Technology Is Changing How We Buy and Sell Homes
By Kerry Curry | May 3, 2016
The day will come when homebuyers and sellers will do entire real estate transactions online, says Rick Sharga, chief marketing officer of Ten-X.
Sharga predicts that virtual reality tours and 3-D modeling will enable buyers to get amazing detail on listed homes without ever setting foot inside — maybe even enough detail for some consumers to buy a home without physically touring it. This, he says, is just one part of how technology is driving the future of housing.
“This is where the market is going,” he says. “The notion that people will be able to buy and sell properties wherever they are, whenever they want, using whatever computing device they feel like is where the industry is going. That has implications for all of us.”
Technological advancements in residential real estate are already having an impact on the housing industry, Sharga said during a presentation at the April 20-22 Source Media Mortgage Servicing Conference in Plano, TX.
According to the National Association of Realtors®, 92 percent of home purchases include some online activity. Last year, auction.com – a division of Ten-X – sold a $96 million office complex in California online. This may be the most expensive real estate sale through an online auction to date. The sale shows that buyers don’t just want to research real estate online but want to complete entire transactions online, Sharga says.
Informational and Transactional Phases
The market, he believes, is still only in Phase 1 of its transformation.
In this phase, consumers are using the Internet to gather information via sites such as Zillow, Trulia, and Realtor.com®.
It eventually will look more like the online stock trading market, where consumers can easily go online to buy, sell, and trade stocks.
But the housing industry is now entering a transactional phase.
Ten-X launched two online real estate platforms in March – one for residential transactions and one for commercial transactions. Sharga says he expects more companies to follow suit.
Ten-X’s original auction.com platform is for investors buying real estate owned (REO) properties. The two new online platforms, on the other hand, mirror the traditional buying process for market-rate, move-in-ready properties.
The platform’s “Transaction Manager” technology takes buyers, sellers, and other participants through each step of the home-buying process – from accepting the offer through closing. Participants can schedule the activity, assign it to someone, and note its due date. Everyone can see the activities and the progress of the transaction.
“This is intended to make Realtors and consumers very comfortable with the process,” Sharga says. “There is nothing they have to learn. It is exactly what they would be doing offline but with the benefits of being more transparent, more efficient, easier to use.”
Third Phase: Smart Technology Enters Real Estate Transactions
Eventually, real estate transactions will get even smarter, Sharga predicts. When you put your house for sale online, he says, technology will enable you to look for likely buyers and contact them about your listing.
Meanwhile, 3-D virtual tours and the detail they provide online will enable buyers to narrow down the houses they tour. A company called Matterport is already providing this technology, which Sharga expects to become more the norm in the future.
In one of its next development phases, Ten-X expects to incorporate an online mortgage application process into its platforms.
Mortgage Servicing Implications
For servicers, online servicing dispositions will become more important going forward and consumers will continue to push for mobile offerings, Sharga says. Companies that succeed in the long run will be those that figure out what the consumer wants and those that are able to accommodate them first and best, he adds.
“There is an entire generation of buyers coming into the market who grew up buying and selling everything online,” Sharga says. “They don’t want to talk to somebody and if they have to, they get annoyed.”
Kerry Curry is a freelance writer for several Texas and national publications and is the former executive and magazine editor of HousingWire.