A new Australian property fintech startup is promising to buy its customers' home if it doesn't sell.
Brickfloor offers what could be described as "insurance" for Australians wanting to sell their house or apartment.
As soon as a home seller expresses their interest, the startup performs research and analysis on the property – then within three days offers a price to purchase the property.
If the homeowner is happy to accept Brickfloor's guaranteed price offer, the company will perform some due diligence like pest and structural inspections.
If all that goes well, the homeowner runs a sales campaign with an agent as usual. If it fails to sell for higher or equal to Brickfloor's offer, the startup will purchase the property.
The scenario is currently offered to homeowners in Sydney and Melbourne, for residential properties within the range of $350,000 to $2,500,000.
Brickfloor founder and chief Dean Fraser said the service would allow Australians to buy their new home with certainty that their old house would be sold.
"Feedback has been incredibly positive with our customers describing the product as ‘a gamechanger for sellers’ and ‘a revelation’," he said.
"Buying first is a great strategy in a rising market, but our research shows less than 20 per cent intend to do this because of uncertainty around the sale process."
The startup makes money in two ways:
It charges a 2 per cent commission on the sale price, regardless of who ends up buying the property.
The purchased properties add to its investment property portfolio.
According to the company, 20 per cent of its investment portfolio would be rented out as affordable rental properties.
While Brickfloor itself is independent, it has received funding from ANZ Bank's startup investment arm ANZi Ventures. It has three big names on its advisory board – former Stockland chief executive Matthew Quinn, former ANZ chief economist Saul Eslake and Flight Centre co-founder Geoff Harris.
Fraser was a former investment banker, lawyer and chief financial officer at ASX-listed company Food Revolution Group Limited.
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