There is no lending on Vesta Equity. Homeowners who fully own their homes can list a portion of equity they want to sell by setting a percentage and a desired amount that accredited investors can negotiate and purchase. Once the transaction is approved by Vesta Equity, the investor fully owns the equity they’ve purchased and the homeowner receives the negotiated funds. These funds belong to the homeowner who can use them at their own discretion without any obligation to repay the investor.
The homeowner always retains residential rights and this is embedded in the smart contracts that both homeowner and investor agree to. An investor has no rights to use the property in any manner whatsoever.
Homeowners who wish to repurchase their equity can select the buyback option on their listing and set a term length as well as an annual appreciation rate. For example, a homeowner who anticipates selling their home and is looking for funds to renovate and increase its value can sell some equity on Vesta Equity’s marketplace, use the funds for upgrades without incurring any debt, and then repurchase the equity for a set amount within the buyback term window.
All users are fully verified by the same industry-grade KYC/AML processes that banks and traditional financial institutions use. Digital wallets are fully custodied, which acts like having a safety deposit box in a bank vault, and funds used for transactions are peer-to-peer, going directly from the investor’s wallet to the homeowner’s. Properties themselves are verified using data that originates from land title registries with a suite of leading property data services to validate their market values. Finally, Vesta Equity is added onto every property’s insurance to protect investors’ interests against insurable events.
Vesta Equity was founded on the principles of transparency and disintermediation to help homeowners realize the value in their home equity. We allow homeowners to negotiate and transact directly with accredited investors who want to manage which properties they invest their money. So how do we make money? Vesta Equity’s fee structure is simple. We set a one-time, flat closing fee. With our solution, there are no monthly payments, accruing interest, or penalties.