What's Next for the
Digital Property Ecosystem?
Published October 22, 2019
At what stage is the real estate industry at with successfully completing a fully digital end-to-end transaction?
Different entities, such as iBuyers, are further along than others. I see an attempt to control the ecosystem from start to finish. You can see it with big and heavily funded iBuyer players acquiring companies like title, mortgage and the like. In a way, it feels like there is a race to see who is going to put that ecosystem together first. I think what we need to keep in mind is that it’s one thing to get all of the pieces, but it’s another to get them to all work together. We’re in the beginning stages of this inevitable wave of activity that we’ll continue to see more and more of. The consumer is driving this, mainly because they want a cohesive, seamless experience.
The property industry is in the early stages of digitizing transactions.
"Whatever you specialize in as a real estate disruptor, you need to build a platform that is open to integration with other partners, in order to create that seamless experience for the end consumer."
Integration across platforms is critical for the digital property ecosystem to be successful.
What's needed in order to make this a mainstream part of purchasing and selling a property?
Integration is going to be a huge part of that. We can’t build all of the components ourselves. Whatever you specialize in as a real estate disruptor, you need to build a platform that is open to integration with other partners, in order to create that seamless experience for the end consumer. Ease of use, such as having a mobile version of your platform will also be important. And, cost is also going to be crucial in order to get uptake. Consumers want a low-cost real estate experience.
"One of the positive effects of integrating this technology into our industry will be to increase the frequency of property transactions."
From a speed, cost and resource perspective, what changes could we possibly see in the industry as a result of this coming to fruition?
Efficiencies will come through leveraging technology, utilizing advancements, such as artificial intelligence and machine learning where it makes sense. By harnessing these technologies, we can drive costs down. A lot of that will involve analyzing where the high touchpoints are, where we can use these technologies, and where we still need the human element. One of the positive effects of integrating this technology into our industry will be to increase the frequency of property transactions. It would be great to make a property purchase as easy as, say, the purchase of a new car.
Speed and cost efficiencies are among the benefits that the digital property ecosystem aims to deliver.
There are so many moving parts are involved a property transaction. However, consumers simply want one place where they can go to that manages the transaction with ease, and I don’t blame them. Other industries have managed to do this, and I don’t see why we shouldn’t be able to follow suit.
"I don’t know if the volume and pace in the commercial world
warrant this technology just yet."
The commercial property sector may take some time to integrate transactional technology, but that is not to say that it won't benefit from it in the short term.
Would it be at all possible to create the infrastructure for commercial property transactions to go all digital, or is this only something that we could possibly see in the residential world?
In the commercial world, speed and cost is less of an issue. However, I think there are parts of what we will have figured out in the residential world that will transfer over to the commercial world. Security during the exchange of funds is probably the biggest element, especially as we move towards blockchain transactions. I don’t know if the volume and pace in the commercial world warrant this technology just yet.
"The question is not whether the contract-to-keys experience will happen, but rather, when is it going to happen."
Like in many other industries, digitization in real estate is moving forward by leaps and bounds, leaving those that don't adapt in the dust.
Is it going to take some time to get everyone onboard for digital end-to-end transaction?
I think there are certain parts of the real estate transaction where it benefits the parties involved to move towards high tech platforms. The mortgage industry has done a great job of embracing technology, but title and escrow is definitely not there yet. Small, mom and pop brokerages may be more hesitant to embrace this change because it doesn’t really benefit them, whereas, larger brokerages see the benefits. It’s probably a 50/50 split in the industry at the moment, but we can feel the disruption every day. The way I see it, the train has already left the station and this is going to happen no matter how much resistance there is. The question is not whether the contract-to-keys experience will happen, but rather, when is it going to happen.
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