- Every delay during escrow adds risk to a deal going bad.
- Moderne Ventures is building an impressive portfolio of real estate technology products, while VC money flows into real estate tech.
Have suggestions for products that you’d like to see reviewed by our real estate technology expert? Email Craig Rowe.
Moderne Ventures announced last week the wrap-up of a fund totaling $33 million intended to back and offer leadership support to real estate technology companies. In addition, venture capital firm Fifth Wall Ventures just raised $212 million from industry giants.
When I imagine what I could do with these millions of dollars, I mostly conjure images of remote beaches, custom surfboards, and a small, sustainable cabin with a mojito bar.
But if I was a more dedicated professional, I’d focus that cash on real estate business processes.
Primarily, I’d back products that shrink transaction time.
The pressure of keeping on schedule
It’s been my experience, gathered from years of work in an array of real estate sales environments and shared insight from developers and investors, that time is the no. 1 reason deals collapse.
Any delay, even something as minor as a missed inspection or forgotten email response, adds to the pressure of reaching the close on schedule.
Thus, slow transactions are the result of a sales process burdened by paper and, understandably, very busy agents.
I get it — you have many clients and often more than one home in escrow.
So, how can we automate more of the transaction process?
Can bots schedule appointments for us the moment a listing status is changed to “pending?”
What more can be done to ensure closing dates aren’t floating appointments?
There’s always the unavoidable client issues, like a sick family member or worse, cold feet. Those events would be hard for technology to eliminate.
But inspections and due diligence, while never smart to rush, could certainly be made more efficient, right?
Mortgage and escrow delays
What percentage of escrow time is dedicated to financing?
Let’s build a platform that ensures every document has each letter crossed and dotted the moment the lender is ready.
I know. Federal loans are never quick to turnaround. And TRID (TILA-RESPA Integrated Disclosure)? Well, that’s not helping either.
Underwriting delays are not always the fault of the underwriting team; title issues fall through and surprises happen.
And no one likes surprises during escrow. Let’s put technology to work to eliminate that. We should shoot for predictable.
Redefining transaction management
I’ve seen more than two years worth of real estate technology products come through this column, many of which have been really sharp business tools that make it easier to sell a home.
What I hope to see — and maybe the teams and green at Moderne can help — is a transaction management platform that alters how the industry uses the term.
Perhaps we can stop thinking of “transaction” as a general euphemism for “sale,” and consider it an exchange of information.
If we can push the pace of information sharing by better preparing that information, we should be able to harness enough horsepower to make the transaction that much more efficient.
I believe we can improve the way homes are sold — and, ultimately, the number of homes sold — by shrinking the process by which we do it.
There was a time when no one believed man could run a mile in under 4:00, but once Roger Banister proved it possible in 1954, everyone suddenly had a new goal: Run it faster than 3:59.4.
John Landy accomplished that goal less than a month later.
Today the record stands at 3:43.13.
Change is incremental.
Shaving seconds matters, and any movement is better than standing still.
Have a technology product you would like to discuss? Email Craig Rowe