Deal or no deal….thats been the game we’ve been playing for over a week now, post founders banquet in Dallas. Many phone calls, meetings, and additional documentation distributed. Discussions including terms sheets, pro-forma analysis viability, equity dilution, and hard valuations consume the days. It’s the ‘dirty’ but necessary aspects of funding a start-up.
As my partner Mark likes to say, life is what you negotiate, so at times conversations can get uncomfortable as each party jockeys for position on multiple levels. We want to ‘give up’ as little as (fairly) possible while investors want the most bang for their buck. So one week after our presentation we sit with a nice chunk of money committed verbally by a number of ‘Angels’ while continuing to negotiate with more ‘institutional’ players that are in position to fund the rest of our dream. Like a kid around Christmas time, I find myself doing what’s necessary to keep my mind busy as The Negotiators do their part to close this baby up.
I‘m in Vegas (again) so theres plenty to keep busy with. My wife and I went and saw the Bodies exhibition at the Tropicana which was AMAZING. Being a biology guy, the exhibit as a whole was a review in anatomy and physiology, however the dissections and resulting products were an artistic display of the most fascinating aspects of what makes ‘us’ work. While attending college, my anatomy class was fortunate enough to be able to dissect a human body from the top (skin) down (internal organs). The smell of formaldehyde and open human flesh is a very distinct one (kinda gross, I know) and although the cadavers were preserved in a silicone based coating turning them into a plasticized work of art, my brain couldn’t seem to rationalize ’seeing’ raw muscle, bone, etc. without the accompanying odor, prompting my phantom smell. It’s hard to dismiss whats deeply ingrained in the psyche. As with most aspects of life, you are what you learn. Genetics plays a vital roll as a predictor of disposition or reaction towards certain stimuli, but it is ones environment that ultimately shapes the person.
As a company RealEspace probably looks like another internet start-up proposing a grand solution, initially in the mortgage arena. It apparently smells of LendingTree and a slew of other similar ‘Lead Gen’ models, which is highly understandable, after all I haven’t spoke in any great detail about how we actually propose to deliver transparent wholesale mortgage rates. I imagine most brokers and bankers also smell another company looking to carve out a pound of flesh for itself and/or cut out the individual professional in the process. For anyone that isn’t in the know, LendingTree charges $10,000-$25,000 just to sign up for the privilege to then pay for their leads and additional fees if the loan closes. When broker/bankers compete on Lending Tree, they must pass on these costs to the consumer. Similar things can be said about most all other Lead-Gen companies. It’s a fledgling and increasingly expensive business for mortgage professionals and subsequently consumers. S*^# runs downhill ;)
So even before we open the realespace.com blog, ill preview a little more regarding what we are as a company:
RealEspace shall provide web-enabled business suites for individual professionals and Company’s in the real estate service industries enabling them to deliver cost effective and transparent solutions to their clients and consumers. Each custom web-suites shall be enabled with robust software interfaces exclusively unique to our platform (at first).
Our initial roll out will be SEO prioritized ‘blog-sites’ for the mortgage professional that innately contains RateSpeedTM, our transparent wholesale direct mortgage rate search engine. What exactly does RateSpeed do that is so unique?
Quite simply it’s a rate.bot that can crawl and extract best case interest rate pricing results from a mortgage professionals existing broker/banker relationships.
More specifically, the software can crawl multiple disparate feeds provided by any number of wholesale mortgage providers, essentially allowing a broker/banker to submit a borrowers qualifying and anonymous risk-based criteria to a single point of entry, yielding all or best case results. Broker/bankers are often ‘approved’ with as many as 50 lenders, actually ’shopping’ an individual borrower to this many resources is time and cost prohibitive. RateSpeed prices every lender in minutes, insuring all resources are considered and exhausted.
Consumers shall have access to the exact same RateSpeed interface and information that our affiliated broker/banker does. No more bait and switch, smoke and mirrors, or wondering if one really got the best deal they could. Par rates and yield spread premiums will be there for all to see. As is often said in the mortgage world, ‘we all have access to the exact same rates and programs’, its how well one can sell themselves or their company. Mortgage professionals that utilize our RateSpeed enabled sites will be looked at as transparent service providers, instead of Salesman.
Our products shall not be cost prohibitive. We shall not charge a per deal or referral fee. Any successful broker/banker should be able to afford our products.
With great power comes great responsibility (Thx uncle Ben). By providing the mortgage professional community with a powerful and time saving tool we are mandating they share it with their potential clients. Consumers will see exactly what the professional sees, total unabated transparency. Our subscribing broker/bankers will have NO ability to manipulate the information before a consumer sees it AND they must charge a flat fee, disclosed up front, and verified via the funding lender.
We hope to raise the baseline of what constitutes a good mortgage away from interest rates and cost (since ‘we all have access to the same candy bag) and more towards qualified, efficient service. Alas, the technology won’t be for everyone, i.e. many broker/bankers will condemn it as some sort of heresy, while others will tell their clients that they already practice such ethical standards. At the end of the day, there’s really only one way to know.
Who will the increasingly discerning and educated consumer trust? The broker/banker who says ‘Trust Me’, or the one who doesn’t need to blow such smoke? Much more detail to follow… Stay tuned for the realespace blog-launch!
Also See:
Realespace.com prepares to upset the mortgage lead generation model
Blind Men and the Transparency Mortgage Elephant Realespace:
Finally, A Mortgage Search Engine?
RealEspace Launching Soon
What WEVE Been Up To…
RealEspace: T Minus 7
The Brokers New Clothers
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