Homeward — Leveling The Playing Field For Realtors And Their Clients
The homebuying game has permanently changed. With ultra-low interest rates and a historic supply crunch, home prices are nearing all-time highs, stoking competition amongst potential buyers. Per NPR, home prices are up an astonishing 19.1% from just a year ago. If you don’t like the feeling of losing out on offer after offer for your dream home and watching another family win the day, then Homeward may be the weapon you’ve been missing. If you’re a Realtor, and this movie plays in an endless loop for you and your clients, then Homeward may be your new best friend.
Other than a high enough price, you need two things for your offer to win…. cash and speed. It really is that simple. Without those, you’ll likely lose in this market. According to a recent Redfin analysis, cash offers are 4 times more likely to win than financed offers. And if your offer is a week late due to the red tape of getting a financing commitment, forget it.
I spent a lot of years in this world before becoming an investor (see my background in my last post). I can tell you with certainty that these are the core pain points that prevent millions of families from attaining their dream homes, and this reality reinforces a system that unfairly penalizes anyone who does not have a large, liquid bank account. In fact, Zillow Group’s analysis showed that 43% of home buyers have no choice but to sell their current homes first — usually in a very rushed, unoptimized transaction — before being able to make an offer on a new one. Millennial buyers, who are beginning their first home searches, are also unfairly penalized by their likely inability to make an all-cash offer.
It’s an enormous problem in a trillion-dollar industry, and Javelin wants to solve it. That’s why we joined Adams Street and LiveOak in investing in Homeward during its $20M Series A last year and just doubled down in their $136M Series B led by Jeff Crowe at Norwest, who has substantial and highly relevant experience in both real estate and fintech.
Homeward provides realtors and their clients the ability to make a speedy cash offer with a one stop shop homebuying platform. Vertical integration reduces back-office costs, and the savings are passed onto the consumer. Bundling also eliminates the need for numerous touchpoints and handoffs between multiple disparate parties. The consumer gets a seamless experience and a shot at their dream home. Homeward is not an iBuyer trying to arbitrage the market. Homeward uses technology to integrate cash offers, financing, and title, saving homebuyers time, effort, and money.
Homeward buys the new house and customers rent directly from the company until they are able to finalize their mortgage and buy it back from Homeward. This helps to eliminate costly double moves for most homeowners. Homeward’s solution is elegant, quick, simple, and fair. And most importantly, Homeward doesn’t do anything to compete with agents — instead it supercharges them and is often embedded directly into their systems. Agents can help their clients make timely, all-cash, competitive offers. And their clients are much more likely to win, with their favorite realtor guiding them through one of life’s biggest purchases. It’s inevitable that the top realty firms will work with Homeward, as a no-brainer, win-win for them and clients alike.
Homeward’s backend is a data-driven underwriting engine that analyzes financial, property and transaction information, resulting in high approval rates and low loss ratios. Customers go through full mortgage approval with credit, income and asset reviews, and the eligibility of their existing home is checked. It’s secure, highly scalable, and well proven through a large number of transactions.
Tim Heyl, Homeward’s founder/CEO, is the type of entrepreneur we love to bet on. He possesses deep domain expertise, having founded the Heyl Group, a top five producer for Keller Williams nationwide and Austin’s top residential real estate team for 4 years running. He was also named Inman News Innovator of the Year in 2019. Tim is super smart, has the energy and drive to conquer this problem, and is an all-around great human. He can clearly see the perspective of the agent, home buyer and even the seller, and understands what needs to be done to fix this broken system. Homeward’s executive team includes real estate, mortgage and fintech veterans hailing from Better.com and RetailMeNot. Their operating excellence has resulted in truly torrid growth and product expansion over the last few years. This is a complex business to build, and the team has excelled at scaling and tying together all the different elements. It’s been a pleasure to work with them on this!
With their new capital, one of the largest Series B raises in Texas history, Homeward will scale service and support to meet market demand. They’ll also expand to many more geographies and work with even more top realty firms around the country. Remember Homeward when you’re looking for your possible dream home, and wondering how you’re going to make sure that your offer is the one the seller accepts!
-Jed Katz and Vivian Cheng