A Letter to Our Customers, Partners & Future Homeowners

I wanted to address a recent article that was written about Divvy Homes. The article is a disappointment — not only because it fails to do justice to the important work we do but also because it focuses only on what can go wrong.  

Divvy is successful when our customers are successful.1 This is the core tenet that underpins Divvy’s business model. To succeed and be a leader in the space, we must deliver on this promise and our mission. 

Until we’ve reached 100% of our customers buying their home from Divvy, we still have work to do. That being said, I want to emphasize how proud I am of how many homeowners we have created already. Since founding, well over five-hundred of our customers have become homeowners. In fact, approximately half of all of our customers who have finished their lease have chosen to buy their home from Divvy and become homeowners.2 As Moody’s reports, this is two times better than our closest competitor.3  

At the same time, we work tirelessly to produce successful customer outcomes. We’ve supported our tenants by coordinating with rental assistance agencies to apply for and receive nearly $1 million in financial support for our customers. We’ve structured flexible payment plans and extended timelines for move-out when needed. We go through great lengths to avoid an eviction, which is a bad outcome for all involved; unfortunately we do on occasion have to pursue that path. We do not take this step lightly, and we always strive to learn how we can better set our tenants up for success in the future.

Lastly, even if our customers decide to not buy the home, we’re thrilled that they walked away with an average of almost $14,000 in savings.4

But that doesn’t mean we’re done — we are only just getting started. To deliver on our mission of making homeownership accessible to everyone, we must innovate and continue to evolve our model. It comes with the territory of being the leader in a new space. 

Where Divvy Can Improve: We’d be remiss to ignore the opportunity to learn from our mistakes and improve our service, our customer experience and our business. We’re not perfect; we know that. But it’s in Divvy’s DNA to make sure that we are constantly focused on improving how we serve and support our customers, partners, and future homeowners. Some specific areas:

  • Maintenance: Divvy works with thousands of households across the country. On average we respond to all maintenance requests within ~2 hours and complete those requests within 3 days and even faster in an emergency. Unfortunately, the author of the article chose to highlight two customers (out of thousands), and, in addition, reported many inaccuracies.5 That said, we are always striving to learn and grow and are actively investing in new technologies and partnerships to improve the way we respond to maintenance requests.
  • Rental Pricing: With rising home prices, rent across the nation has increased. In this past year, the national median asking rent increased by 14% and in some of our markets by as much as 38%.6 Despite these increases, we did not consider or make any changes to existing customers’ scheduled rent payments. For new customers, we offer the ability for them to pick out any home on the market and give them the option to buy that home. We strive to always provide our customers with the best pricing possible while also acknowledging that we have to cover the costs of purchasing and servicing the homes. That said, as interest rates come down, we will aim to pass cost savings on to the customer.
  • Customer Costs: We believe that Divvy provides customers with flexibility and upside, while minimizing the upfront costs associated with becoming a homeowner. A customer who buys a home on their own would typically pay up to 5% of the purchase price in fees, consisting of mortgage origination fee, appraisal fee, home inspection fee, title search insurance premiums, etc. Divvy covers 100% of the closing costs associated with the transaction; the customer pays no fee to apply and no fees associated with closing. When a customer moves out, we charge a relisting fee to partially cover the costs of cleaning, repairing, and selling or re-renting (which typically costs around 7%).  We understand that life happens, and not every customer will ultimately want to buy the home back.  This is OK with us, and we therefore cover the large majority of these costs. We will continue to work to lower these costs with the goal of returning even more to the customer.
  • Product Evolution: Divvy is continuously innovating to provide customers with more choice and flexibility in their pursuit of homeownership. We will continue to evolve our products to ensure we are meeting customers where they are, and setting them up for long-term success. 

While we have work to do, I have the utmost confidence in our team — along with our extended network of partners, agents and contractors — to work tirelessly to improve how we serve future homeowners. We’re not perfect, but I know that we’ve instilled a culture that is centered on doing right by our customers. 

I woke up this morning to the team coming together over slack with a game plan on how to better serve Ms. Gutierrez. This is Divvy. We are a small but mighty team that cares, above all else, about our customers and mission.  And I can assure you, we will never stop working to improve.


1 Divvy is not designed to profit from bad customer outcomes. Divvy is most profitable when the customer is able to buy the home from us. An eviction, which is the worst outcome for a customer, is tremendously costly to Divvy as well, and only used as a last resort. From a cost basis, we spend on average ~7% of the home value on legal fees, renovation costs, broker disposition fees / re-listing costs. Less the 2% surrender fee, this nets to 5% of the home value in eviction-related costs. This is an important distinction from the predatory housing contract selling model, which was structured such that the owner benefited from the tenant failing to make payments and losing their option.

2 The percentage of customers who have bought their home from Divvy is calculated by dividing the total number of customers who have bought back their home divided by the total number of leases ended during that same time period.

3 Source: July 2022, https://www.moodysanalytics.com/-/media/article/2022/lease-to-purchase-how-build-homeownership.pdf. The recent article also cites purported Landis’s buyback rate, though we believe they have only purchased a couple hundred homes on behalf of their customers, and therefore, given their small size, it’s not an appropriate comparison point. We estimate the number of homes in Landis’s portfolio by analyzing public transaction records tagged with Landis purchasing entities and/or the Landis corporate mailing address.

4 This number was calculated by totalling each customer’s accumulated option payments, for those who completed their lease in good standing, and subtracting the relisting fee and then taking the average.

5 We have never previously shared customer information out of respect for their privacy. However, the reporting for this article was particularly misrepresentative, so we’ve decided to share the work orders in order to provide our account:

  • Heating work order #1 was generated 01/28 at 6:24 am with an indoor air temperature of 74 degrees as reported by the resident.  The ticket was dispatched to a technician at 9:32 am and the heating was serviced at 2:30 pm.  
  • Heating work order #2 was generated on 02/03 at 8:56 am with an indoor air temperature of 75 degrees as reported by the resident.  The resident was contacted by phone and email at 11:06 am (given acceptable internal temperature of 75 degrees) with a recommendation as to how to increase airflow to certain rooms as desired with no response.
  • Heating work order #3 was generated on 02/08 at 9:48 am with an indoor air temperature of 66 degrees as reported by the resident.  Given non-response to previous correspondence on 02/03, the resident was contacted via email at 10:22 am.
  • Heating work order #4 was generated on 02/14 at 11:16 am with an indoor air temperature of 62 degrees as reported by the resident.  Given the temperature drop, the ticket was dispatched to a technician at 1:04 pm and the heating was serviced on 02/15 between 2:00 pm-4:00 pm. The vendor noted that the fuse burnt out and the main breaker tripped likely because the resident set thermostat to 90 degrees. 
  • Heating work order #5 was generated on 02/17 at 3:02 pm with an indoor air temperature of 77 degrees as reported by the resident.  Given the recent previous servicing, the ticket was dispatched to a technician under warranty at 3:22 pm and the heating was serviced on 02/18 between 8:00 am-10:00 am.  Technician noted that the amp breaker tripped again, likely due to improper thermostat usage. Divvy purchased and installed a new amp breaker.  This was the last work order we received from the resident.  

6 Source: July 2022,  https://www.redfin.com/news/redfin-rental-report-june-2022/