Frequently Asked Questions
General Questions
Homeowner Questions
Buyer Questions
Is there a maximum amount a buyer may purchase? Is there a minimum?
The maximum fraction in a particular property a buyer may purchase is only limited by the amount the homeowner is willing to sell. The minimum fraction amount is $1.
What fee does the Buyer pay?
The fee on the buy side is 0.5% of the value of the transaction, with a $0.25 minimum fee. For example, if you buy $500, then the fee is $500 x 0.5% = $2.50.
What do buyers have to provide to purchase property fractions on SmartRE?
SmartRE requires that buyers submit the usual personal information plus one picture of a government-issued photo ID, a selfie of them holding the photo ID near their face, and a proof of address (examples include an utility bill, a credit card bill, mobile phone bill, etc.).
What is the buying process and how long does it take?
When a buyer sees a property in which the buyer is interested, she then pays for the amount of the fraction she would like to purchase. It may take up to a month to achieve the requested percentage that the homeowner wants to sell. If after the listing period the requested percentage is not achieved, the homeowner can call off the sale and the amount paid by the buyer is returned.
How does a buyer sell the percentage? Is the buyer stuck until the property is sold?
The buyer can advertise and sell the amount of the percentage she has purchased to other buyers on the platform. It is similar to selling digital goods on any regular auction site.
How are buyers protected?
All properties must have homeowners insurance. In addition, properties listed on the SmartRE platform are assured by a customized policy to protect the percentage purchased. Should anything happen to the property, the policy will cover the value of the fraction purchased by the buyer. Finally, because the amount sold is less than 50% of the equity owned by the homeowner, the probability of malfeasance is very low as the homeowner still has incentive to protect her equity.
Why would a homeowner use SmartRE?
All other ways homeowners can extract money from their home involve debt, scheduled repayment, more than $1 in equity taken for $1 given, and/or interest rate sensitivity. With SmartRE, a homeowner does not have to worry about any of these issues. We are committed to fairness for both buyers and homeowners. By the way, a lot of heirs really do not like reverse mortgages.
How much can a homeowner sell?
The homeowner can sell up to 49% of the equity she owns in the home. For example, if the owned home equity is 75%, then the homeowner can sell up to 75% x 49% = 36.75%.
How little can a homeowner sell?
The minimum amount is $100,000 currently. We may change this amount in the future depending on the geography.
What documents are homeowners required to provide?
In order to complete a transaction on SmartRE, a homeowner is required to submit a current appraisal (within the last 60 days), mortgage or property-backed debt repayment schedule (if any), proof of income (if there is a mortgage), proof of homeowner’s insurance, and some personal information.
Does SmartRE guarantee sales?
As SmartRE is a marketplace platform, there is no guarantee that a house listed will be sold up to the percentage requested by the homeowner. Many factors can affect this, including the desired property valuation that may not be at the fair market value.
What fee does the homeowner pay?
The advertising fee for the homeowner is tiered, depending on the equity released. It is around 6.5%.
Is there a maximum amount a buyer may purchase? Is there a minimum?
The maximum fraction in a particular property a buyer may purchase is only limited by the amount the homeowner is willing to sell. The minimum fraction amount is $1.
What fee does the Buyer pay?
The fee on the buy side is 0.5% of the value of the transaction, with a $0.25 minimum fee. For example, if you buy $500 worth, then the fee is $500 x 0.5% = $2.50.
What do buyers have to provide to purchase property fractions on SmartRE?
SmartRE requires that buyers submit the usual personal information plus one picture of a government-issued photo ID, a selfie of them holding the photo ID near their face, and a proof of address (examples include an utility bill, a credit card bill, mobile phone bill, etc.).
What is the buying process and how long does it take?
When a buyer sees a property in which the buyer is interested, she then pays for the amount of the fraction she would like to purchase. It may take up to a month to achieve the requested percentage that the homeowner wants to sell. If after the listing period the requested percentage is not achieved, the homeowner can call off the sale and the amount paid by the buyer is returned.
How does a buyer sell the percentage? Is the buyer stuck until the property is sold?
The buyer can advertise and sell the amount of the percentage she has purchased to other buyers on the platform. It is similar to selling digital goods on any regular auction site.
How are buyers protected?
All properties must have homeowners insurance. In addition, properties listed on the SmartRE platform are assured by a customized policy to protect the percentage purchased. Should anything happen to the property, the policy will cover the value of the fraction purchased by the buyer. Finally, because the amount sold is less than 50% of the equity owned by the homeowner, the probability of malfeasance is very low as the homeowner still has incentive to protect her equity.