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Countdown To Buy: Rethinking the real estate transaction model to build a next generation online real estate marketplace

NationalMortgageProfessional.com
Jan 13, 2010

Jim Hodson is the chief executive officer and founder of Bethel, Conn.-based Countdown To Buy, a next generation online real estate marketplace offering a fair and effective way to buy and sell properties. On Dec. 8, 2009, the company launched its Web site that allows qualified home buyers to purchase foreclosed properties in a very efficient and transparent manner. Countdown To Buy’s platform uses a patent pending technology that automatically matches buyers and sellers in a real estate transaction through a process that reduces the property’s list price one percent  per day. The company has already entered into an agreement with a leading nationwide servicer of residential mortgages for its initial pilot program. National Mortgage Professional Magazine recently sat down with Jim Hodson to get a briefing on Countdown To Buy’s recent launch of their unique online platform and progress to-date. NMP: Jim our readers are extremely excited to hear about Countdown To Buy’s recent launch of its online real estate marketplace. However, could you start by explaining how you came up with the idea for the company? Jim: Having personally witnessed buyers and sellers being disconnected from the valuations of the marketplace and seeing agents placed in the difficult position of trying to bring these parties together, I wondered whether there was a better way to help bridge that gap in an objective, win-win manner. When the volatility of foreclosures and short sales exacerbated the pricing disconnect, I felt many people could benefit from the process I envisioned -one that removed the uncertainty and conflicts often inherent in a real estate transaction. When I first spoke with my friend and now Managing Partner Tom Furey, who is of the most knowledgeable minds in real estate, we truly began to grasp the potential of this idea we both knew that this was going to be much more than a software company. I am thrilled to be able to say that Countdown To Buy has arrived--developed as the next generation real estate model built on transparency, trust and speed, with an uncompromising mission to offer the most fair and effective way to buy and sell properties. NMP: Could you take a moment to explain the Countdown To Buy process? Jim: Countdown To Buy uses a patent pending technology that automatically matches buyers and sellers in a real estate transaction through a time-limited process that reduces the property’s list price one percent per day. Confidentially submitted offers are systematically compared to the daily price and when an offer matches or exceeds that price, the offer is automatically accepted and the contract process is initiated. With process and technology at the heart of our offer management system, we challenged and streamlined every aspect of the real estate process from list to close. Could you imagine the looks I got when I put forth this challenge! Through our Web site, property listings can be researched with more detail than ever before, approvals for financing integrated, inspections pre-scheduled, and showings arranged. We even assign a knowledgeable “closing concierge” to assist and expedite closings to help inexperienced buyers navigate through the complexities of going from an accepted offer to being handed the keys to their new home. NMP: Interesting, but what makes Countdown To Buy different than other online real estate marketplaces? Jim: First, we have eliminated the concept of a list price and replaced it with an offer range where offers are tendered but there is no negotiation. Our sellers subscribe to a process, not a price, confident that buyers are motivated to submit their highest offer because incentive to do so is inherent in our process. Buyers are in turn, attracted to our model because the foundation is already set for a fair transaction. Second, we provide the most useful and relevant information before critical decisions are made. Every property has an independent appraisal, as well as a local real estate professional’s valuation and the reports are posted for all prospective buyers to see before making an offer. Finally, we create a sense of “controlled urgency” and competition through sophisticated event-based marketing with a compelling call for action --“the price reduces one percent per day.” NMP: What do you view as Countdown To Buy’s competitive advantages? Jim: Whether you are a first-time home buyer or savvy investor, Countdown To Buy is able to facilitate a home buying experience with less anxiety, more certainty, and more confidence than ever before. Our key competitive advantages are woven together within the entire transaction process. We provide information when it is needed and best suited, pre-qualify buyers to reduce fall-out, allow buyers to directly make offers thus reducing pressure and fraud, add marketing sophistication for the sellers, and close deals efficiently. Why are inspections and appraisals typically done after an offer is made? Why are buyers not pre-approved for purchase to a high standard before making an offer? We asked these questions and rearranged our process so serious buyers can deal with serious sellers and get a transaction done quickly. Countdown To Buy’s Information Platform provides an objective and holistic view of a property. The information we provide to potential buyers is unprecedented. We provide multiple independent valuations, market comparisons, property condition reports, and tools for buyers to assess the financial viability of the property. Countdown To Buy also provides an abundance of unfiltered peripheral information about a property–from local school ratings to community demographics – all designed to empower the buyer.       