Making 2025 feel like 2021: market strategies from Nick Friedman

HousingWire

In this exclusive interview, Nick Friedman, President of HomeLight Homes, joins HousingWire’s Allison LaForgia to share his unique perspective on what it takes to win in a slow market. Drawing from his experience as a startup founder and product strategist, Friedman breaks down how industry professionals can pivot their approach in 2025 by focusing less on interest rates and more on long-term value, buyer psychology, and operational efficiency.  From creatively leveraging homeowner equity to reframing the borrower conversation, Friedman offers a tactical, no-fluff look at the tools and mindset needed for success today. Plus, he breaks down the story behind HomeLight’s “I can make your DTI drop” campaign and explains why debt-to-income may be the most under-leveraged metric in lending right now.

Transcript

00:00From HousingWire in Dallas, Texas, I'm Allison LaForgia, managing editor of HousingWire's

00:08content studio. And today I'm joined by Nick Friedman, who is the president of HomeLight

00:13Homes. Nick, thank you for joining me today. Thanks so much for having me, Allison.

00:18So Nick, you have a really unique background and your experience starts with you co-founding

00:23a company. So tell us a little bit about how your experience at Accept Inc. informs your

00:30perspective on today's market and your role as president of HomeLight Homes.

00:35Absolutely. I think starting in your first job, co-founding a company, dropping out of

00:40college gives you a lot of perspective really quickly. I think that going into the real estate

00:46and mortgage industry in particular, with no prior kind of background there, was also a

00:51really big kind of eye-opener for me. And so I think it really kind of forces you to

00:56learn a lot about the industry very quickly. And so, you know, I was 20 years old when I

01:03dropped out of college, or 19 or 20 years old when I dropped out of college, and I was swinging

01:08for the fences, right? My goal was to change the world, change the industry, right? Build

01:13something crazy. And so a lot of people were building CRM tools and VR and AR. And I think

01:21I kind of looked at the transaction, right? And said, hey, you know, is there a different

01:25way to buy and sell homes today, right? And we started off with the cash offer at Accept.

01:31We said, hey, cash offers are a great way to buy homes. How do we allow anyone to submit

01:37a cash offer if they don't have the cash to do it? And so we started Accept as kind of the

01:41institutional rich aunt or rich uncle, if you will, that would front cash to clients to help

01:46them buy homes. And so from there, and kind of as we experienced that journey, we kind

01:52of focused on the second biggest problem, which we saw, which was, hey, I have a home

01:57that I need to sell. And when I go and actually purchase a property, and I tell a seller that,

02:02hey, I'm going to buy your home, but I have to sell my home first, my offer goes to the

02:06bottom of the pile, right? And so if there's a way to solve that problem, that's also a huge

02:10benefit for the transaction. And so as we've kind of moved towards HomeLite, and when the

02:16company got acquired in 2022, we were building kind of that solution for buying before selling.

02:22And now it's our flagship product here at HomeLite, right? So we refined it, we built it over time at

02:26HomeLite, and now it's became our kind of flagship product. So kind of my experience, my background at

02:31Accept, and just kind of dissecting the transaction, failing 5,000 times until we figured out something

02:37that actually worked, I think really helps inform kind of where we're, you know, where we're going

02:41today. Absolutely. And I want to touch on something that you mentioned previously, that I think is

02:49really also interesting. You said that you wanted to make 2025 feel like the market never slowed. So it

02:58sounds like you've done a lot of work on the transaction side, and looking at how to best have

03:05operational updates in this process. What mindset shifts do you think professionals in the industry

03:12need to embrace in order to make that vision possible? Yeah, I think the biggest shift is, you

03:20know, loan officers need to realize that we're at the lowest number of loan officers that we've had in

03:26a long time, right? Lowest number of active loan officers in the country. But we still have a pretty

03:31large number of transactions happening. It's not like everyone just stopped buying homes, right?

03:36We're still going to do three or 4 million transactions this year. But we have way less

03:40loan officers to support those transactions, which means that the top loan officers are actually doing

03:45a very large amount of business today. And the mindset shift that I've seen that's really important

03:50is embracing the weird stuff, right? The transactions that aren't normal. And most transactions today

03:56are not normal. They are non-QM loans, they're crypto assets, they're multi-generational housing,

04:03whatever it might be, right? It's all these unique products, buy before you sell included,

04:07right? And so the loan officers that are rising to the top are adopting the mindset of, hey, I'm going

04:12to find the best solution for my client. And I'm going to figure out, even if it's a weird product that

04:18I don't even understand, I'm going to figure out what that product is, know the ins and outs of it,

04:22and then use that to get my client into a home instead of the standard 30-year fixed mortgage

04:27that they've been doing for quite some time.

