We love gushing over wedding dresses, yes. But let’s get real for a minute. When all the wedding planning and honeymoon shenanigans are left behind—and it’s time to really settle into that married life—newlyweds are faced with an intimidating question: “Should we rent or buy?” The struggle of buying a home in the San Francisco Bay Area is real, and because we want to support you every step of the way, we had to address the elephant in the room!

We had the pleasure of speaking to our friends at ZeroDown and gathered their valuable insight on the matter. This company seamlessly bridges the gap between renting and buying in the San Francisco Bay Area (and other regions in the future, but more on that below) and we are totally here for it. 

Hari Viswanathan (Co-Founder & Chief Economist, Head of Data Science) and Sam Sawyer (VP of Operations) were friendly, genuine and approachable—which in our book, already speaks volumes about the company. But don’t take our word for it, and read on to learn all about ZeroDown and buying a home in the San Francisco Bay Area!

Keep reading to get the scoop on homeownership.

Young couple with their dog sitting on their couch.

What inspired the concept for ZeroDown?

Hari: We found it absurd that even households consisting of professionals with steady and well-paying jobs, were not able to afford homes in the Bay Area. One prime example is our CEO, Abhijeet. Before ZeroDown, he was the COO at Zenefits. Yet, despite being a successful executive at an established company, homeownership remained inaccessible due to high down payment requirements. And after talking to many others, it was clear to him that he was far from alone. That conviction is what led him to co-found ZeroDown with us. His story is the story of customer after customer we talk to, and that’s been our north star as we continue to build ways to solve that problem for as many people as we can.

ZeroDown focuses on impacting the notion of homeownership in the bay area. How are you achieving that?

Hari: In the Bay Area, and everywhere else for that matter, people are faced with either rent or own, and there is no middle ground. And for most people, it’s not even a choice—renting is the only option because runaway home price appreciation in the last decade has pushed 20% down payment requirements for a traditional mortgage to ridiculously high levels. The end result is that tons of people may be forever locked out of ownership, or will be years behind schedule on building their life as they slowly save, and hope that prices don’t increase faster. In the meantime, they will waste money on rent without accumulating any equity in their home, which further compounds the risk of falling behind the wealth curve.

So we asked ourselves, what if we could build a product that could be a bridge between renting and owning, for all of the people who just need extra time to save for a down payment, as well as those who don’t want to put their entire life savings into a down payment? 

That’s where we think we are making a big impact—by creating an additional path to homeownership besides the traditional 20% down payment. We buy the home for the customer, they lease it from us and have the right to buy it back from us. This way, people are able to settle down into the home they are trying to save up for; now they get to move in today, years ahead of schedule, and finish buying it later. 

That wasn’t possible before, since homes that are for sale are not available for rent, and homes that are available for rent are not available for sale. Breaking this dichotomy is another way in which we think we are changing what’s possible when it comes to the home that people can live in.

Illustration of a house with a "sold" sign.

How does the process work? How does one buy a house with ZeroDown?

Hari: People get to know about us, they reach out to us, and then they qualify. We work with them to understand what they can afford in terms of monthly payments and the price of the home. Then armed with that information, they work with us and our real estate agent partners to hone in on their dream home. Once they identify their dream home, ZeroDown buys the home with an all-cash offer, and gives the customer their key in as little as seven days. 

How long does it usually take until the customer actually owns the home?

Hari: The arrangement is a minimum 2-year commitment on the lease, but the customer has up to five years to decide whether they want to buy the home from us. In other words, they can buy it back from us any time between 2 and 5 years. 

Are there any upfront fees?

Hari: Yes, there is a one-time program fee of $10,000. That’s the only upfront fee. Other than that, it’s just the monthly payments.

Family of three playing with boxes from the move.

What’s the average price of a home in the Bay Area?

Hari: The Bay Area real estate market is actually very fragmented. There are neighborhoods where the median home price is in the $1 million range and then there are neighborhoods where it is $1.5 or even $2 million. ZeroDown typically buys homes in the $500,000 and $1.5 million range, so the average price of a home that we buy is about $1 million.

What’s your advice on choosing a location?