NMP: When you get down to it, isn’t Countdown To Buy basically just another auction site? Jim: No, it is not. Auctions are most often used as a sales technique of last resort and rely heavily on emotion and marketing hype. The results are wildly unpredictable, especially for buyers. Countdown To Buy is a hybrid with a much more deliberate approach. We integrated the best features from the traditional real estate model using insights and local knowledge of professional and introduced the urgency and timeliness of an auction to create a next generation real estate transaction model. NMP: What are the benefits to homebuyers using Countdown To Buy’s platform? Jim: In a word, “empowerment.” Imagine having an independent appraisal or inspection to look at before one makes an offer. Or imagine having a contractor do a walk through and providing yet another independent perspective or even repair estimates. With more properties on the market being designated “as-is” the market is demanding objectivity and transparency to benefit the buyers. What we have found however, is this benefits the sellers too. Countdown To Buy is able to facilitate a home buying experience with more confidence than ever before. This is not only good for the buyers and sellers, but good for the industry as a whole. NMP: Is your process trying to disenfranchise the Realtor? Jim: Absolutely not. In fact, we find that Realtors are eager to embrace the Countdown To Buy approach. There are many ways we can make their lives easier, one significant example being eliminating negotiation with servicers. Realtors are a valuable resource and trusted partner in property transactions. Their knowledge of the local markets, ability to help a buyer and seller grasp the marketplace dynamics, and their expertise in navigating the regulated real estate sales process is essential to delivering a better home buying experience. With Countdown To Buy, Realtors no longer have to tell a disconnected seller their house will never sell at the dream price, or tell the buyer that their offer was rejected at the last second because another buyer made an offer at the 11th hour. In addition, Realtors will gain access to pre-qualified home buyers and focus on what they do best – servicing clients and matching them up with their desired home. NMP: I saw that you landed your first client, a leading nationwide servicer. Why are banks and servicers engaging Countdown To Buy to help liquate their REO properties? Jim: Yes, in November 2009, we entered into an agreement with a leading nationwide servicer and are in discussions with more than five additional banks, servicers, and outsourcers to run pilots. This is more than a business milestone. The institutions we are dealing with are pragmatic and sophisticated. We have gotten their attention because our business model is novel, but we have traction because of our timely, efficient, and cost effective solution. NMP: What is the market opportunity for Countdown To Buy? Jim: What is the opportunity for a brand synonymous with trust and transparency? The real estate market continues to undergo disruptive change and the foreclosure and short sale market has become the “new normal” marketplace. Government guidelines like HAFA (Home Affordable Foreclosure Alternative) illustrate the need for an objective and balanced approach to get borrowers, servicers, and lien holders together. For many of the reasons mentioned already we fit very well into this market, but also know because of our win-win approach, over time the Countdown To Buy model will become the norm for many traditional sales as well. NMP: How is Countdown To Buy compensated or how do you make money from your online marketplace? Jim: Countdown To Buy is a technology services provider, marketing engine, and transaction services company. We work closely with Brokerages under a variety of arrangements to provide an ala carte menu of services and technology built around our core patent pending Countdown process. NMP: Has Countdown to Buy developed any mortgage lending partnerships? Jim: Yes, we have. To date, we have developed three preferred partnerships with quality mortgage companies including Flagstar Bank, Champion Mortgage, and Mortgage Master. We are excited about each one of these new partnerships because we are committed to offering all home buyers competitive rates, the mortgage industry's latest technology, and trustworthy guidance from mortgage professionals to help make their loan experience as smooth as possible. NMP: Does the company have enough funds to execute its go to market strategy? Jim: We recently announced that we secured over $1.1 million in funding from investors. The company will use the proceeds from this funding to expand our go to market strategy and enhance operational capacity. We believe this funding is an important milestone for our Company, and one that validates both our technology and business model. Like all growth companies however, access to growth capital in the future will be important because as far as I can see, our potential for growth is tremendous. NMP: Could you give us some background on Countdown To Buy’s management team that is executing the company’s strategy? Jim: I’ve been lucky enough to surround myself with enjoyable people who are multi-faceted, talented and have incredible drive. The core management team is made up of Dan Connell our president, Tom Furey our managing partner, and I am the chief executive officer. Quite frankly, we are not very focused on titles right now and we all do whatever it takes. We wouldn’t be where we are today however, without seasoned veterans like Del Morais, our CFO, Matthew Gutauskas heading operations and Peter Becker driving IT, and they have great teams behind them making them look good. Combined we have more than 100 years of real world managerial experience in the financial services, real estate, and information technology industries and have held leadership positions in companies like GE Aerospace, Deloitte, Standard & Poor’s, IBM, American Express, Goldman Sachs, and Sovereign Bank. What makes this team special is that we have a very strong entrepreneurial streak running through us and bringing Countdown To Buy to market has allowed these skills to thrive in a culture of a small company but execution on par with some of the greatest companies in the world. NMP: Jim, it seems like an exciting time at Countdown To Buy. Please keep us posted on the company’s progress.  For more information on Countdown To Buy, visit www.countdowntobuy.com, call (877) 4321-BUY or e-mail [email protected]
Published
Jan 13, 2010
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