04:30Now, you just spoke a little bit about those loan officers that are rising to the top. You've also,

04:37in the past, mentioned how we have this psychological obsession with rates among borrowers. So how can

04:45industry professionals who are looking to edge towards that top performing group,

04:51reframe the conversation to help buyers focus on long-term value and opportunity instead of the

04:59short-term rate fluctuations that we're seeing? Yeah, I think, you know, buyers love to brag about

05:04rates. It's like a, I don't know if cocktail parties are a thing anymore, but this is what I used to say

05:10back before COVID was, you know, hey, like at a cocktail party, people would brag about the 3% rate or

05:16the 2.75% rate. And that was like their thing, right? And I think people got really excited about that.

05:21But I think what people often forget is like the key number in my mind is the monthly payment that

05:26the client's actually paying every single month, right? So if you have a 7% mortgage on a $100,000

05:32loan versus a 5% mortgage on a $700,000 loan on the same house, you're paying a lot more money for

05:38the lower rate than you are actually paying if you just had a lesser mortgage amount, right? And one way

05:44to accomplish a lower mortgage amount is to use equity in your existing house to go and buy your next

05:49house, right? And so that's just an example. But what I tell loan officers today is reframe the

05:53conversation as to what are you willing to pay monthly? And then let me figure everything else

05:58out for you, right? There's a lot of solutions out there, rate buy downs included, right? There's

06:02a lot of interesting solutions that you can do to get rates down. But independent of getting rates

06:07down, I think the reframing needs to be around what is the payment you're comfortable with? And then

06:11I'm going to go find a product or a series of products that's going to get you to that payment.

06:14It's going to get the mortgage balance to the balance we need to get it to. And you're going

06:18to get into your home at that number. And I found that loan officers are a lot more successful when

06:21they do that. And it almost keeps the rate on the side, right? It's no longer is the client going out

06:26and shopping rates. They're shopping solutions. And if you're the loan officer who has the solution

06:31to the client's needs, and they're paying the amount they want to pay per month, you win,

06:36right? That's the way that I view it today.

06:37I love that shift talking about the actual monthly payment and not that bragging right over what your

06:46actual rate was. I think that's a much more healthy perspective to have.

06:52Yeah, absolutely.

06:53And you just sort of mentioned my next question, but I want to segment or dial into that specific

07:00piece of home equity and utilizing that for your next purchase. So talk to me a little bit about

07:07little bit more about that idea of home equity as a scalable business advantage. What does that look

07:15like in practice?

07:17Yeah, absolutely. I think that today there's trillions of dollars in home equity in the US

07:22that exist and people don't realize that they can use it, right? And so I think I actually find

07:29this stat really interesting. So the average age of a home buyer has gone up over the last three

07:37years from like 37 or 38 to 54, right? And a lot of the people who are that age and older, this is

07:44a common thing we see consistently, and it's a great use case for using equity. What we see is that

07:50they want to move into homes that actually have all the bedrooms on the first floor, right? Because they

07:56don't want to go up and down the stairs, they're getting older, whatever, right? And so that's what they're

08:01trying to do, but they have all of their assets or money tied up in their retirement or in investments

08:07or whatever it might be. And they don't want to liquidate that and then go buy their next house. They end up

08:11just staying in their existing home. And so the beauty of equity and the beauty of especially people

08:16who are older and who have been building equity in their homes is they can just literally take that equity

08:20out with a product like buy before you sell, go buy the next house and never even see it, never even touch it.

