If homeownership has become synonymous with the American dream, why does the real estate process sometimes seem like a nightmare for both agents and consumers?
Whether you’re an agent, broker or loan officer, chances are that at some point you’ve felt frustrated or disappointed by a real estate transaction that didn’t go the way it was supposed to. And you’re a trained professional.
Imagine how it must feel for a homebuyer who is more emotionally and financially invested in a property.
The stress of undertaking one of the biggest purchases of their lives can make even the most laidback homebuyers feel like "normal" roadblocks are insurmountable and their agent is out to get them.
And even when a transaction goes smoothly, agents must juggle being responsive to their buyers’ needs and expectations — which can change from day to day — while trying to coordinate all of the details and negotiate the best deal for their clients.
ABC Tools screenshot.
Having experienced my own first-time homebuying headaches (which involved firing my original agent and trying to go it on my own until I found the right agent), I know firsthand that it is a lot to manage.
And there’s a lot of room for improvement in how the process works.
That’s why Michele Serro founded The ABC Tool in August 2011: to rethink and redesign the real estate experience. After two less-than-stellar experiences buying an apartment in New York City, Michele decided to use her expertise in human-centered design to make the real estate process more transparent and enjoyable for everyone involved.
A graduate of The Juilliard School, Serro sang opera before starting a career in design that included several years as an associate partner at the award-winning design and innovation firm IDEO, where she helped open the company’s New York office.
At The ABC Tool she is leading a team in developing online education and coordination tools to help consumers and agents navigate each step of the house-buying process together — from the initial decision to work together, through financing, the house hunt and, ultimately, the closing process.
She describes the team’s design-driven approach as "human-centered, iterative, collaborative, experimental and optimistic." Those terms are not typically associated with the real estate business, and that’s precisely the point of The ABC Tool.
In beta now, The ABC Tool’s service will become available for all agents in the first quarter of 2012. The company will also be exhibiting at Startup Alley during Inman News’ upcoming Real Estate Connect conference in January.
I asked Serro about the idea for the company, her background, and her company’s efforts to improve the real estate experience.
Q: What inspired you to launch The ABC Tool?
A: I was really inspired by my own journey and needs. When I purchased my first apartment in New York City in 2007, I had this feeling of helplessness that my fate was lying in the hands of people I didn’t trust. There is so much information out there, and much of it is hard to digest and presents conflicting perspectives.
I was raised by two amazing parents who taught me to believe I could do anything. However, they forgot to mention that even though I was financially ready to buy a home, I would need to prepare myself for a crazy emotional rollercoaster and a tremendous amount of inefficiency.
In 2010, I was buying and selling at the same time. But even though it was my second home purchase, I still felt like I didn’t know who I could trust. At 2 a.m., when I was having buyer’s remorse, I had nowhere to turn to remind me of why I was doing this in the first place.
Q: Are there any lessons that you learned from being an opera singer that you’ve applied to your role as an entrepreneur and CEO?
A: Absolutely. So many things, (like) confidence, empathy, passion, the value of the ensemble. I believe that we all should be doing what we are passionate about every day. In order to design a great experience for someone, I believe you need to have true empathy for that person.
When I was studying a role, I had to do that in order to perform — I needed to understand what that character was going through.
Q: How did you go from performing to working in the innovation and design space?
A: I have always been attracted to good design and to people and companies that prided themselves on believing things could be better. A good friend of mine called me to ask my advice on the opening of IDEO NYC about seven years ago, and the rest is history.
Q: How is the work you’re doing now influenced by the time you spent at IDEO?
A: My time at IDEO was invaluable, and I am the human-centered designer I am today because of my time at IDEO. The IDEO process starts with deep empathy for people in order to design products, experience and services that address unmet needs and wants.
The ABC Tool has been in the works for a while, and I can’t tell you how many prototypes were created. (Prototypes are) a core aspect of the IDEO process. Iteration is our middle name. We use design to learn and think.
Q: What type of research did you do to better understand the real estate experience before you started developing The ABC Tool solution?
A: What type of research didn’t we do! I personally have probably spent over 1,000 hours with agents, homebuyers and the entire cast of characters in the homebuying journey. Spending time with people is really core to our process at ABC.
We are big fans of (Eric Ries’ strategy for) "The Lean Startup," and so we are constantly trying to learn with our users by using small experiments. We usually don’t let a couple days go by without showing an agent or a homebuyer a sketch or new feature.
Q: What were some of your key findings about the homebuyer’s experience?
- Homebuyers range from wanting low- to high-touch experiences with their agents. Some homebuyers want complete autonomy, choosing to look at listings and homes by themselves; others want an agent to merely function as a sounding board; while yet others expect high-touch service from their agent, seeking accompaniment to showings and someone to run the deal.
- The real estate agent is the sun around which all other planets, and parties, revolve. As a central figure in the homebuying scenario, the agent needs are currently underserved by the market as well — from generating leads, prequalifying homebuyers, managing documents, and managing the expectations of clients.
- The process feels opaque, decentralized and out of control to most homebuyers. Homebuyers are seeking a single, centralized resource and repository to increase transparency around the process and communications between all stakeholders involved.
- Homebuyers seek validation and support throughout the process. Many homebuyers turn to friends and family members to provide both administrative and emotional support throughout the process, or are advised by other trusted service providers in the process.
- Document collection, management and sharing is a serious bottleneck. For all service providers involved in the buying or selling experience, document management is a critical, and often painful, part of the process. Missed milestones (often due to missed deadlines in document filing) can have lasting domino effects, ultimately impacting a homebuyer’s closing date.
- The complexity of buying a home today is exponentially greater than it was a few years ago. The housing market crash has resulted in fewer leads for agents, increased rigor, due diligence and regulation around financials, and extended timelines for those looking to buy.
Q: Who’s your target customer? Do you see The ABC Tool being primarily for first-time homebuyers?
A: Right now, I would say our target is a slightly more tech-savvy real estate agent who wants more efficiency. While the first-time homebuyer can greatly benefit from the tool, we have also found that more savvy homebuyers are also interested in using it. So we really have two targets we are designing for: the agent and the homebuyer.
Q: According to your research, what are the biggest or most common frustrations that real estate agents have about the home buying or selling experience?
A: I would say lack of loyalty to an agent on the part of homebuyers, as well as homebuyer education. (Agents) seem to be the first to be blamed when something goes wrong, and the last to be credited for success.
Q: You recently wrote in a blog post that The ABC Tool helps good agents become great ones. How do you do that?
A: Our tools and features coordinate agents and homebuyers seamlessly together, recasting the agents as the indispensable experts they are and supporting them in operating efficiently in an increasingly inefficient business environment and broken system.
(ABC Tool) takes care of much of the administration, so agents can focus on sharing their expertise of a certain area and putting best practices to good use — rather than filling out paperwork.
We also coordinate all the other players, like attorneys, inspectors and even lenders, and clearly spell out their roles and responsibilities along the way.
Q: What other products or features are you working on?
A: We employ an agile development approach to ABC, so we are releasing new features every day. We are iterating on the current experience every day and look forward to releasing (a new) version of the app in the coming weeks that will be a revised experience for the agent and the homebuyer.
ABC Tools screenshot.
Want to recommend a RE tech startup for an upcoming Startup Scene? Send your ideas to Natalie Fonseca at firstname.lastname@example.org.
Natalie Fonseca is the co-founder and executive producer of Tech Policy Summit and the Privacy Identity Innovation (pii) conference, and the content producer for Inman News’ Data Summit and Real Estate Connect. You can follow her at @TechPolicy.