Hari: Just like the real estate market, people’s needs are very different; there is a perfect home for every customer, depending on their needs and wants. Some people are looking for school districts that are highly rated by third parties such as GreatSchools.org and Niche.com. Some people have or are planning to have children, so quiet neighborhoods with minimal traffic and plenty of room to play outside may be ideal. People who are optimizing for urban living, work and commute and want the city lifestyle will probably be looking for proximity to the major urban centers of Oakland and San Francisco. We’ve recently launched new tools that will allow people to search much more granularly based on their specific needs and wants.

Bride and groom!

We would love to hear a stand-out story that reflects how ZeroDown is changing the game for newlyweds and young people who are buying their home for the first time.

Hari: Nicole and Greg! They were newlyweds looking for a home to start their married life. And again, the down payment was a very big barrier for them. They are also in a very competitive real estate market where they could lose out to cash offers. ZeroDown was a game-changer for them. They no longer had to worry about a down payment, and because we make all-cash offers, they also had an edge against most other bidders—and were on equal footing with anyone else making an all-cash offer.

Sam: Yeah, they just really liked not having to lock up all of their money in a down payment. And they wanted a place with a yard and some more space so they picked a house in Oakland, kind of near Lake Merritt. They wanted to be close to the city but with a lot more space. They’re across the bridge but still close to all the amenities on both sides.

I must ask—because I know a lot of our readers are going to be wondering. Are there plans to expand beyond the Bay Area in the future?

Hari: [Throws a knowing glance at Sam] Definitely yes. 

Ok… That’ll give people some hope.

Hari: Yeah, definitely. You’ll hear more about this in the upcoming months. This problem exists in many other markets in the United States and it’s only going to get worse. Millennials have a lot of student debt and they don’t have as many assets as the earlier generations. There are very detailed studies about why the homeownership rate amongst millennials is low—apart from the obvious fact that home prices are skyrocketing and the barrier itself is very high. So it’s definitely a very important problem to solve and if we are truly going to solve it, we have to expand to other areas.

Family of three at the beach.

If a couple walked up to you asking for advice, what’s the most important tip you would give them when it comes to buying a home?

Sam: I come from the brokerage world and I was an agent for about ten years. I worked with countless young couples, and the main thing I would say is making sure you think about how your life could change, which in turn affects how long you would want to stay in this house. Because sometimes people will choose a house that they love but they don’t think about having kids and neighborhood schools, or other things that’ll happen once their life evolves past the young adult life. Sometimes people will pick a place because they love the neighborhood and the restaurants but then a year later they’re thinking about schools or different things, so it’s kind of making sure that they think about how the home and the neighborhood will work for them as their life evolves over the years, and not just for today’s life.

Hari: So for example—as Sam said, the main thing is projecting into the future. That being one of the dimensions, a good rule of thumb would be starting with the house itself. What do you want in the house? What features do you like the most? Do you like a sunny home, do you like walk-in closets, do you like big yards…?

All of that.

Hari: [Laughs] All of it, right? Then you slowly start thinking about—okay, is this home energy-efficient? Again, projecting into the future. So if you want to put solar panels on top or solar arenas in the house, for example. Then starting to think about—okay, what are the schools that are near this particular home? The nucleus is the house, and it’s about expanding out from there. What are my commute options to work? Then thinking about lifestyle. What’s the proximity to places I frequent? What’s the proximity to places I would like to go on weekends? Then it’s about thinking in a broader sense, like thinking about the community. Do I love farmer’s markets? Do I frequent any local events? How important is community to me? So it’s not just looking at a house and falling in love with a particular feature or just loving the restaurants in a particular area. People or newlyweds should think about the different layers of what it means to have a home, starting from the house and thinking out all the way to the broader community and to the future. It’s about whether the home is a reflection of today’s life, and how they might still be able to see themselves in it a few years from now. 

In the end, what we’re really trying to say is that a home is more than just the house, and that people should really think carefully about the difference. A home is an entire life that is built-in, through and around the house, and we think people who buy a home with that in mind will be happier with their decision.

Are you a newlywed looking to buy a home in the San Francisco Bay Area? Adulting’s already hard enough. Get to know your buying power and breeze into homeownership with ZeroDown!

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