Ribbon, a real estate technology company, launched Appraisal Protection, a new feature of RibbonCash Offers, enabling homebuyers to make winning offers by waiving the appraisal contingency. Buyers have peace of mind that Ribbon will cover any difference if the home is under-appraised, the company announced in a release.
The real estate market has been extremely competitive with record-low inventory and home prices have increased 15 percent year over year, Ribbon stated. First-time homebuyers and everyday families face even more competition with the rise of institutional buyers making cash offers without the need for appraisals, leaving first-time homebuyers with limited cash unable to compete.
"We are seeing a dangerous trend in today's market - middle-class families, especially in the starter home market, are losing out on homes to institutional investors and high net worth individuals," Ribbon co-founder and CEO Shaival Shah said in the release. "This has only strengthened our commitment to our mission. Appraisal Protection is one of the ways we can level the playing field and help everyday families turn their dream of owning a home into a reality."
If the home appraises below the offer amount, Ribbon covers every dollar. For example, if a RibbonCash Offer is accepted at $360,000 but the home appraises for $350,000. Ribbon covers the $10,000 difference.
"Appraisal Protection has been a game-changer," Tass Ploskas, a Houston-based agent, said. "With Ribbon, we were able to win in a multiple offer situation and Ribbon saved the day when the appraisal came in low."
The Appraisal Protection feature is available today in all markets Ribbon operates in - North Carolina, South Carolina, Tennessee, Georgia and Texas.