Consumers who are used to being able to buy things with a single click want a similar experience when purchasing real estate — and they’re pushing the industry to innovate in complex areas that have long resisted disruption.
Nate Baker, the CEO of digital title company Qualia, argued Friday morning at Inman Connect that much of the real estate innovation that has happened in recent years essentially boils down to marketing. At the same time, he added, “very little has been done to make the transaction easier.”
Baker described transactions as typically slow and painful. But he also believes that the closing process “appears to be changing” because consumers are used to buying things easily online thanks to companies like Amazon.
“They want that same experience when they go through the real estate transaction,” Baker said, referring to consumers’ experience with online retailers. “I think consumers are actually demanding a lot more.”
Baker cited his own company, Qualia, which he said handles about 10 percent of all closings in the U.S., as one of the businesses trying to digitize the paperwork-intensive closing experience. He also pointed to Blend, Opendoor and Spruce as other companies that are pushing tech innovation in real estate beyond basic marketing.
However, all of these companies face challenges. Patrick Burns, the CEO of Spruce — which offers title and mortgage insurance — said that the systems that companies like his want to make over are “complicated” and require bringing multiple players into communication. Burns was speaking during the same Inman Connect session with Baker, and explained that traditionally title companies were located in an office on a main street next to the brokerage they served. But that system doesn’t provide the kind of closing that web-savvy consumers want today.
“It doesn’t work when you’re trying to provide a digital experience,” Burns added.
Both Burns and Baker also expect more technology to emerge that will digitize various aspects of real estate closings. It just remains to be seen how that technology will work and what impact it’ll have.
“We’re super early in the process,” Baker added.