08:25It's like found money. It's just there in the home. Use it as a piggy bank, go buy your next home with

08:30your old home, right? That concept of buying a new home with another home, it just doesn't, it's not

08:35something that computes for a lot of people, but it's very possible and people are doing it very

08:39successfully today. And so I think treating equity as kind of a superpower of, hey, this is money that

08:45is not tied up in anything, right? Except for my house. If it's not, you know, it's not growing

08:50necessarily as an investment. It's not in the stock market. It's not something that's a pain in the ass to

08:53liquidate. We can actually liquidate it very easily. You can go buy your next home and it's

08:57a very simple process. I think people are viewing equity as something that they have to protect,

09:03but instead of protecting it, just use it, make it work for you. Go to another house if you need to

09:06move or if you need to take some of it out and, you know, get a loan against your property, HELOC,

09:10whatever it is, that's a great option as well. I just think that it's something that people have

09:15never really viewed as liquid. And I think it's one of the most liquid things out there, especially with

09:20the tools that exist in the market today. And I have to ask you before we're out of time in this

09:25interview, you guys have a pretty famous tagline, the, I can make your DTI drop. There are even

09:33t-shirts. Yes. So why do you think debt-to-income is such a pivotal metric for innovation right now?

09:43Yeah, I think it goes back to the fact that rates are high, right? And that monthly payments are

09:50harder to afford, right? So kind of what we talked about, home prices have not gone down. They're

09:55still pretty high. And so your debt side of the debt-to-income goes up pretty quickly, right?

10:01And when you have to carry both mortgages, right? When you have to carry the existing mortgage and

10:06the new mortgage, and as a loan officer, you have to qualify a client for both of those,

10:11all of a sudden, your ability to afford a higher-priced home goes down pretty dramatically.

10:16And a lot of people are getting underwritten to the very top of their DTI ratios today.

10:20And so with a product like Buy Before Resale, we remove that existing mortgage payment from your

10:24liability calculation. And so we've seen people who come to us with pre-approval letters for $600,000.

10:29And by using a product like Buy Before Resale, you can now all of a sudden afford $900,000,

10:34right? Just by removing the debt from your existing home. And so I think what loan officers

10:39in the industry today are starting to realize with our product is, hey, I have a new lever,

10:45right? When a client comes in, instead of just, you know, doing a rate buy down or, you know,

10:50maybe reducing my comp a little bit, instead of doing that, I can actually take away an entire

10:54debt, the biggest debt that they have, their existing mortgage payment from their calculation

10:58and allow them to afford a much bigger home. And that's a superpower that, you know, our loan

11:03officers kind of tout today. And that's why we, you know, kind of created the shirts as well as I

11:08think it's a cool phrase. I'll take credit for the phrase, by the way, Allison. I'll put it on

11:13record that I came up with the phrase. I mean, it sounds like, I think everybody's looking for

11:19additional levers right now to continue to get people into the houses that they're looking to

11:24have and just to facilitate some more deals and make sure that people are happy with the homes that

11:30they're getting in this current environment. Absolutely.

11:32So wrapping this up with a forward facing look and perspective, what are you the most excited

11:42about? How do you see a home light evolving to meet the needs of home buyers and industry

11:48professionals in the future? Yeah, I'm, I'm really excited about this idea of using equity

11:55as a superpower, right? We've started it with our buy before you sell product. We have other products

11:59that I can't talk about that we're working on that I think are really, really exciting.

12:02That will continue that kind of thread, right? And provide loan officers with the tools to just

12:07supercharge their business. I think the goal of home light is how do we find a way to make every

12:14single transaction feel like the easiest transaction in the world, right? No matter how complicated it is

12:19when it comes in, no matter how complicated a loan officer you know, when they, when they view the

12:23application that comes in on their point of sale system and they say, oh my gosh, I don't even want

12:27to look at this deal. There's no point in even trying, right? Let's flip that to, this is easy,

12:31right? This is easy. This is easy. I can do this loan. I can do this loan. I can do this loan.

12:35There's always a solution. There's always a way. And if there is a solution in a way,

12:39it's also easy to execute on it, right? And that's kind of what we're here for. And that's

12:43what buy before resale is. There's a lot of moving parts in buy before resale, right? There's a bridge

12:46loan. There's, you know, removing the existing mortgage liability. There's all these different pieces,

12:50but we do it all, right? And we make it easy for the loan officer to be able to use that type of

12:56product. And so I think for HomeLite, we want to do that for everything, right? We want to make sure

13:00that with any product that you use, you know, as a loan officer, you feel comfortable offering it.

13:06It's easy to offer and you can solve a problem for your hardest clients.

13:10Nick, thank you so much for joining me today and talking about additional levers that the industry

13:15can use to get more people in homes and how the process can be easy. And it sounds like there's

13:22a lot coming that we can look forward to from HomeLite Homes. Thank you for being here again

13:27today. Absolutely. Thanks, Allison.

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