How is the property's value determined?
Determining the Initial Value
Initially, we use your estimate of the home's value to generate a conditional offer for you. For the contract terms, we will triangulate on an on-site appraisal, 3rd-party automated valuation models (AVMs), and our own proprietary pricing algorithms to determine a value for the property. This is referred to as the Appraised Value in the Homeowner Agreement. If you do not agree to this process or to the ultimate value then we will not be able to provide you with Point funding.
There may also be a Risk Adjustment applied to the Appraised Value to determine the initial value of the home used to calculate the total appreciation. This Risk Adjustment offsets the chance that the home will depreciate before the end of the term, a property sale, or when you decide to buy back Point's position. For example, a home that is appraised at $500,000 may have a risk adjusted value of $450,000 due to market conditions and other factors.
Determining the Ending Value
If you decide to repay Point during the term through a refinance or if you have not sold your home by the end of the term, the property's value will be determined using an appraisal, AVMs, or a broker price opinion (BPO). If your refinancing lender is ordering an appraisal, we will often use that valuation. Generally, if you sell your home at fair market value, we will use the sales price as the ending value.