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Less than two months after announcing layoffs of one-third of the company’s workforce, power buyer Ribbon is back in expansion mode, bringing its cash offer solution to Illinois and Michigan.
With the addition of those new markets Ribbon is now in 17 states, and the company says it’s still on track to meet a goal of being operational in half of the U.S. by the end of the year.
Ribbon is an “open power buyer” that partners with real estate agents and lenders, allowing homebuyers to waive mortgage, appraisal and home sale contingencies by making cash offers of up to $1 million with Ribbon’s backing.
In many cases, Ribbon will enter new markets by partnering with a real estate brokerage or lender as an initial launch partner, while also working with other real estate agents and lenders.
In Illinois, Ribbon announced Thursday that it’s partnered with Fairway Independent Mortgage Corp., a national lender which has branches throughout the metro Chicago area and in Champaign, Columbia, Effingham, Moline and Peoria, Illinois.
“Fairway’s CashReady program, in partnership with Ribbon, changes the game for buyers and agents across the region,” said Fairway Branch Manager Michael Facchini, in a statement. “An all-cash offer that is guaranteed to close, providing our clients the option to buy before selling their current home, means our buyers don’t have to wait until they sell to begin looking for their next home. It’s a big win for both buyers and sellers.”
In Michigan, Ribbon is partnered with Amerifirst Home Mortgage, a national lender which has more than a dozen branches in Michigan in cities including Battle Creek, Benton Harbor, Brighton, Grand Rapids, Kalamazoo, Port Huron and Traverse City.
Ribbon’s contingency-free all-cash offers “can help increase homebuyer competitiveness in the market while helping our agent partners secure more wins,” Amerifist Home Mortgage Branch Manager Katie Lawrence said, in a statement. “RibbonCash Offers give Amerifirst loan officers another competitive resource, which triples local homebuyers’ chances of winning their bids.”
Ribbon has multi-state partnerships with Amerifirst and Fairway, a spokesperson for Ribbon said.
Power buyers like Ribbon thrived during the pandemic when sellers were often inundated with offers from multiple buyers including institutional investors. By enabling ordinary homebuyers to make contingency-free cash offers, power buyers promised to level the playing field.
But this year’s rapid run-up in interest rates has cooled home sales in many markets and made venture capital funding harder to come by, leading many lenders and power buyers to downsize including:
- Power buyer Knock announced layoffs affecting 115 employees in March or about 46 percent of its workforce.
- Agent-matching service HomeLight announced job cuts affecting about 19 percent of its workforce in June — just days after announcing $115 million in new funding and an agreement to acquire cash offer provider Accept.inc. HomeLight said the deal made it the largest “agent-focused” cash offer program in the U.S.
- Seattle-based end-to-end homebuying services provider Flyhomes laid off 20 percent of its workforce on July 20, citing “the largest interest rate hike in nearly 30 years” and its impact on housing demand.
- California-based real estate brokerage and power buyer Reali announced Aug. 24 that it was shutting down entirely, citing “challenging real estate and financial market conditions and [an] unfavorable capital-raising environment.”
Just days after publicizing launches in Colorado and Kentucky, Ribbon announced on July 28 that it was laying off 136 employees, or about one-third of the company’s workforce. But Ribbon, which announced a $150 million Series C raise in September 2021, said the layoffs would help the company achieve profitability and that it still planned to expand.
“We are working closely with our partners and will continue to open new states and go deeper into existing states,” Ribbon co-founder and CEO Shaival Shah told Inman at the time. “We are working with our partners’ revised market and time needs.”
In Colorado, Ribbon announced on July 11 that it was partnering with national mortgage lender Synergy One Lending to provide “CASH Advantage Powered by Ribbon” in Denver, Colorado Springs and Fort Collins. Ribbon’s tools are available to other real estate agents and lenders, meaning homebuyers can work with any lender of their choosing.
Sean Black and Drew Uher, founders of Knock and HomeLight, are also optimistic about the future of power buying services.
Sharing the stage at Real Estate Connect Las Vegas in August, Black and Uher agreed with Era Ventures Managing Partner Clelia Peters that five years from now, “every buyer will be a cash buyer,” and buy-before-you-sell power buyer services will be “much more broadly used.”
Editor’s note: This story was updated on Sept. 16, 2022 to note that Ribbon has multi-state partnerships with Amerifirst Home Mortgage and Fairway Independent Mortgage Corp.