NEW YORK–In imagining a business architecture for the digital real estate transaction, experts and the companies involved agree that a set of technology standards is crucial in moving this machine forward. They also say establishing these standards is among the most difficult and expensive tasks at hand.
Bill Bain, chief technology officer of HomeGain, used an example of a Home Depot cashier to explain the idea of seamlessly pulling the parts of a transaction together. Bain, during a panel discussion at Inman News’ Real Estate Connect 2005, pointed out the cashier station’s various components, labeling the cashier as the transaction coordinator, and the various tools at the station as components.
You can’t really conceive that in Home Depot you can expect to not be able to buy certain brands at certain cash registers, Bain said. But that’s exactly the concept of real estate transaction systems without standards.
The real estate industry currently has RETS – The Real Estate Technology Standards group – which has been attempting to lay the groundwork in this arena. The mortgage industry has MISMO, which was conceived before RETS and has far outpaced the group in reaching any sort of resolution on the mortgage side.
“RETS and MISMO need to integrate,” Bain said.
The industry also has standards such as IDX – Internet Data Exchange – which sets guidelines for how realty professionals can obtain listings from MLSs and display them on the Web.
The business around a paperless or digital transaction involves coordinating several roles, including the transaction coordinator, service providers, brokers, agents, consumers and Realtor associations and MLSs. One can imagine how difficult it is to facilitate communication among these roles without a uniform system of technology standards.
Looking ahead to where we’ll be in two years with a “paperless” or “automated” workflow surrounding the real estate transaction, Chip McAvoy, chief technology officer for First American for First American Residential Group, thinks the process is inevitable.
“Necessity is the mother of invention,” McAvoy said. So the problems will be resolved eventually, it’s just a question of how they will be worked out.
The technology and solutions are getting more sophisticated. The industry now is moving out of the era of dot-com companies selling glorified task sheets, and getting into the pieces that have the ability to create vast changes.
McAvoy expects to see today’s transaction systems evolve into data hubs for the purpose of transacting information with the consumer.
“That’s where you get to the dollar savings,” he said.
McAvoy echoed Bain in saying that the issue of standards has to be solved for transaction management and digital transactions to work in real estate.
Paul Hill, chief technology officer of Guru Networks, said there are some forward-looking brokers who are putting in the necessary infrastructure. “The vision of the future of transaction management is to a large degree brokers stepping up,” he said.
Martin Scrocchi, CEO of TransactionDesk, also discussed the challenge of the current standards situation with both MISMO and RETS.
“The challenge we see is standards: You have RETS on one end and MISMO on the other,” he said.
The architecture of the business will be based around the technology in the end, Scrocchi said of the future of these transaction systems and paperless real estate transactions. But, “it’s going to take awhile.”
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