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Nested - Start Up , property online disruptor to quick sale homes ?

Nested online property Disrupter ?

A start-up that promises to sell a house in 90 days, or buy the property itself, has been backed by a group of tech investors including the founder of the loans company Wonga.


wonga no straight talking 

Errol Damelin , who left the payday lender two years ago, is among a group that has invested £700,000 in Nested, an early-stage company launched by the entrepreneur Matt Robinson.


Errol Damien, ready to change the real estate goal posts ?


The internet-based property company says it is looking to shake up the UK’s housing market by making it easier for people to sell their homes and find better prices.

It plans to give customers a valuation, and sell their home at or above that price within three months, taking a 2% commission on the valuation price and 20% of the difference above that value. If it is unable to sell, Mr Robinson said, Nested would buy the house itself and then sell it on.

The start-up  firm is in advanced talks to secure £5m in debt financing and plans to sell its first house when it launches in June.

Backers 

Mr Damelin left Wonga in 2014 and previously backed the online estate agent Purplebricks before it floated last year. 

He joins backers including Balderton Capital’s Tim Bunting and Google Ventures’ Tom Hulme, who are investing "personally in the venture".

Mr Robinson, who co-founded the UK payments company GoCardless before leaving last year, said his new company wanted to channel the success of Opendoor.com, a US start-up that has raised more than $100m. 


Strong Appetite in US 

There are big names who have invested in Opendoor [Paypal co-founder Max Levchin, Former YouTube and Facebook CFO Gideon Yu, Eventbrite co-founder Kevin Hartz, Y Combinator’s Sam Altman, Quora CEO Adam D’Angelo, Yammer co-founder David Sacks, Angelist’s Naval Ravikant, Yelp CEO Jeremy Stoppelman, Box CEO Aaron Levie, Initialized Capital’s Harjeet Taggar, Garry Tan and Alexis Ohanian, Former Twitter vice president Elad Gil, Blippy co-founder David King, Flixster co-founder Joe Greenstein, Angel investor Mike Greenfield, Quora co-founder Charlie Cheever, Path’s Dave Morin, Facebook vice president Dan Rose, Trevor Traina, Resolute Ventures’ Mike Hirshland, Caffeinated Capital’s Ray Tonsing, Felicis’ Aydin Senkut, True Ventures’ Om Malik, Thrive Capital’s Josh Kushner, Crunchfund’s Michael Arrington (who disclaimer: founded TechCrunch) and SV Angel.]


Opendoor: Sold. The minute you're ready.


He said Nested would appeal to sellers who want a guarantee that they can sell their home, such as those in chain transactions, and that unlike typical estate agents, its fee structure meant that the company was incentivised to get the best price.

In the US there are quite a few people who see an opportunity in the $20 trillion US residential real estate market – which I think is a good thing. This is a space that–despite its size–hasn’t seen an awful lot of innovation.

Whether or not the "market fit" in the UK is comparable, remains to be seen , as there is a higher  percentage first time buyers, to home sellers ratio currently.

Secondly, 2 percent is a very high for the UK ,considering rise in online estate agents , who charge a fixed fee in the mid to high hundreds of pounds,  [ in the US glassdoor charges 6% making though there is no competition from online estateagents ]  


A strong rebuttal by Carney that BoE has no intention of raising rates short term ,also makes this less likely proposition, moving forward.

Interest rate rise would put many more in trouble, with almost 60% saying they are already struggling ,to meet housing costs , if this is what they are gambling on it will be interesting to see public perception moving forward. 

Already a Crowded market ?

Add to a crowded market of sell your homes fast .These companies offer to either buy your house or find you a third party buyer very quickly, and pay cash for your property, usually at a discount from the full market value.There are more than 100 firms to choose from in the “quick house sale” market, all offering to buy property or find third-party buyers. In return, the vendor agrees to sell at a reduced price, usually forgoing between 10pc and 25pc of the property’s market value.


webuyanyhomes

Pros



  • They can provide a useful service for homeowners who need to unlock cash in a hurry. 


For example to:

  • avoid repossession, clear debts or sort out financial problem
  • dispose of inherited property
  • move for age or health related reasons
  • sell as a result of divorce or relationship breakdown
  • relocate due to a change of job or to emigrate
  • try a different route if unable to sell through a traditional estate agent – get around issues that have made a property hard to sell, for example with a short lease or if a property has a high risk of flooding


Cons

  • some companies agree to buy a house, but then reduce the price at the very last minute
  • fee structures are not always made clear to the customer
  • some companies make false property valuations
  • some contracts tie customers in, preventing them from selling to anyone else who might come along with a better offer


Unscrupulous Traders

Not all are Unscrupulous , as the market has regulation through the orgs like property obudsman though,

Cases were vendors signed a deal with a quick house sale company agreeing a purchase price of £75,000, but the day before the removal men were due to arrive, the company lowered the offer to £40,000.[BBC 2013]


some sellers are losing up to 53pc of their property value.[Telegraph 2013



Office of Fair Trading report Quick House Sales [2013]




Errol Damien went on to say  

“What we want to do is give those people certainty, a concrete promise they can sell their house,” he said. “There’s a massive company to be built here, even if it’s only one in 10 sales.”

Ultimately the consumer, coupled with market conditions, will decide the traction of start up nested success.

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