By the end of 2019, homeowners in eight U.S. markets will have the choice of selling their homes directly to Zillow and closing in as little as seven days. This is part of a growing trend, known as “iBuying,” which is appealing to consumers for numerous reasons—no open houses, no headaches associated with weighing multiple bids, and no delays or other issues related to financing.
Zillow and the other companies in the space use a proprietary valuation model to appraise the home, sight unseen, and make an offer within days. The catch lies in the commission—while traditional real estate agents typically charge five percent, Zillow’s fee ranges from six percent to nine percent. While a potentially disruptive business model, some believe this increased expense will hinder adoption. An opinion piece in Forbes on iBuyers stated, “The convenience of iBuyers is definitely intriguing. However, it seems like the overall cost of this convenience will need to come down before it becomes consumer-friendly and more mainstream.”
Blockchain technology is another fascinating application of technology in the real estate sector. Computerworld’s Lucas Mearian recently examined a real estate application offered by ShelterZoom that is set to launch in early 2019. The app will enable buyers and sellers to transact deals over a blockchain-based network. Already used by over 90 brokerages, the technology engenders transparency by allowing all parties to see the offer and acceptance process in real time. Mearian interviewed a few early adopters, all of whom expressed enthusiasm for the application and their belief that blockchain is only just beginning to improve the real estate industry.
These and other technology innovations all beg the question: How can they be tapped for data monetization efforts and enable firms to operate more competitively and uncover new opportunities?
As more of these applications are unveiled, hopefully we’ll begin to see more services hit the market with that aim in mind.