This post originally appeared as part of the May 16 Intersect newsletter. Click here to view the whole issue, and sign up below to get it delivered to your inbox every week.
For most of us, there are few experiences more tedious than buying a home. We have to deal with loan applications. And gathering documents. And real estate agents. And offers. And insurance. And the title company. Not to mention the process of selling our current home. We spend more time on the process of purchasing a home than we do on actually examining the place on which we're about to drop a serious amount of money.
And that's just in the United States. Internationally, the process can be even more complex.
Which is why it's exciting to see companies like Zillow and Redfin try to streamline the process by letting homebuyers do more of it online and through a single party. While Redfin is adding a "Buy" button to its listings to simplify the offer process, Zillow is looking at owning basically the process from home loan to moving:
- Zillow CEO Rich Barton wants to build 'Microsoft Office for real estate' by adding title, escrow and possibly moving services (GeekWire)_
- Redfin aims to bring e-commerce to home buying (The New York Times)
Combined with upstart companies such as OpenDoor focused on automating home sales, U.S. buyers might be heading toward a future where they don't need to marry the promise of a new abode with the dread of all that work. There's something very appealing about the home-ownership version of buy-online, pickup-in-store, even if it can never truly be that smooth of a process.
Actually pulling this off will be a tall order-especially for Zillow, it would seem-but perhaps there are lessons to be learned from the world of banking and financial services, in general. There, non-banking companies such as T-Mobile and Apple are using their digital chops to simplify the process of opening and managing accounts and credit cards, while also making the user experience more user-friendly across the board (in terms of interface as well as financial terms). In China, payments and lending are opening up to such a degree that small business owners are able to get loans in minutes using only their phones.
Just because a transaction involves money and risk, that doesn't mean it has to be painful. Digital transformation can't make regulations and local laws go away, but it can reduce the time spent searching for lenders and insurers; gathering and signing documents; making phone calls; and driving around town. APIs can connect the parties that need to exchange data. Machine learning and artificial intelligence can help prevent fraud and assess credit worthiness.
Disrupting a long-established and multi-trillion-dollar market is a risky proposition, but the rewards for success could be enormous. If that's not worth chasing, what is?
About the AuthorMore Content by Derrick Harris