Homeownership with Full Stack Real Estate Companies

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🏘️Homeownership with Full Stack Real Estate Companies💸

High-Quality Home-Owning with Real Estate Tech

Buying and owning a home seems to be the majority of people’s biggest goal in life, and yet the process of achieving this is a painful and often highly complicated one. Intermediaries we often have to come across, like real estate agents, brokers, banks, and notaries, create convoluted and generally expensive steps both home buyers and sellers have to take.

What if this could change? What if property-related transactions could be done with less friction and more transparency? According to a16z’s general partner, Alex Rampell, this is what plenty of tech real estate companies some of us may have come to know (and maybe love) can and are trying to achieve.

Houses and Cars

Let’s imagine you’re riding a taxi during a time before ride-sharing apps like Lyft or Uber existed. The traditional taxi might have been dirty, and without GPS, every shortcut the driver tries to take ends up being a long one, and you get lost multiple times. Eventually, you get to where you were trying to go, but the ride was a terrible experience, and it took you a while to want to ride a taxi again.

With Lyft, Uber, or any other modern, tech-focused ride-sharing app, you can get to where you’re going safely with the help of GPS, you are more likely to have a better experience due to their rating system and higher quality management. What these ridesharing apps have done to the taxi industry is what tech companies have and can do further for the real estate industry.

Buying a house the traditional way through banks, brokers, and real estate agents goes like this: You find a house you’re interested in, and you want to buy it, but you can only afford to pay for half of it at the moment. You go to apply for a mortgage that might, give or take, take anywhere from 30 to 60 days, sometimes even longer. What happens if this house’s a popular one, and its owner already has 10 other offers from others who can afford it right away? You might lose it.

Real Estate Fees

The fact that it takes such a long time to buy a house is one of the reasons why it, just like riding a traditional taxi, can be a terrible experience. What if you were to move from one state to another, and to buy the new house you want, you have to sell your former home?

Your home is probably one of your most valuable assets, and you wouldn’t want to sell it at a lower price than you have to. You’d be lucky if your area has a fair market, so your house can be sold just like that.

Odds are, though, your house might take a while to sell and will be on the market for months. When selling it with the assistance of real estate agents, you’d most probably have to stage your house and put ads in the newspaper, on Facebook, or on Craigslist. You’re also required to spend money on transaction fees and commissions, costing you more money than you’d expect.

Are there ways to avoid these painstaking processes?

Real Estate Full Stack Tech

When you communicate with real estate agents and pose questions like how much you should list your house or when’s the best time to list your house, they might be able to give you an estimate, but it might also not be as accurate as asking tech resources whose answers are based on data sciences.

Playing a role similar to Lyft and Uber in the transportation industry, there have been a growing amount of full-stack tech companies that are trying to make the process of real estate transactions simpler and kinder for buyers and sellers alike.

Seattle-based company Flyhomes, for example, acts as a real estate brokerage that buys a house for you. Theoretically, real estate agents could do this, but what are the chances that they would have all the funds ready to assist you? Flyhomes can provide you with the funds needed to buy a house and wait until you have a mortgage ready to give back to it.

San Francisco-based Opendoor can assist you during your real estate ventures as well by preventing your house from staying on the market for a long time. What Opendoor does is buy houses and sell them to people who can only purchase them at a later time by listing them on its website and the Multiple Listing Service (MLS).

Aside from real estate assistance, plenty of companies seem to view increasing homeownership as something that may be good. However, when done with a NINJA loan*, what good does it really do?

*NINJA Loan: slang term for a loan provided for borrowers with “no income, no job, and no assets.”

Improving Homeownership

Improving one’s ability to purchase, own, and maintain homes have become a cause some tech companies aspire to do.

Divvy, a Utah-based full-stack company, provides information on houses on sale that are available for rent. Instead of pushing yourself to purchase houses you can’t afford, Divvy buys the house and rents it to you for a specific amount of time. This is what real estate agents would often call a sale-leaseback.

What makes Divvy’s system an innovative one is that, instead of burning all your rental payments whilst Divvy technically owns the house, part of your rent goes into a small equity position in the home. Once your rent ends, you have the option to buy the house. By renting a house that you might someday end up permanently living in, you’d want to take care of and live in it better, making living and “owning” a home an overall better experience.

Lastly, some companies are helping homeowners improve their quality of home life by selling a part of their house. If you wanted to keep your house but couldn’t maintain it or mostly neglect parts of it, Palo Alto-based Point lets you sell a part of your house. This way, you’d be able to save and make use of your funds to better your home.

Homeowning is a big aspect of a person’s life which can entail sizeable transactions and immense repercussions. By utilizing technology in the real estate industry, we are able not to replace real estate agents but instead incorporate their abilities with data sciences, allowing more careful, convenient, and effective real estate transactions.

More Source(s):

• a16z

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