Crowdfunding is a new way for anyone to gain money online from friends as well as anonymous people who want to help fund their ideas or necessities in life. GoFundMe has taken Americans’ interest in free money and helping those in need to another level. The site allows individuals to sign up, share their plight and need for money from others online, and even provides a safe way for users all over the world to transfer money from their bank accounts to the person who needs the money safely online.
People have gone to crowdfunding sites for expensive-surgery costs, college-tuition costs, and business ventures. These types of crowdfunded endeavors are common, and people enjoy helping those in need. However, what do contributors think about crowdfunded real estate? You may have a client who suggests using a crowdfunding site to help them buy their dream home. This may seem a little strange at first, but if you're in the business of real estate, you're definitely going to see this happening more and more with clients in the coming years.
So what do you think about free, crowdfunded real estate? Do you think it’s a good idea? Do you think it’s irresponsible of you as an agent to allow your client to accept free money from others for a home?
Whether you want your client to use crowdfunding or not, here are the pros and cons of crowdfunded real estate.
Pros of CrowdFunded Real Estate
The pros of crowdfunded real estate are simple: the buyer is able to have peace of mind that they will be able to pay for their home through the help from friends, family, and anonymous donators. The buyer will be able to focus their own income on covering more than just the down payment of the home. The buyer then has the opportunity to afford the monthly payments on the home for themselves and their loved ones' best interests.
Cons of CrowdFunded Real Estate
Lots of people think crowdfunding should only be used for emergencies. Hospital bills/medical care, destroyed homes, or vehicle problems are what most people would be happy to help support. These people do not see the benefits of giving money to others for things that they can handle on their own with time, like college loans, business ventures, and real estate.
Let’s face it: lots of people do not like giving away free money. That’s exactly what crowdfunding is: giving money to someone to spend it on whatever they want.
Is CrowdFunded Real Estate Right for Your Clients?
So is it for your clients? Maybe your client is the type of person who would shun others for using crowdfunding sites to buy a home. Because, after all, buying a home is not necessarily something that deserves an emergency fund or free money from outside individuals. If that's the case, this client will unlikely want to crowdfund the costs of their home online.
However, you may have the type of client who would love free money from others to help them purchase their home. If that’s the case, crowdfunding is right for them. This is not an easy decision to make, and you should cover this topic heavily with your client if they're considering it. Talk it over with them and see if it is a smart move for them to make to afford that beautiful home they've always wanted. Who knows . . . you might end up being one of the online donators who helps them out.
What do YOU think about this recent phenomenon? Have you worked with a client who used crowdfunding?