Photo: James Bombales

A Canadian real estate tech company has rolled out an innovative buy before you sell service that it says will allow its clients to confidently and seamlessly purchase and move into a new home before they even list their old one.

Pitched as a “home upgrade,” Properly launched the new service for Toronto homeowners on Tuesday, along with a partnership with CIBC, that sees the bank offer mortgage advice and financing options to the tech company’s clients.

Founded in Calgary in 2018 and headquartered in Toronto, Properly initially focused on supporting home sellers with an instant buying model. Clients sold their homes directly to the company at a fair market price instead of listing on the open market.

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Through its newly launched home upgrade service, Properly will provide Toronto house hunters with Sale Assurance on their current home, enabling them to unlock that home’s equity while searching for a new one. It marks an evolution in the firm’s position in the market, allowing it to support both sides of the real estate transaction.

“We want to take the innovation a step further, and actually integrate within the transaction itself and create a fundamentally different and improved experience for those that are going through, for many people, what is one of the most significant milestones in their life,” Properly co-founder and CEO Anshul Ruparell told Livabl.

The new service aims to solve a long-standing challenge in residential real estate that often finds home shoppers feeling pressured to sell their old home before making an offer on a new one to avoid being saddled with two mortgages. Ruparell explained that this risky aspect of the process makes it difficult for sellers to pursue their dream home without knowing how much their current property will sell for, and when.

“That problem creates a bit of a paralysis for people where it becomes very difficult to have the confidence you need to make an offer on a home that’s hit the market that you love,” he said.

Image: Properly

Using machine learning and a treasure trove of data, Properly determines the estimated sale price for a client’s home and presents them with their Sale Assurance value. The Sale Assurance value is custom-calculated for each home using a combination of proprietary modelling and market expertise. It’s set at a value that allows clients to unlock the highest possible amount of equity, while minimizing the chance that Properly will need to purchase a client’s home.

Once the client puts an offer on a new home, the Sale Assurance agreement and new home contract can be taken to the client’s bank as part of the mortgage approval process. The bank will finalize the client’s new mortgage and provide a bridge loan that covers the amount of equity that will be unlocked with sale of the former home.

Once the client moves into their new home, licensed Properly agents will work to sell the former home, with the firm covering any mortgage and bridge loan costs incurred on that home during the process. In the rare event that the home doesn’t sell within the bridge loan period, Properly will buy it directly from the client at the Sale Assurance value, less a standard 5 percent commission.

Importantly, the service eliminates the hassle of coordinating and preparing for showings, a process that home sellers typically find burdensome, especially during the ongoing COVID-19 pandemic, Ruparell explained.

A Toronto couple used Properly to sell their Leaside condominium and move up to a larger detached home in the Niagara region. Balancing a new work-from-home situation, along with having their first child on the way, the couple required more space and felt that their needs were quickly changing, said Ruparell. However, when they found a new home in Niagara that fit the bill, the pair still hadn’t started the process of selling their condo yet.

Photo: Patrick Tomasso / Unsplash

“They weren’t in a position to make an offer until they came to Properly,” said Ruparell. “They met with Properly [and] we were able to provide them with Sale Assurance on the home, which allowed them to have the confidence necessary to make an offer.”

After viewing properties with a Properly partner agent and arranging financing after the new home offer was accepted, the couple sold their old condo in eight days for $99,500 over the Sale Assurance value.

While Sale Assurance is accepted at any financial institution, the firm has a partnership with CIBC, which will see the bank offer mortgage approval and advisory services to Properly clients.

“We’re quite excited by CIBC being so willing to work with us and our customers, as an acknowledgement for both the need for innovation in the industry and the fact that even large banks like CIBC are willing to play an active role in facilitating that change,” said Ruparell.

The firm has also expanded the buy, move, then sell service to qualifying clients in Ottawa. Alongside the newly launched service, Properly provides listing search tools and the ProperPrice™ Report, which delivers an instant home value assessment and neighbourhood property comparables information.

Ruparell hopes the firm can bring greater transparency to the home buying and selling process, empowering their clients to make smart, informed decisions about their purchases.

“It’s still very much day one for us, and also for the evolution of this industry. I think that there’ll be a lot of exciting changes to come in the months and years ahead,” he said.

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