Can home buying be brought into the digital age? - Can home buying be brought into the digital age?
Can home buying be brought into the digital age?
Twenty years ago, if you were involved with the Web in Boston, one of the people you likely ran into was a forward-thinking Cambridge real estate broker named Bill Wendel. In 1995, before most people had Internet access at home, he opened the Real Estate Café outside of Harvard Square.
Wendel saw the Internet as “a tool to correct the problems in the industry,” giving buyers more information and lowering the fees they paid as part of buying a home. But in 1995, there wasn’t a way for buyers to search the primary database of for-sale properties — so Wendel opened a storefront where they could do that, long before Trulia, Redfin, or Zillow came along.
But even as searching for a home went digital, many parts of the process — like setting up showings, crafting an offer, securing financing, and sealing the deal — remain stubbornly analog, requiring phone calls, meetings, signatures, and extensive paperwork-tracking. Why?
“That question is worth a graduate-level course,” says Wendel. “The industry knows it is ripe for disruption,” he says, but entrenched players are content with the status quo. After all, fees paid out to agents on a $1 million sale can reach $60,000.
Several local startups, however, are trying to chisel away at the status quo.
Ted Werth, founder of Bedford-based RoostWise, says people “are used to hailing an Uber from the app — they conduct their lives through their mobile devices.” His app, available for iPhone, tries to make it possible to get an Uber-like response time from real estate agents when you want to see a property.
“We have first-line agents who work for us who will contact you within five minutes,” says Werth. But when you go to view the property, you meet another broker who specializes in that community — one who is independent, rather than a RoostWise employee. If the process moves forward, that broker uses the RoostWise app to keep you apprised of where things stand. For instance, has the offer been signed? Has the appraiser’s report been completed?
RoostWise raised $800,000 from investors this summer, and launched its service in Massachusetts in September.
A two-year-old startup in Salem, Easy Mortgage Apps, hopes to simplify things for buyers and mortgage lenders by offering a mobile app that displays where things stand. “You fill out a loan application online or on a piece of paper,” says chief executive Michael Kelleher. “But from that point on, your interaction with the loan officer and the bank will be through the app.” You’ll be able to see when an appraiser is slated to show up and when the closing is scheduled.
Easy Mortgage Apps is already working with 80 banks around the country; getting loans done more quickly can cut costs for lenders and help buyers avoid rate-lock extension fees when the process drags out.
When I did a Twitter poll of people who bought homes in 2015, some said the process was becoming more digital, save for steps like getting the bank to cut a cashier’s check or showing up for the closing. But Tom Wentworth of Winchester was more typical: His purchase was “an entirely analog, old-school process” with “endless paperwork” and faxed documents.
Remember Bill Wendel, the guy who saw how the Internet was going to change buying a home way back in 1995? I called him the other day to find he was still working to make home-buying more “consumer-centric and affordable,” in his words. This past Wednesday, he was among the organizers of the Boston Realty Party (held on the anniversary of the Boston Tea Party), a gathering focused on fomenting revolution in the real estate industry. One of the topics they explored: using digital payment systems like Bitcoin to reduce transaction costs.