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Seattle startups help creative buyers make home ownership a reality

In a market that seems nearly impossible, buyers in the Seattle area are getting priced out of the market more dramatically as each month goes by. Prospective homebuyer Otto Porco is a business owner in Des Moines.

He said the competition for homes now is fierce. "But next thing you know, you're getting beat out by people that have a lot more down," he said

Two new Seattle startups, Loftium and CoBuy, could make the dream of home ownership a reality, if the buyers are willing to get creative.

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CoBuy facilitates group buys between nontraditional partnerships, such as friends or family members.

Co-founder Pamela Hughes is a broker, and her son is an investment banker. They started CoBuy three years ago after they tried to buy a house together and found the process to be extremely complex.

Hughes said CoBuy works to align the interests of all parties involved. “It might appear that the greatest contribution is the legal agreement. That's great, but that's the culmination. It's really the planning and building consensus and getting connected with the right professionals who are looking out for the best interest of the clients,” she said.

Loftium offers cash upfront with a catch: You must agree to be an Airbnb host in the home for one to three years after your home purchase.

CEO Yifan Zhang said her company doesn't hold the title, it's not on the deed and it doesn't take any ownership in the home. It makes its money entirely from the Airbnb proceeds that come in. “If we don't hit our targets,” she said, “we're the ones on the line, not the homeowner.”

Zhang said there are no minimums and no quotas for how much you have to host. But there are requirements that the home be kept clean and up to par for Airbnb guests or else you risk termination of the contract and partial repayment of the down payment.

Zhang said it works because “both the homeowner and us are on the same side, because we share the Airbnb revenue.”

They split the proceeds no matter how well the home performs on Airbnb and so far, business is good. “I think all of them are at or above expectations for where we thought we'd be with them in terms of the Airbnb income,” Zhang said.

The client interface for both companies is clear. Each website asks for financial information upfront. CoBuy attempts to plot out the deal between buyers and co-buyers before the house search begins.
 
Loftium asks for a basic monthly financial breakdown and then funnels you straight to Redfin listings that match your buying power. From there, it tells you what your likely down payment offer would be.

KIRO 7 talked to Seattle realtor Diane Moorman about buyers using alternatives such as these to land a house. Moorman said the Airbnb idea is big right now. “I have several clients that part of what they are looking for is a home that has either a lower level or an adjacent dwelling unit that they can Airbnb to help them with their mortgage.”

For some buyers, an unconventional approach might be worth it, if it leads to keys to a house.