The real estate technology industry has experienced two strong “waves” of innovation over the past decade. Each wave encompassed approximately 5 years of development, and we are currently in the middle of an exciting third wave of progress.
Wave 1 brought what we like to call “power to the buyer.” Wave 2 built upon that innovation with the digital transformation of real estate services. And now we find ourselves in the middle of an exciting new epoch, one that we at Divvy like to call “Real Estate 3.0”.
Real Estate 3.0 is a groundbreaking period of real estate history, one that is defined by a powerful core concept: disrupting the transaction. And if you’re a prospective homebuyer looking to enter the market for the first time, there is no better time for you than right now.
But before we learn how to harness all of the opportunity Real Estate 3.0 has created for prospective homebuyers, let’s take a moment and look back through the history of the last decade of real estate and all the incredible innovations Wave 1 and Wave 2 brought to the table.
Wave 1 – Power to the Buyer
The catalyst of Wave 1 was the introduction of real estate sites like Zillow, Redfin, and Trulia in approximately 2005. These sites “unlocked” homes for the average buyers by allowing anyone at any time to search and explore the entirety of the housing market.
Before this development, a prospective homebuyer would need to rely on their uncle “in the business,” or a friendly, local realtor to allow them access to listings and information. But due to the “democratization” of Wave 1, home buyers found themselves equipped with a great deal more power than even the realtors themselves.
Now the buyers were the expert, and they were no longer dependent on the gatekeepers, setting the stage for even more waves of innovation.
Wave 2 – Digital Transformation of Service Providers
While Wave 1 led to the digitizing and democratization of the real estate landscape, Wave 2 went one step further, digitizing the many tools that service providers used to assist new buyers. This led to incredible innovation for mortgage brokers, loan officers, and real estate agents.
For real estate agents, sites and tools like RealScout, Zillow Premier Agent and Boomtown led to considerable changes in their industry. And on the mortgage side of the equation, websites such as Sindeo, Clara, Lending Home, Sofi and Blend all fundamentally streamlined the mortgage process through their online platforms. The result of this evolution was stronger decision making, faster response times, and increased coordination and customer service across the board for real estate services, leading to an overall stronger experience for the real estate buyer.
Wave 3- Disrupting the Transaction
All this innovation finally led to where we are today – Wave 3 or Real Estate 3.0.
When tech companies first entered the real estate space, the result was an optimization of the industry’s many processes. Now tech companies have pushed the innovation one step further. They are no longer just optimizing; they are disrupting the industry entirely.
Companies like Opendoor have made buying and selling a completely digital process, increasing the speed of purchasing real estate from months to days.
Sites such as Point, Unison, and Landed have created online spaces where “digital parents” can help invest in a home alongside you.
And finally, there’s us – Divvy; digital landlords who help you transition at your pace from renting to owning.
The real estate landscape has seismically shifted, resulting in a new and exciting ecosystem that benefits prospective buyers. The result of all this innovation will be a dramatic improvement in customer experience as these companies apply the immense data they have collected after months of working with the market. This data application will help us understand the market even clearer, helping you as a homebuyer negotiate, obtain a mortgage, deal with title issues and escrow and efficiently remove many of headaches that previously plagued the home buying experience.
Someday we’ll look back at the history of real estate innovation and wonder how we could have been so archaic to not start here in the first place. But that in itself is the definition of innovation. It may all simple in hindsight, but the truth is; it’s been a long road to get here, and there’s still plenty left to innovate.
Because who knows, Wave 4 may be just around the corner…