Rethinking Real Estate Tech: An Exploration
Exploring how home buying, one of the most common yet complicated experiences, could be improved.
Ask a homeowner what it’s like to buy a home, and they’ll probably tell you about the agonies they’ve faced. Our experiences of the travails of home buying – and the ways digital technology helped and complicated the process for us – prompted our most recent exploration: From Hassle to Harmony. In it, we develop designs that we wish we’d had when on the hunt.
Buying a home is regularly cited as one of the most stressful experiences people encounter. It’s a significant life change up there with marriage, job changes, and having children. Home buying tends to be an emotional rodeo, especially in competitive markets, and especially for first-time buyers. There’s the stress of being a beginner, for one, having to learn industry terms and processes so that you can be smart about due diligence periods and escrows and inspections. Then there’s the stress of finding a good realtor, someone you can trust to have your back. There’s the stress of making time to visit properties, sometimes the day of their listing. And there’s the stress of assembling and submitting an offer, waiting for a response, negotiating, losing to other bidders, and starting again. Unless the conditions are in buyers’ favor, finding a home can be grueling.
Despite advances in real estate technology like improved access to property listing information, digitized form submission, and democratized approaches to buying and selling, buying a home remains a labyrinthine process of micro and macro decisions. In-person interviews and an online survey of recent homebuyers (those who purchased a home within the last 2 years) helped us identify three points of tension people encounter:
Understanding the tradeoffs between desires and realities. Saved searches based on criteria like price, location, square feet, and other characteristics can help narrow homebuyers’ searches to properties relevant to them. But what if their search criteria are causing them to miss listings they would otherwise be interested in? What if people could explore property availability based on a combination of their search criteria and local historical sale information, so that they could tell that there’s really only a 5% chance they’ll find the home they’re looking for and adjust accordingly? Real estate tools should do more than help people find listings; they should help people learn their market.
Disjoint communication methods. Homebuying can be thought of as one long conversation between buyers and their sellers. While 26% of the people we surveyed found a home within a month, 24% of people took longer than 6 months for their search. That’s a lot of communication, much of which happens through a variety of means: 68% via email, according to our survey, 23% via phone, and 9% through proprietary and other channels. What if communication were integrated within the listing discovery tools buyers use on a daily basis? What if buyers’ interests could be passively conveyed to realtors through the way they prioritize the listings they are interested in?
Anticipating what it will be like to own a home. The first (and sometimes final) test of a property is the walkthrough. Rarely is a home bought that doesn’t need repairs or updates. Yet it can be overwhelming to remember what looks like it needs work, and whether the cost of the work will be a dealbreaker. What if digital real estate tools gave buyers a list of common things to inspect and showed cost estimates based on their area? What if the tool used geolocation to enter a “walkthrough” mode that reminded buyers of things they noted when looking at the listing online, and allowed them to record and save pictures (pictures that might reveal things not shown in the listing photos)?
While technology can’t change conditions like market demand, it can help buyers think clearly about the decision they’re making through helpful choice architectures. Buyers will always want complete, immediate access to listing information, but how can technology help them make sense of it for themselves? How can it especially help first-time buyers navigate the complexity of an unorchestrated, multi-party process and make good decisions along the way? The next step for real estate technology isn’t more access to information, it’s helping people make better use of it.