Will ‘proptech’ change home buying trends in 2022? – San Bernardino Sun

By Jeff Ostrowski | Bankrate.com

In the Amazon era, consumers are more indulgent – and less patient – than ever before. Tap your phone and, wait – hot food from your favorite restaurant will arrive in minutes. High-end electronics will be on your doorstep in a few hours.

However, the mortgage industry has yet to deliver such a level of instant gratification. According to ICE Mortgage Technology, the typical time from application to completion of a mortgage is 50 days, an icy pace compared with the rapidity of most other things in modern life.

“The mortgage space is decades behind everyone else,” said Chris Boyle, longtime chief executive officer of mortgage giant Freddie Mac and now president of home loans at Roostify. .

Boyle’s company is one of many whose goal is to speed up the mortgage process so that closing times can one day be measured in days, not weeks. Roostify is part of a new generation of real estate technology, or “proptech,” companies that aim to attract home loans and real estate sales into the digital age.

Here are the trends to watch in 2022.

1. Mortgage: Get Started Faster

Digital players want to close your mortgage more quickly – although even optimists say the process will continue to be shareless over daily and weekly intervals, rather than seconds and minutes are used as benchmarks in other corners of the economy.

One obvious stumbling block, says Beeline co-founder Jess Kennedy: Mortgage giants Fannie Mae and Freddie Mac, who set the rules for most mortgages, have integrated the maximum. seven days minimum for many of their processes.

While proptech companies admit that they won’t be able to transfer money within hours of you applying for a mortgage, they are focused on a different goal – giving consumers immediate consent or not. ie.

Beeline, a business lender in two dozen states, promises to let borrowers know exactly where they are in the process at any time. “We liken it to Domino’s Pizza Tracker,” says Kennedy.

Roostify, which works to speed up the mortgage process on behalf of lenders, takes a similar approach. “You want to give consumers certainty,” says Boyle.

Roostify focuses on saving time by automating the paper-intensive parts of the process, like verifying tax returns and payment stubs. Boyle says that having a real human look at every document adds days and weeks to the timetable.

But automation has only been for lenders so far. The complexity of mortgage applications poses a challenge for lenders hoping to fully automate their approvals.

Every application is unique, and loan applications from self-employed borrowers and real estate investors can be difficult for veteran loan officers. In other words, programming a robot to get a $300,000 loan through approval is not easy.

“Every app is a snowflake,” says Kennedy. “It’s really difficult to create a system that can take into account every beautiful snowflake.”

2. Home Appraisal: Virtual Analysis

The U.S. housing market is booming, albeit with a catch: There aren’t enough appraisers to visit and assess all of the homes that are changing hands and being refinanced.

Hoping to find at least one solution to that problem, Fannie Mae and Freddie Mac directors will begin accepting more “desktop appraisals” in early 2022. The state announced in October that remote valuation would replace some traditional methods of appraisal, which require an appraiser to visit properties as collateral for collateral.

Paul Ryll, founder of Oscar Mike Mobile Appraisals in Greenville, South Carolina, welcomes the change. By not visiting a property in person, appraisers can produce more valuation reports, he said.

“There’s no reason an appraiser can’t do it in 72 hours. It will significantly reduce turn times,” says Ryll. “As appraisers, we need to embrace change.”

Even if they don’t tour the home in person, appraisers will still rely on a variety of data sources, including property photos posted in the multi-listing service.

3. Cash incentives: A bunch of new companies want to be your ‘rich uncle’

During the coronavirus housing boom, bidding wars are common. When sellers consider multiple offers, they tend to favor the certainty of a cash offer over a slightly less definite bid that is financially dependent.

As a result, cash buyers can often get a slight discount compared to finance-based buyers. And those who buy cash can get a tougher bargain in the test case.

That has led to some companies making cash offers on behalf of buyers who don’t actually have $300,000 or $400,000 in the bank. Companies such as Homeward, Ribbon, Unlock and Better.com finance their transactions with cash on behalf of borrowers.

One of the new groups of “power buyers” has some appeal for the offering. “Think of us as a rich uncle,” said Adam Pollack, co-founder and chief executive officer of Accept.inc. “We want to turn every buyer into a cash buyer and every offer into a cash offer.”

These companies have already raised millions of people in 2021 and will continue to grow in 2022.

4. iBuyers: After a period of regress, still going strong

In 2020, when the pandemic first threatened the US economy, iBuyers, or instant buyers, slowed their growth. Then, with the housing market booming, they became active buyers in the Sun Belt markets. In 2021, Opendoor, Offerpad, and Zillow Offers pay sellers premiums for their homes.

Skeptics wonder if Zillow’s generous offers and modest fees make business sense. In early November, Zillow admitted it was overpaying for properties, even in a market characterized by skyrocketing home values. Zillow made headlines by shutting down its Zillow Deals unit.

Zillow, the creator of Zestimate’s lauded family values, seems to have learned the hard way that technology isn’t always the answer to a traditional business like flipping houses.

“They just do it in the head, can’t scale, don’t understand the complexity,” said Ken Johnson, a housing economist at Florida Atlantic University.

However, other iBuyers are still in business. Stefan Peterson, co-founder of Zavvie, a real estate technology company that works with brokerages to help sellers compare offers from iBuyers, said remaining iBuyers buyers will return to the generosity .

“It was an open secret that iBuyers made very strong offers,” says Peterson. “They seem to be coming back to earth, but they’re still very close to 100% (market value).”

5. Blockchain: No housing yet, but maybe someday

Perhaps the hottest area of ​​technology is blockchain, the innovation that underpins bitcoin and other cryptocurrencies. Right now, the real estate industry is focusing on more mundane tasks, like delaying a mortgage by a few days.