators to both agents and homeowners. The loan initiation process was also automated across systems to reduce labor and improve efficiency.
Success metrics:
- More than 500 loans initiated over a two-year period
-
150 percent year-over-year growth in loan volume
- Less than 1 percent breakage rate