Transformation 1: Ownership Structure

The first of the two major transformations is the transformation of the ownership structure that holds real estate. The tried and true method of ownership to date for the average home owner has been the traditional single ownership model. As with everything discussed till now, we're instead using a co-ownership framework that we've designed to hold real estate instead. With co-ownership the main tradeoff we're making is choosing mobility over agency.

The Co-ownership Framework

Traditional home ownership was optimized for agency. And with this model, there is an inherently large number of costs that the consumer is left to deal with. Of which, most of these costs are due to Counterparty Risk and it's inherent role in the traditional home ownership model. Which as we saw, led to the creation of the 5 year rule in real estate.

The co-ownership framework is optimized for mobility. Which means transitions between owner-occupants need to be as frictionless as possible to bring the costs down to something more reasonable for those who are highly mobile. To do such, co-owners willingly forego individual agency.

If there's anything that you get out of everything that is to come, it is that the main tradeoff Tadaima takes is again mobility over agency. In essence, the current homeowner market in the US is maximized for agency, but at the cost of our mobility. By letting go of that, we can trim costs way down to move things from 5 years down to 1.

Cutting Counterparty Risk

In our section Sequential Co-ownership we explain what our service is and how it hopes to realign incentives between buyer and seller to be cooperative vs competitive. What this does structurally is eliminate a large part of the Counterparty Risk that is an inherent part of every real estate transaction. It doesn't remove all of it, but it hopefully reduces a huge chunk of it. This hopefully removes the following costs:

• Realtor Commission

• Home Inspection

• Home Appraisal

• Prorated Property Taxes

• Upfront HI Premium

Additionally, we can reduce lending costs as well. With every real estate transaction, the Seller most likely already has a mortgage on the home. The Buyer most likely will have to get a mortgage to purchase the home with. Instead of getting a new mortgage every time like with traditional ownership, in Tadaima we share the same mortgage. By relaying one mortgage between individuals, we hopefully removing the following costs:

• Loan Origination

• Title Insurance & Search

• Intangible Tax

• Prepaid Interest

and in it's place we replace those costs with an alternative that is much cheaper:

• Loan Assumption Fee

Whats Next?

After removing what we can, we still have imperfections that we need to account for. And accounting for them is exactly what we do. These leads us to our next transformation, changing the temporality of certain transactions.