Real estate fintech offers guaranteed price floor that lets home shoppers buy first and sell later
Article content continued
Ruparell, who worked in private equity at the Canada Pension Plan Investment Board and was involved in a number of startups before co-founding Properly in 2018, said the company’s pitch has attracted some clients specifically due to concerns about the COVID-19 pandemic. He said a couple that moved from a condominium in Toronto to a bigger home in Niagara, for example, didn’t want to let anyone into the condo because the wife was pregnant.
But he said the business model, which has drawn more than $15 million in venture capital and a dedicated pool of capital “many times larger” to fund home purchases, isn’t dependent on the pandemic.
Another enticement Properly offers sellers is the firm will cover any mortgage payments due on the old home once the seller assumes a mortgage on their new home. Ruparell says this money would come out of Properly’s five per cent commission, rather than the portion of the ultimate sale price of the home that goes to the seller.
“We are comfortable covering this cost, which … wouldn’t be done in a traditional transaction,” he said, noting the average Toronto home is selling within 17 days of listing.
If a home doesn’t sell in 90 days, the seller and Properly split any proceeds above the startup’s guaranteed price on an eventual sale on the market, with the client getting 90 per cent of the difference, Ruparell said, adding the majority of clients sell on the open market.
His partners in the Toronto-based startup that also has operations in Calgary include Research In Motion veteran Craig Dunk and Sheldon McCormick, who helped Uber expand in Canada.
Financial Post
• Email: [email protected] | Twitter: BatPost
