Which technologies are having the greatest impact on the home buying process?
Secure collaboration and communication portals; e-closing platforms and remote online notarization tools; and chat bots are the three main innovations that have improved the home buying process for consumers, a recent survey of title insurance agents and real estate professionals shows.
The bi-annual Real Estate Sentiment Index (RESI), conducted by First American Financial Corp., shows that 2019 will bring further adoption of these solutions.
“Throughout 2018, we’ve seen many trends that set the groundwork for the acceleration of fintech adoption,” says Mark Fleming, chief economist at First American, in the report. “It has been a strong seller’s market across the top U.S. metropolitan areas. With inventory low and house prices at historic highs, prospective homebuyers felt pressured to settle deals quickly before opportunities fade away. Additionally, the largest group of prospective homebuyers, millennials, expect greater efficiency and convenience in their home-buying experience.”
As per the survey, about 45% of title agents and real estate professionals feel secure collaboration and communication portals are the most important innovation – mainly because they allow for the secure exchange of documents and information between buyers and other parties in the home buying process.
“Survey respondents indicated that buyers would greatly benefit from a secure platform that allows them to correspond with lenders, real estate agents, escrow officers, and other parties involved with the real estate transaction,” Fleming says. “The emphasis on security does not come as a surprise, given that one of the major trends affecting the real estate industry, real estate professionals and consumers is the rise in wire fraud.”
E-closing and remote online notarization tools are also now essential technologies for improving the home buying process.
“E-closing and remote online notarization capabilities are also poised to make their mark in the industry,“ Fleming says. “Thirty-four percent of title agents and real estate professionals surveyed believe that remote online notarization and e-closings will have a large impact in helping home buyers close their transactions faster and more efficiently.
“Remote online notarization allows a notary to notarize documents remotely over the internet via tamper-evident digital tools, sophisticated fraud prevention technologies and live audio-video conferencing,” Fleming explains. “This technology has already been accepted as an alternative to traditional in-person notarization in several states, and we anticipate seeing further uptick in 2019.
“Similarly, e-closing, the electronic execution of mortgage loan closing documents in a secure digital environment, is a faster and more efficient alternative to the traditional paper-based real estate closing,” Fleming says. “E-closing can also reduce the risk of manual errors in the closing process, improving loan quality alongside efficiency.”
About 18% of title agents and real estate professionals indicated that tools that help with process efficiency and automation, such as customer service chat bots, would help deliver a more efficient home-buying experience.
“With more and more prospective home buyers searching for homes and information online, chat bots can help real estate agents engage potential customers in real time as they are browsing online listings, at any time of day,” Fleming says. “This technology has great potential to serve the real estate industry.”
Not every company has these technologies deployed yet – however, the survey shows that many of them anticipate investing in these technologies soon. About 35% say they anticipate needing software support for remote online notarization, and secure collaboration and communication portals, in the next seven to 12 months.
About 30% say they will require software support as soon as three to six months.
“Collectively, 65 percent of respondents intend to adopt these technologies in the next 12 months,” Fleming says.
“Streamlining time-consuming processes, as well as delivering an improved consumer experience, is top of mind for real estate professionals,” he adds. “Fintech is here to stay.”