Let’s dive in and find out. But first, let’s take a step back so that we can comprehend how a home is even purchased, sold, or improved in the first place.
- Your home search starts online today; in 20 years, this will be the norm for home financing, buying, remodeling, and selling.
- Imagine having one place where you could search, find, buy (or rent), finance, improve, and sell your home.
- Banks, real estate firms, tech firms, and media outlets will cooperate and compete for your business, but you will win in either case.
- Just like you do with your iPhone or your car, trading homes should be done through a single shop.
Home Buying and Selling 20 Years Ago
We can see what has changed and what hasn’t by buying at how long ago I bought my first home—nearly 20 years ago.
Even though I had a successful early career in finance, I did not first have my loan pre-approved. I had been saving for a place to buy with my girlfriend (at the time). We decided that was the life for us after attending a party at a cool loft in Chicago’s emerging Bucktown neighborhood. This was before Zillow, so we started stumbling into weekend open houses in the neighborhood. As a result, we were able to find a realtor who showed us more condos. After beginning our home search, we finally had our mortgage pre-approved.
The realtor set us up with a lender, and we followed up with two other lenders after consulting with the first one for a few weeks. Following our selection of a lender, the mortgage pre-approval process required an additional one to two weeks and a large number of (actual, not digital) signatures, faxes, scans, emails, calls, and meetings.
It took another 40 days of work, mostly on property inspections, appraisals, HOA analysis, etc., before we finally had an accepted offer on a condo. Then we closed, and moving and making improvements became an entirely new struggle. The joy of being a homeowner will follow. the psychological benefit.
When buying a home for the first time or selling one to buy another, this is typically how it goes.
Single-Stop Home Ownership
Your search for a home now starts online. This home search is the ground for how home buying, financing, remodeling, and selling will look in 20 years, regardless of where you start.
Imagine having one place where you could search, find, buy (or rent), finance, improve, and sell your home. What if you could still shop around to make you are receiving the best loan deal? What if loan approval was a digitally instantaneous process rather than a lengthy, paper-intensive 40-day process?
All of this is currently happening.
As it develops, banks, real estate firms, tech firms, and media firms will cooperate and compete, but you will come out on top because they are all vying for your business. Just like you do with your iPhone or your car, trading homes should be done through a single shop.
Education and home search versus buying and selling
What’s the real work of this?
You begin your home search process on Investopedia or other educational websites. You, however, are not in the home-buying process. Shopping and education go together. Let’s take a look at some houses. What is their price? And how exactly do financing and purchasing operate?
We think in this manner. It’s a digital recreation of what my wife and I went through in Chicago almost two years ago. Visit some places, gather some inspiration, and feel something. Then, start taking negotiations seriously.
In 20 years, buying a home—for most of us—will still be an emotionally charged decision. This indicates that your objective of obtaining what you want takes priority over all the details of financing, contracts, moving, and contractors.
The Future of Home Buying and Selling
This feeling is now the core of all homeownership innovation. Let’s examine the vision from three different angles.
Vision for Buying a Home
- Take out your phone and search up homes.
- To give you a true “tour” of the home on your phone, view homes using complete 3-D modeling and video.
- View all details regarding the home, neighborhood, schools, dining establishments, crime, etc.
- To stay organized, tag the homes you like.
- Receive updates on home sales and price changes over time.
- Push a button to make an offer on a home.
- Avoid a drawn-out appraisal process because all lenders accept this automated valuation method, which is supported by data, 3-D modeling, and video.
- Close on the home right away because your loan is always approved through your secure blockchain wallet with up-to-date information on your income, data, debts, and credit score, which determines how creditworthy you are. All you have to do is submit your always-approved profile and choose the best lender quote.
- To make your move easier, look for, select, and schedule locally based licensed and reviewed movers and contractors.
- Plan food delivery from your new neighborhood’s top restaurants for moving day.
- Home Improvement in the Future
- On your phone, view 3-D images of your home and build your new kitchen (or other home improvements) similarly to how you might today build a new car.
- As you construct your home improvement project, choose and estimate each feature.
- View and make adjustments to the project’s line-item cost as well as the before and after views.
- To help you plan your budget, make out exactly how much each line item improvement affects the value of your home.
- To complete the work, find licensed and vetted local contractors in your shop and hire them.
- Include contractor fees in the project’s overall price.
- Due to the automated valuation being accepted by all lenders and the fact that your loan is always approved via your secure blockchain wallet, you can close your home improvement loan immediately.
- Set a start date for the project with the newly hired contractor.
The Future of Home Selling
- Say that you want to sell your home by filling out a brief form on your phone.
- Get an offer to close a home in one to two days, and the closing can happen as soon as seven days later.
- If you don’t like the instant offer, you can also look around and hire a reputable local realtor to list your house.
- Ask you if you’re buying a new house, and if so, prompt you to take the actions listed in step one above when buying a house.
How far close are we from this vision?
In many markets today, there is the option of instant selling (or connecting with a realtor if you don’t like the instant offer you receive).
Even though instant buying is not possible in the modern world, advanced search and data are. Instant loan approvals are necessary for the instant portion of buying and would have to meet the two criteria listed below.
Blockchain Wallets containing your loan profile that is always approved
Because automation takes the place of laborious manual loan approval, you have complete control over your loan shopping. You would submit the lowest-priced lender your always-approved profile. However, it will take 5 to 10 years before you start to have this much power. Lenders will use your income, asset, credit, and debt data that is “theirs” in the upcoming one to three years to offer this always-accepted idea to you.
Automated home Valuations
All lenders, investors, regulators, and companies that back government-sponsored mortgages like Fannie Mae and Freddie Mac accept automated home valuations (or appraisals) because they are based on real-time data. Real-time loan approvals for home purchases and improvements are made possible by this. Since the data are becoming more trustworthy and 3-D modeling is developing to the point where it can take the place of a physical appraisal inspection, we are within 1-3 years of this becoming widely accepted.
As a result, both the seamless linkage to contractors and the instant home improvement loan portions of the vision are nearing completion.
How Fintech is Upsetting the home buying. The Starting Point
Which will come first, instant home ownership or flying cars?
Many companies are currently working on developing flying cars. It therefore takes 40 days to close on a home purchase and even longer to hire a contractor and obtain a loan to repair your home, even as cars figuratively start flying onto the market.
Owning a home is undoubtedly more difficult than finding a ride from point A to point B. Banks/lenders, real estate companies, appraisers, title companies, insurers, regulators, Wall Street investors, builders, contractors, movers, tech companies, media companies, and more are all involved in homeownership.
Banks/lenders, real estate companies, tech companies, and media companies are the four groups working on the homeownership vision outlined above, and they are leading it.
As was mentioned above, these businesses will work together and compete as events unfold, but you will win in either case as they compete to provide you with the Instant Homeownership Experience.
Keep an eye out for the following installment, in which we delve deeper into each of the contributors to this vision.