When a fixer-upper in a D.C. suburb recently went up for sale, it got 88 offers—76 of them all-cash. It ultimately sold for $185,000 over the asking price—emblematic of the current housing market. Across the country, from Georgia to Wisconsin, many houses are selling within days or even hours after they’re listed, at prices far higher than a year ago. In some cases, the buyers are investors who can pay cash. It keeps getting harder for first-time buyers to compete.
A startup called Ribbon is trying to give ordinary buyers an edge: If the buyers can’t afford to make a cash offer themselves, the company will make the cash offer for them and give the buyer time to get a mortgage. “We started the company with one mission and focus, which was helping everyday families achieve homeownership. . . . When we were looking at the problems in the market, we consistently saw situations where homebuyers who were looking to buy a home were competing in the market with big, institutional buyers,” says CEO and cofounder Shaival Shah. “Wall Street really created these engines to go out and buy single-family homes.”
The company launched in 2018 (backed by NFX, Bain Capital Ventures, Greylock, and NYCA), and the challenge is even bigger now, fueled in part by people who started working remotely during the pandemic and are moving from expensive cities to smaller cities with lower-priced homes. If someone moving from New York to Nashville or San Francisco to Charlotte can offer cash and someone else can’t, the cash offer is likely to win. That’s on top of the institutional investors who were already buying single-family homes to turn into rentals.