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Financial tech start-up Ribbon is launching in Charlotte, N.C., backed in part by Trulia founder Pete Flint, offering homebuyers and sellers cash backing during the transaction process.
Shaival Shah, founder and CEO of Ribbon says, "We're the first platform that allows buyers, sellers, and realtors to participate together to guarantee a transaction," adding that the service puts buyers on a more level playing field with wealthier investors, CNBC reports. Ribbon underwrites buyers and is not a lender, and also offers temporary rent-to-own options in certain cases. Greylock, Bain Capital Ventures, NYCA, and Flint's NFX are backing Ribbon. Says Flint, "we look at it as a real estate fintech company streamlining the transaction. Consumers can look at it like insurance ... The next 10 years is going to be about the transaction."
So far, in its first month before officially launching, Ribbon executives say they have $15 million of home transactions in the pipeline and have purchased three homes so far. The risk, of course, is that while the model works well in a very hot housing market like today's, the market won't always be hot, and Ribbon could be left holding the bag, as in holding homes that are not appreciating as quickly as they are now.
