In the past few months the concept of an integrated, digital real estate closing has come more clearly into view. Companies that had previously invested in digitization are now watching the rest of the market catch up.
At Inman Connect Now, panelists on a session titled “Welcome to The Integrated Closing” discussed the acceleration of digital adoption. Qualia CEO Nate Baker joined Spruce CEO Patrick Burns and Paul Hurst of First American to offer insight on what lies ahead.
Digitization: what’s changed since the start of 2020?
At the last Inman event held in January 2020, leaders in the title and mortgage lending space discussed the steady march toward digital transactions. Just a few months later at Inman Connect Now, leaders discussed a rapid acceleration of this same trend.
“Back in January all three of us were focused on making investments and driving the real estate transaction online,” Hurst noted. “At First American we’ve invested in four main areas: the digitization of the settlement process, instant data driven title decisions, seamless mortgage machinery and extraction of title plant data… that’s still our focus but even more so now.”
Baker agreed, and noted that the urgency around digital innovation is more present than ever before. “Everyone is very focused on how to enable remote real estate transactions and close online simply and easily,” he said. “Consumer demand is actually driving this change where it wasn’t before.”
Burns added that before the pandemic, new real estate products and financing models (such as iBuying) were providing consumers with an abundance of choice. “What shouldn’t be lost is that we were seeing an expansion in the industry of these new products. That’s something exciting that will hopefully continue this year,” he said.
Growth of digital: the data proves it’s not just an assumption
Hurst pointed to a few areas where his team at First American has seen rapid growth in digital adoption.
- Digital documents for mortgage lenders. First American has seen a 150% increase in transaction volume with digital documents since the beginning of 2020.
- Digital-first title & escrow model. First American’s new mobile-first title & escrow company, Endpoint, has witnessed its best two months on record despite low purchase volume.
“These numbers are a vote of confidence for digital real estate transactions,” Hurst said.
Is the shift toward digital real estate closings permanent?
“I think this is going to stick,” Baker said of the shift toward digital signing experiences. “The reasons people wanted to sign in-person don’t carry as much weight anymore. People are more used to digital touchpoints and the industry now knows how to handle these types of transactions.”
Burns added that as more remote signing options become accepted by state governments, it’s important for the industry to move toward solutions that “make sense.” The number of signing options ranging from RIN to RON to IPEN to TWIN and PRON can create confusion. It’s up to the industry to streamline these options and guide consumers toward solutions that truly improve the process.
The long term impact of digital transformation
The panelists agreed that the housing market will likely be a driver of economic stability and growth in the years to come; especially as a digital generation comes into homebuying. “There’s now a remarkable demographic shift of 80 million people coming into homeownership,” Burns noted. “This time the housing market will lead us out of this recession instead of being the cause for it.”
To hear more from leaders at First American, Spruce, and Qualia, click here to stream a recording of the Inman Connect Now session “Welcome to the Integrated Closing.”