As you likely read this, the 101st annual Florida Realtors convention is in progress up to Orlando. Three days of workshops, presentations, and a trade show, followed by two days of committee and governance meetings. Realtors getting a little party on, with some professional components.
I am now four years in the real estate industry, and it never ceases to amaze me.
A couple weeks ago I had a closing for a very nice single family home. Oh it is not that this closing was any different from any others. But it is abundantly clear that this industry, practically from first customer contact through to closing, operates at one technological step above a quill pen! Piles of dead trees that make this US Green Building Council member’s heart sink. And the wasted time.
I mean, it is 2017, people. 2017!
I don’t want you to think this column is all about throwing stones. I have made a daily commitment to “living in the solution”, as it is said. I very quickly recognized that the potential for platform disruption in the real estate industry is immense.
Others have seen that, too. Consider the provision of financing for the purchase of property. While we do have many cash buyers here in South Florida (fewer than during the early part of this decade, but still quite a few), most people will borrow money to purchase real estate. And as most know, the government provides substantial incentives for this through the generally full deductibility of mortgage interest expense.
Entering into this process as a major disruptor (or, perhaps more correctly, at least for now, disrupter in utero) is Quicken Loans and their nationally advertised (at great expense) Rocket Mortgage. Just scan and email, and they will do the rest, they claim, speedily and efficiently.
But my experience has been that the promise does not live up to the performance.
I don’t appreciate it when my clients are misled. But when I, personally, am materially misled, in writing, I doubly do not appreciate it. And given the stories I hear from mortgage broker friends, it’s not that Quicken singled me out. I’m told that last minute Quicken Loans nightmares are more common than they should be.
I can definitely see where using Quicken for a refinancing might work well. But for a primary residence, especially for a first time buyer, they in my opinion don’t quite have the rocketship fueled properly. Not just yet.
Now, I do not think my mortgage broker friends should breathe a sigh of relief. In my opinion Quicken Loans is actually very close to a game changing breakthrough. They are not there yet, but they are close. You can argue about whether pursuing primary residential business as aggressively as they do, without having all the bugs out, is the right business strategy when dealing with something as emotional and stressful as the purchase of a home. Software companies do this all the time, shipping product that has not been fully beta tested and then issuing a v2.0.
And anything that can be digitized, computerized, is, in effect, software.
Quicken might become a killer app, in my opinion, in the way that Zillow, Trulia and realtor.com have been game changers for real estate brokers and agents. Shipping product that is not fully stress tested is a proven and workable strategy. But hope is not a strategy.
I predict that within five years there will be many fewer real estate brokers and agents, and many fewer mortgage brokers.