Will buying real estate soon be as easy as buying a coffee?
Last week I had the benefit of attending the Inman Connect conference in the USA. I like getting to Inman each year; it’s a great way to keep up to date with new technologies, trends and evolutions in best practice that are relevant to the real estate sector. This year was no different, so I thought I would share some of the things I thought were most interesting.
I’ll be sharing my notes over two parts – the first part explores what Bradley Inman calls ‘the latte vision’ and the second covers off on some of the new trends, apps and utilities that are starting to emerge in the US as must haves and must dos across the property sector.
One of the key themes this year was what they call the ‘latte vision’, where purchasing a property will eventually become as easy as purchasing a coffee. While I don’t really agree that buying or selling a property will ever be that streamlined (you don’t need finance approval before buying a coffee, for example!), however, 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 workflow.
In a more practical sense, the ‘latte vision’ means more than moving to a paperless transaction environment; it means that a large amount of the paperwork ceases to exist. Speakers at Inman were looking forward to a time when buyers are financially pre-approved on site with a tap of their smartphones. At the same time their phone transfers vital details like contact details and preferences back to the agent. Their mobile device would also download the latest research, comparable sales, brochures and neighbourhood information. Documents are created and controlled in the cloud, pre-populated with cross-referenced data sourced from a variety of databases. Signatures are digital and documents can be executed on any platform that has access to the internet (be it a mobile phone, tablet or computer).
Bradley Inman gives an entertaining summary of his latte vision here. 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. 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 minimize 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. For those looking to gain the first mover advantage here in Australia (it’s not too late) it would be worthwhile checking out some of the trends and applications I have outlined below and look up your own US case studies. When technologies are moving this fast, it becomes hard to catch up if you get left behind.
From a completely different perspective, another speaker was direct in his cynicism of the latte vision, reminding the audience that 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!
Tim Lawless is national research director of RP Data.