How tech is making buying easier — and where it needs to go
Is it possible to create an end-to-end buying and selling solution? Should we give iBuying a second look? Tech leaders discuss these questions and more.
- At the T3 Sixty Leadership Summit, CEOs of the biggest companies in real estate tech talked about where technology is going.
- The goal of an end-to-end platform for real estate companies is achievable, but it will require partnership.
- Alternative models like iBuying may have a place in the future of real estate, but they need to be refined.
The goal of most real estate technology companies seems straightforward enough: Make the homebuying experience simpler and faster for the consumer. Getting there, however, has proven to be challenging and costly.
How to achieve this goal was a common thread throughout many of the panel discussions during the three-day T3 Sixty Leadership Summit last week. (Note: T3 Sixty and Real Estate News share a founder, Stefan Swanepoel.)
Is technology the solution? Or should we look to different buying and selling models, like iBuying? Can all the steps of a transaction be done on one platform?
Where technology is headed
In a discussion about the future of real estate technology, MoxiWorks CEO York Baur said the key to speeding up the transaction is making sure the data moves as seamlessly as possible through different products.
"That's probably the single biggest accelerant to reducing the time and then the friction as part of the transaction," Baur said.
The panelists — leaders of the largest real estate technology companies — included Baur; Andrew Binkley, president of Constellation1; Jimmy Kelly, president and CEO of Lone Wolf Technologies; and Jack Markham, executive VP at Inside Real Estate. The leaders talked about tech's holy grail — the end-to-end platform that many companies in the industry are attempting to create — but noted that it might not be the ultimate solution for every brokerage.
"If you're running a large-scale brokerage, some hybrid solution makes sense," said Markham.
An all-in-one solution remains elusive because it's difficult to control the workflow when multiple businesses, like banks and title companies, are involved. Trying to gather all the information needed can result in slowdowns toward the last phase of the homebuying process: closing.
For a technology solution to work, it needs to be an open system, because no one company has cornered the market on all the tech, Baur said.
Kelly agreed, adding that collaboration is needed to get to that end goal.
"It's our job to build and deliver the best software… but we do need to share data and partner for the success of our customer," Kelly said.
What about iBuying — can it work?
The idea of real estate companies buying a home, getting it ready for market and reselling it was a courageous one, said Alex Perriello, former CEO of Realogy Franchise Group.
"When you look at that concept, it was intended to speed up the home sale process," Perriello said. But he emphasized that while it succeeded on that front, as a business concept, it's likely to fail because it's so capital intensive. "They at least tried… so that's what we need to be thinking about. What do we do to speed up the transaction?"
The challenges of iBuying were brought into sharper focus as the market slowed down, forcing big companies like Redfin and Zillow to abandon their programs, and leaving others like Opendoor and Offerpad to try and make it work.
Can iBuying work in some form? Possibly, said Mark McLaughlin of McLaughlin Ventures, but refinements are needed — like getting the pricing right. The end game, he said, is fixing the model through innovation so it benefits the consumer and takes the friction out of the transaction.
"And maybe iBuyer turns into more of a power buyer model… to make it easier for the consumer to compete with the all-cash buyer," McLaughlin said.
Prem Luthra, who leads M&A for T3 Sixty, expects iBuying to stick around in some form for the foreseeable future.
"Do I think it's going to be the largest percentage of all transactions in our country in my lifetime? Definitely not, but I do think it can occupy a space within our industry," Luthra said.
Correction: A previous version of this story identified one of the panelists as Joe Skousen, CEO of Inside Real Estate. The panelist was Jack Markham, SVP at Inside Real Estate.