Matt Robinson believes he's starting a property revolution, but not everyone agrees.
“If we’re successful this will be one of the defining companies of our generation,” Nested’s CEO Matt Robinson breathlessly tells me.
“This is not a small business.”
We all know that selling your home is a pain. From sleazy estate agents to endless chains of properties make the process a slow-motion disaster for many.
But what if there was a better way.
That’s the pitch from Nested, an online estate agent-cum-lender which is certainly doing things very differently.
Like any estate agent, Robinson’s team will come and value your house, the difference is that Nested guarantees a minimum value they’ll sell your property for (normally up to 97% of the actual valuation).
Then Nested goes one step further, offering you that minimum value in cash, upfront, so that you can get on with the process of buying your next home.
The cash isn’t a loan, rather it’s an advance on the full amount so that you can get on with buying your next place, ahead of the full amount arriving once Nested sells your property (and if Nested sells above the valuation it quoted, you’ll pocket the difference, minus fees).
It’s a lot to get your head around, but basically it’s an entirely different way of selling your home, giving it to Nested, paying them between 2-4%, and letting them deal with the sale while you move on – unlike the rising low-end online agents who charge a flat-fee to list your property, but with no guarantee it’ll ever sell.
“It’s the difference between being stuck in a two-bed flat, bouncing off the walls with no garden to run around in while you’re stuck in a chain, and being in a three-bed near the school for the kids to start in September,” says Robinson, who came up with the concept for Nested after discovering the power of being a cash buyer.
When you pay in cash there’s no mortgage or ancient bank involved, which can save you weeks on a sale. Robinson wanted everyone to be able to have this same experience.
Cash can also open up the market, Robinson says, letting you negotiate better prices given you’ve got the money upfront.
Property technology investors agree, in October Nested closed a whopping £36m funding round led by Rocket Internet’s Global Founders Capital, adding to £8m it raised earlier in 2018.
That huge amount of cash means Nested can now expand the amount of properties it handles every month from 50 currently, to 250 by the end of this year – something Robinson doesn’t blink at.
Nested needs a large pot of money to guarantee its payouts and valuations, but the downside of this is that it’s fairly picky about which properties it takes on, so as not to risk losing too much.
Robinson says that this is so that it makes no sense for Nested to under-promise or lowball sellers, as that would only hurt Nested’s reputation, instead he says his valuations are often just more realistic than traditional estate agents – which don’t take on any risk if your place doesn’t sell.
“We’re buried in demand, exactly because selling your house is such a terrible experience,” he says.
“In two or three years time, when you go to sell your house, you’ll say ‘shall we use the cheap guys, the old guys, or shall we use Nested?’ Those will be the three options.”
Not everyone agrees, however.
“Nested is a nice idea, but the reality is that the business is taking on a high-risk exposure to the property market,” one industry insider told The Memo, on condition of anonymity, questioning whether large corporate property lenders would be willing to back a project like Nested’s.
“It is lucky Matt is a young guy, because it is going to take an eternity to get institutions to buy into the funding side of what they’re doing, and institutions are used to getting far better returns from less market risk against property.”
Another downside of Nested for property owners, based on the experience of people I know who have received quotes from the service, is that its valuations of properties aren’t always the most… generous.
And if Foxtons promises to sell your place for way more, it’s still a no-brainer to try.
Still, it’s early days for Robinson and the team, food for thought when you next come to sell.