Brad Inman had two words for the discussion group that I was part of at Disconnect 2019. “Think bigger,” he told us.
The group included leaders from all over the real estate industry, and Endpoint facilitated the discussion. Our particular challenge was to explore what exactly an on-demand, certain and seamless transaction means in both today’s real estate world and five years from now.
It was not a straight-forward discussion. After all, so many elements of real estate have seen disruption and automation with technology providing a more streamlined experience for brokers and homeowners.
But real estate has always been hyperlocal and there are no standardized processes around transactions today. There are multiple stakeholders, each with an incomplete data set. And each stakeholder has the motivation to own their piece of the transaction. Of course, they all want to close so they get paid, but overall, the transaction leaves the consumer with a less than ideal experience.
Unpacking an end-to-end real estate platform
Purely from a “blue sky” perspective, one end-to-end system would be great — the holy grail of the transaction that we have all been hoping for. But the challenge is this: unless you have both sides of the transaction, what do you do about the other side? If one platform has the buyer, what about the seller? What about the seller’s agent? How do you ensure that the in-house mortgage or title and escrow service is used on every deal when the consumers have a choice?
At a more fundamental level, certain pieces of a transaction, such as title and escrow, are supposed to be managed by independent third parties. This ensures that the transaction closes according to the terms agreed on by all the other parties; buyers, sellers, agents and lenders. But if it’s all owned by one company, there is the potential for inherent bias. The consumer experience would certainly be improved, but how would they trust it’s proceeding in the best interest of all parties? And really, if one dominant player has all the elements, is that really the best for the consumer?
An ecosystem of technology-driven specialists
Having an ecosystem of specialized technology companies, each focused on managing their component piece of the transaction, be that agency, mortgage, title and escrow, is an alternative.
This would allow for the correct amount of independent representation across the transaction and enable each company to focus on the inherent challenges of scaling any one of these verticals, all of which tend to be under-estimated by the other.
However, in order to create the same seamless transaction, they need to have an interoperable suite of technology which talks and shares data across that ecosystem. Can we really expect all of the parties to come together and build systems that talk to each other? Can they agree on a fair and compliant way to split the economics so that the consumer and not just the companies benefit?
Which reality is most likely?
We are in the early stages of figuring out which of these realities will come to fruition. It is likely that the answer will not be as black and white as one or the other, but rather a mix of both across all markets, consumers, companies, and transaction types in the US.
Regardless of which future prevails, home buying should be a wonderful experience. But it’s currently filled with too much anxiety. And at Endpoint, we’re trying to solve for that.
We see a future where we eliminate redundancy and create a transparent transaction built on standardized, real-time communication and information. We see a future where the consumer experience is seamless and holistic.
It’s a lot of work to make something so effortless. But as Brad Inman asked of us, we’re thinking bigger.
Endpoint is a mobile-first title and escrow company that is on a mission to create an effortless closing experience for all parties in the real estate transaction. Learn more about Endpoint here.