Home buying has gone high tech and the market has millennials and fintech companies to thank.
Rewind a few years and most people shopping for a home would scoff at taking a virtual reality tour, applying for a mortgage on their mobile phone or purchasing a house without stepping foot in it. But millennials, the newest crop of homebuyers, grew up with a smartphone attached to their hip and are much more comfortable buying everything from clothing to a house over the Internet. According to a Redfin survey released earlier this year 45% of millennial homebuyers made offers sight-unseen in 2017.
And despite talk the younger generations aren’t purchasing new homes, the National Research Association found consumers aged 36 and younger represented the biggest share of home buyers, 34% of all purchases, last year.
Millennials, as well as their older counterparts, start their home searches online. But they are willing to take it a step further and the real estate fintechs know that. They are rolling out virtual reality tours, speedy online mortgage applications and live streaming open houses.
VR Tours Popular Among Buyers
Take VR tours for starters. In January Coldwell Banker Real Estate polled 3,000 U.S. adults to gauge their interest in virtual reality home tours. It found that 77% of survey respondents want to take VR tours of homes before visiting while 84% want to see video footage. They don’t just want to get an idea of the layout and condition of the home. More than two-thirds or 68% said they want to use VR to see how their current furniture looks in the home. What’s more 62% of survey respondents said they would go with a real estate agent who made VR technology available. Recognizing the demand, Sotheby's International Realty offers customers 3D and virtual reality tours of its properties. Sotheby's said on its Website that the 3D and VR Tours are made possible by placing cameras throughout the home. Users can view the 3D tour directly from the Sotheby's website and VR tours via a mobile device that is paired with a VR headset.
Real estate has also gotten more social with some real estate agents using Facebook to host real-time open houses via Facebook Live. RE/MAX, the real estate company, recently highlighted one agent in Winnipeg, Manitoba that uses Facebook Live for his open houses, giving viewers a real-time tour of the house and simultaneously answering questions from the comment section. The live stream is recorded automatically, turning the open house into a virtual tour that can live indefinitely online.
Mortgages Get Speedier Thanks To Tech
Technology isn’t only disrupting the home search process but it is changing the way people apply for and are approved for mortgages. Take Quicken Loans’ Rocket Mortgage mobile service that enables a would-be borrower to apply for a mortgage in minutes. The loan closes in less than a month, something most traditional lenders can’t do. Rocket Mortgage is a pioneer in this area but it's not alone. Lenda, the mortgage lending fintech that’s been in the market since 2014, boasts the ability for borrowers to fill out the the application in minutes and for the loan to close in two weeks. The company told American Banker earlier this year the goal is for a mortgage transaction to take thirty minutes. Lendra is able to speed up the process by having the underwriting begin as the customer fills out an application. Lendra also automates as much of the work as possible including income and employment verification. It enables customers to log into their bank accounts from the platform to get the bank statements necessary for the mortgage, furthering speeding up the process. Other fintechs going after the mortgage market include Social Finance, otherwise known as SoFi and Roostify.
Voice Command Real Estate Searches Coming
Still in the early phases of deployment, a new technology making its way into the real estate market are chatbots. Thanks in part to Amazon.com’s Alexa and Apple’s Siri voice activated assistants, the ability to interact with the Internet and devices via voice is growing in popularity. That hasn’t been lost on a handful of technology companies that are working on apps to enable users to search real estate listing and get information via natural language commands. Ask DOSS, a startup out of Houston Texas, is working on an intelligent personal assistant that is said will be similar to Siri, but exclusive to the real estate market. Users will be able to ask the app questions about a property and get instant answers 24 hours a day. The company is developing the app for the residential real estate market but said on its website the next phase of development will be answering questions and displaying listings for commercial properties. A beta launch of the app went live in October of 2017. The company is working on a relaunch and is tight-lipped about when it will bring it to the market.
With all this technology at the ready, fintechs are transforming the way we buy homes. The older generations may not be ready for it, but millennials and those younger are. They have come to expect technology to drive all aspects of their lives including the home purchasing process.