Fintech startup Ribbon has launched Appraisal Protection, a new service that enables homebuyers who use RibbonCash Offers to make all-cash offers without worrying about appraisal contingencies. With Appraisal Protection, Ribbon will cover the difference for under-appraised listings.

The service is available in all Ribbon markets, including North Carolina, South Carolina, Tennessee, Georgia and Texas.

Shaival Shah | Credit: LinkedIn

“We are seeing a dangerous trend in today’s market – middle-class families, especially in the starter home market, are losing out on homes to institutional investors and high net worth individuals,” Ribbon Co-Founder and CEO Shaival Shah said in a press release on Wednesday. “This has only strengthened our commitment to our mission.”

To get started, homebuyers must provide a pre-approval letter from their lender so Ribbon can determine the amount they’re willing to back them through RibbonCash Offers. After completing the RibbonCash Offers approval process, buyers can begin the hunt for the perfect home.

After choosing a home they’d like to purchase, buyers can request a Ribbon Max Value, which is the maximum purchase price Ribbon is willing to offer for that particular listing. Homebuyers can arrange an offer that is higher than the Ribbon Max Value, but they will have to cover the difference.

From there, the homebuyer can make an all-cash offer for the Ribbon Max Value amount, which allows them to make a competitive offer without an appraisal contingency. If their offer is accepted and the home appraises under the offer amount, Ribbon will cover the difference so the deal can move forward.

“Let’s say you want to make an offer on a home listed at $350,000. You request a valuation from Ribbon through our platform and we value the home at $365,000 (this is the Ribbon Max Value),” an explainer read.  “It’s a competitive market so your buyer wants to offer over list price, at $360,000.”

“If the home appraises for $355,000, usually you’d have to attempt to negotiate with the seller or walk away from the deal, however with Appraisal Protection, Ribbon will cover the difference of $5,000,” it added.

Homesellers can take advantage of Appraisal Protection through Ribbon’s buy-before-you-sell service Ribbon Boost for a 1 percent flat fee. If a seller runs into a financing roadblock, Ribbon will purchase the home through its Ribbon Reserve service for a 2 to 2.4 percent flat fee. Sellers will have 180 days to secure their financing, after which they’ll purchase the home from Ribbon for the same price.

“Appraisal Protection is one of the ways we can level the playing field and help everyday families turn their dream of owning a home into a reality,” Shah said.

Since its launch in 2018, Ribbon has raised more than $555 million from two funding rounds. The company counts Trulia co-founder Pete Flint as one of its staunchest supporters.

“Ribbon is proving that superior technology and data plus capital is what it will take to truly transform the real estate industry,” Flint said in 2019.

Email Marian McPherson

Show Comments Hide Comments

Comments

Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Success!
Thank you for subscribing to Morning Headlines.
Back to top
Last call: ticket prices for ICNY go up at midnight. Thousands of real estate pros will be there. You won't want to miss it!Register now×
Limited time: Get 30 days of Inman Select for $5.SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription