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Setpoint, the company building the infrastructure for modern real estate transactions, today announced the general availability of its flagship technology platform which, combined with the company’s $615 million in debt capital, enable proptech companies to offer their customers frictionless home buying and selling options including contingent-free all-cash offers. Leading proptech innovators including Homeward, Flyhomes, Reali, and Houwzer are already using Setpoint’s platform to offer lightning-fast purchasing options to their customers. Setpoint is on track to help power 25,000 home transactions in 2022.
Setpoint’s SaaS platform enables proptech companies to accelerate funding and closing on properties, which ultimately helps more Americans succeed in buying and selling homes — especially in a hypercompetitive marketplace. Setpoint’s backend platform includes a suite of streamlined workflow tools that accelerate document collection and verification, automate manual closing processes, and boost transaction throughput while reducing overhead. In addition, the company is lending $615 million in bridge capital to empower proptech companies to effortlessly purchase or finance properties on behalf of their customers. Together, Setpoint powers the “Buy with Cash” and “Buy Before You Sell” purchasing options that are trademarks of alternative real estate models including “Power Buying”, “iBuying”, “Fractional Ownership”, and others.
“Setpoint has enabled Flyhomes to improve closing times without relying on rigid, expensive sources of capital,” said Ryan Dibble, COO at Flyhomes. “Further, with Setpoint’s technology, Flyhomes is able to fund transactions in a matter of hours, not days or weeks. The platform’s speed and ease of use is unparalleled.”
“Setpoint is exclusively focused on modern real-estate transactions like bridge funding, fractional ownership, and home equity platforms. We’ve developed our tools from the ground up for proptech companies interested in offering more innovative services,” said Stuart Wall, co-founder and CEO. “As both a technology provider and lender we are in a unique position to improve how these transactions work. We’ve been able to streamline the closing process — which previously took weeks — to as little as 40 minutes once the parties are in-contract.”
Setpoint has enabled Flyhomes to improve closing times without relying on rigid, expensive sources of capital, COO at Flyhomes
Ryan Dibble, COO at Flyhomes
Setpoint's technology platform is purpose-built for proptech companies and other providers of alternative real estate transaction models to help manage lender requirements. With Setpoint, these companies can:
- Collateral Management: Track assets and store property collateral at every stage of the closing process. Documents are stored in the cloud and all parties - borrowers, lenders and custodians - can access collateral from Setpoint's centralized repository.
- Document Verification: As a third-party verification agent, Setpoint combines human review with optical character recognition (OCR) to continuously and more accurately verify documents.
- Treasury Services: Draw funds daily from Setpoint's platform with automated wire transfers to escrow (or any funding account). Financing is no longer a barrier to closing and borrowers do not need to rely on expensive equity while unlocking debt capital.
- Facility Management: Monitor credit concentration limits and automate borrowing base calculations on Setpoint's software. Borrowers and lenders can view asset-specific and portfolio-level risk insights.
- Expedited Valuation: Request and receive property valuation assessments or estimates from Setpoint's platform in record time.
Setpoint’s technology and capital enables us to make contingent-free cash offers faster so that our customers beat the competition. Before, we didn’t have software to manage the operational workflow to scale our power buying services. We also could not access flexible capital to finance these transactions,” said Patrick McPhee, Senior Manager, Financial Planning and Analysis at Homeward. “We now have a platform that is super easy to use as well as fast capital that automatically finances our cash offers. Our team saves time, money, and stress, which is increasingly important as we scale.”
American homeownership — and upward mobility — is undermined by an outdated lending system that favors the wealthy. Setpoint powers a new way forward.
The U.S. housing market shifted into overdrive during the pandemic, with more than 6 million homes selling in 2021 despite skyrocketing prices in many cities. U.S. home prices rose 18.8% in 2021, the biggest yearly increase in 34 years and the median selling price for a home in November — $416,900 — was nearly 25% more than it was in February 2020. This is due in part to an increase in wealthy real estate buyers and investors willing to pay upfront in cash. All-cash offers are typically the fastest means of acquiring a property since they don’t involve a mortgage nor are they contingent on the buyer selling their current home.
According to data firm CoreLogic, investors made 27% of all single-family home purchases in the first three quarters of 2021 (up from just 17% at the end of 2019) while the National Association of Realtors estimates that all-cash offers accounted for 23% of existing home purchases in 2021, roughly $518 billion of the total $2.25 trillion in existing home sales. In hyper-competitive markets, all-cash offers play an outsized role: roughly 70% of homes in Atlanta, Georgia were sold with all-cash offers in the first quarter of 2022. As interest rates climb and mortgages become more expensive, all- cash bidders stand to benefit while homeownership — the most common pathway for wealth generation and upward mobility — slips even further out of reach for millions of Americans.
“Generally, properties go to the highest bidder with the most liquid access to cash. As a home seller, taking quick cash is always more desirable than contingent offers that take more time and involve more risk,” said Ben Rubenstein, co-founder and President at Setpoint. “Setpoint streamlines the process of buying and selling homes, enabling a stronger pathway to wealth generation for Americans. This is fundamental to the American dream of homeownership as well as critical to upward mobility. Setpoint provides both the tech and the capital to proptech companies that offer all-cash options, which makes it possible for any prospective homebuyer to compete with the biggest and richest corporate buyers or investors.”
“The mortgage industry provides low-cost financing to millions of Americans, but it’s slow, complicated, and less desirable to sellers. In a normal market, the process of securing a mortgage takes about a month, but during high-volume months, it can take 45 to 60 days or more, depending on the lender. This creates an uneven playing field for buyers. Alternative models emerged to solve this,” Wall said. “However, early proptech innovators faced an uphill battle: they had to create their own capital markets teams; negotiate bespoke deals; and rely on spreadsheets to conduct funding and operations. Setpoint provides out-of-the-box infrastructure, enabling proptech companies to focus on delivering value to customers, from bridge financing to ibuying to home equity. We believe modern real estate financing products will make buying or selling a house faster, easier, and more accessible to everyone.”