The concept of buying a home online is not new. Nor is the technology to make it possible. What is new is an invigorated interest in digital homebuying options and the closing experience. The pandemic placed a spotlight on the real estate industry. It made consumers acutely aware of the lack of digital closing options available—options that were a necessity for their health and safety.
Companies like Blend, a digital lending platform, and Homie, a vertically-integrated real estate brokerage, are in the business of delivering optionality for consumers to transact on a home how and where they want. These types of businesses are rapidly gaining traction.
Just last week, Blend announced that it received $75 million in funding—placing the company’s valuation at $1.7 billion. That same day, Blend CEO, Nima Ghamsari, joined Qualia CEO, Nate Baker, and Homie CFO, Mike Peregrina, at the Future of Real Estate Series (FORES) summer session. The panel discussed their different approaches to delivering digital solutions and how title operations fold into the broader home purchase experience of the future.
Technology to make homebuying simple
Both Blend and Homie aim to provide consumers with digital options to make homebuying a convenient, streamlined experience. Homie takes a direct-to-consumer approach by offering homebuyers a simple, single-brand home purchase experience. This means that Homie owns the front end of the transaction and continues the relationship through closing (and even beyond into home insurance).
Meanwhile, Blend offers a white-labeled digital lender product to help mortgage lenders deliver a better home purchase experience. Blend believes the foundational pieces of the mortgage industry still need to be improved to make the end-consumer experience better. This includes how data is aggregated and reviewed or how documents are verified in compliance with regulations. “All those pieces were something that was not digital 5 or 10 years ago,” Ghamsari said.
He added that when back-office operations are not streamlined, the person who ultimately loses is the consumer through higher pass-through costs and delayed processing. “Building the foundational technology is something that’s necessary for the end goal of customer experience,” he said.
Are fully-digital transactions the answer?
Right now, there is a spotlight on remote online notarization (RON) to improve the homebuying experience. Before the panel session, Baker announced Qualia’s latest product innovation, Qualia RON. He asked Ghamsari whether he believed RON would take over the market any time soon.
Ghamsari said that Blend’s goal is to find a way to distribute RON capabilities widely. Not necessarily because it’s the best and only way to transact, but because it provides consumers with optionality. “Where it’s allowed, we want consumers to have that option… If we can provide the consumer with options that’s a huge win for everyone.”
A differentiated closing experience
While RON is currently in the spotlight, Ghamsari and Peregrina agreed that the title industry will transform in other ways in order to meet consumer demand. Peregrina believes this transformation will come from direct consumer interactions and deeper relationships. Ghamsari believes that consumer trust will form from fundamentally better transaction experiences which begin with better software systems.
“The title company has a lot to offer the homebuyer [by way of] educating them on the value of title insurance and building trust,” Peregrina said. He envisions title professionals “leapfrogging” real estate agents to communicate and market directly to consumers.
Ghamsari agreed that title is a principal component of the homebuying experience and one that leaves a lasting impression on consumers. “Title is one of the key four or five pillars of getting a mortgage closed and a person into their home,” he said. “When everything is done over email and documents, the consumer loses…. There’s a huge amount of opportunity to get [lenders, title companies, and the consumer] onto one platform.”
The foundational software that companies like Blend and Qualia are building to bring transaction stakeholders onto one system will ultimately benefit both vertically-integrated businesses (like Homie) and specialized service providers alike.
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