Purchasing a property will be as simple as ordering a latte.
That’s the ‘Latte Vision’, as it’s named, of Brad Inman, publisher of US-based Inman News, who recently presented his idealised view of the future at in the Inman Connect conference.
Mr Inman’s view sees homebuyers using their smartphone as part of an automated process involving the supply of information about the house and neighbourood, through to uploads of personal account and financial information – including loan preapprovals and credit history – which are retained in a password protected domain on the cloud.
Not only would this information be used to guide the buyer on what price to offer, but once the buyer’s agent and lawyer are given access, a contract can be created and sent to the seller’s agent and the mortgage process started.
“The pre-homebuying process, which requires a little data entry, would function like the Clear Card, which fast-tracks you through airports once you have given the government the necessary information to expedite you through Homeland Security,” he said.
In a blog posted by RP Data about the event, which it attended, the unnamed commentator said while they didn’t agree with Mr Inman’s view entirely, “I absolutely agree with the philosophy that the property transaction can be made much more efficient”.
“Digital document transfer, administration and signing is already happening to varying extents in Australia; US agents are arguably further down the track with applications like Docusign, Dropbox and, to a lesser extent, Dot Loop, firmly entrenched in the their work flow.”
RP Data’s commentator said Mr Inman glosses over some parts of the property transaction, a view that others in the local industry have commented on in relation to For Sale by Owner websites, and the value that real estate agents provide.
“From a personal level though, he seems to gloss over, or miss completely the inherent complexities involved in a real estate transaction, the role of the agent as an intermediary and consumer mistrust of what can be seen as privacy invading technologies,” RP Data said.
“These factors are going to be significant hurdles to the Latte Vision. Additionally, there are other regulatory obstacles – banks need to be comfortable with digital signatures and transfer, and we need to be sure that these digital documents are completely enforceable. Not only would a paperless transaction be more efficient, it would also be more secure and help to minimise the risk of fraud (digital records are much easier to cross reference and data mine).
“Some elements of the Latte Vision are already here, some are just around the corner, and some might be just fanciful thinking for the foreseeable future. What is certain is that the way real estate is bought and sold is already changing. To make progress here in Australia, the first steps will involve greater acceptance of digital documentation and digital signatures. We need to see greater collaboration between the banking, insurance, legal and real estate sectors, and also of course with state governments who administer the titles. Cross referencing data sources and digital transfer of information will be a critical element in improving efficiencies of the transaction.”
“Agents who have jumped from the analog to the digital age early have gained some serious competitive advantage for themselves.”
Yet, as RP Data points out, another speaker was highly critical of this view.
“You can dominate social media, be well and truly into the cloud and fire off digital documents all day long, but the secret to a successful business is always going to be hard work.
"I think the secret sauce will ultimately involve both.”