Digital revolution of all things real estate
The global pandemic has accelerated the digital transformation of mortgage & most real estate workflows. You can think about buying property and immediately start looking at available homes in any location via a mobile device. You don’t know how much you can afford to spend or qualify for in the form of a mortgage, so you link up with an online mortgage platform, input your details, and gain a semi-immediate understanding of what you would actually qualify for. You now know how much you can afford, what kind of property you want to buy, so you decide to find a local realtor who can guide you through the showings & sale process, again all on your phone.
Your realtor’s mobile platform plugs into the mortgage platform and she is able to see what you qualify for, what your flexibility may be, and so on. No need to wait a long time for pre-approval letters. You start looking at properties and you find one you want to put an offer in on! All done through your phone, next thing you know your offer is accepted. Thankfully your online mortgage platform leverages digital appraisals, titling, legal support, online notary and more, so you don’t have to wait for 30+ days on your closing and / or spend thousands of dollars on pieces of paper that already exist somewhere and simply have exchanged hands over the past few decades.
You close on the property, with little to no delay via seamless communication with your lender. 6–12 months later you want to get some renovations done on your home. You go back to your mortgage platform to see what home equity lines of credit are available for the work you want to get done. An easy to use site, both mobile and web, has your property details already inserted and photos all loaded up via a built in 3D home design system. You play around with the specific kinds of renovations you want to make and thankfully you don’t have to worry about getting ripped off with any faulty home renovation quotes because your lending platform automatically connects to another site that offers consistent quotes on any plumber, electrician, and general carpenter because they fully employ them all and have hundreds of thousands of renovation data points on file.
Thanks to the accurate information piped in from this reliable, online based renovation provider, your lending system has a good idea of how much the work you want to do on your home costs, and thanks to the aforementioned online appraisal platform you’re able to immediately see how much getting XYZ work done to your home will impact your home value based on comps.
You finally want to sell your place or rent it out because you’re getting married, want to start a family, or just relocate, so you find a frictionless mobile experience that allows you to lock in the most reliable method of renting or selling your place off without worrying about just “trusting” that the realtor will get your place rented.
The aforementioned digital transformations on how we buy and deal with real estate are occurring now; certain companies like Blend, who just raised $300M on $3.3B, roughly doubling their valuation from last August, are living proof of this transformation. Better & Blend have digitized loan origination into the tens of billions and disrupted the point of sale experience with the borrower in just a matter of a few years; companies like Compass, Redfin, and Trulia have put realtors on top of smart tech that makes it super convenient for any home buyer to stay connected to best fit leads; companies like Reggora are streamlining the home appraisal process and making it completely digital; companies like Spruce and States Title are making it so the average consumer doesn’t have to spend thousands of dollars on a document that was accessed just 5 years prior at no real cost; companies like Notarize offer 24/7 access to legal, online notarizations; companies like SplitSpot abstract the tedious rental experience away for tenants & landlords alike; and companies like Intrepid Homes and Nana Academy are bringing transparency and supply liquidity to an underserved market of homeowners who want never ending work done to their homes.
There are missing parts of my narrative here that already do exist online, and there are many missing parts that have yet to even be a thought in anyone’s mind. The point is that over the last few years there has been a paradigm shift in what consumers expect as it relates to convenience and access for the aforementioned real estate services and several companies are capitalizing on this shift. There were over $1.5 trillion of new home mortgages disbursed during 2020 and although many traditional players (banks) play the largest role in servicing said mortgages today, the tables are slowly (yet quickly) turning in favor of online lenders. The property tech world is transforming in ways and at a rate many could not have imagined.
I’ve had the opportunity to advise Reggora for a few years now and we are recent investors in Intrepid Homes & SplitSpot. These are three companies of many who illustrate the scaled opportunity that exists within digitizing various, archaic workflows that exist within the real estate world. The jury is still out on a lot of these innovations and whether they will truly displace the status quo or merely become a market participant that builds a large enough niche to sustain (or not sustain). I personally think a lot of these innovations and all that have yet to come are inevitable and those who refuse to innovate will be displaced, regardless of their market saturation today or whatever regulations make it difficult for new entrants to become competitive.
Special thanks to Kevin Flynn, VP of Product at Reggora, who I’ve mused with on many of these tidbits over the last several months.
