The future of real estate is increasingly going to involve Fintech. With so much money in real estate, new companies are looking for ways to speed up transactions, reduce fees, automate paperwork, and generally improve every step in the real estate business.
The real estate boom has put into focus how challenging it can be to get on the property ladder. While the market is one thing, new financial technologies are clearing a path by targeting inefficiencies, high fees, and unnecessary delays in the process.
Despite the challenges of getting into the property market, these are some of the ways Fintech is making homeownership more achievable.
1. Digital Marketplace Platforms
One of the first hurdles in the real estate process is finding a real estate agent. First-time buyers are often frustrated by the lack of transparency and answers when it comes to an agent.
Toronto-based startup Nobul is lifting the veil on real estate agents and bringing transparency to a new generation of homebuyers. The concept is simple. Nobul is a digital marketplace along the lines of Uber, where real estate agents compete for business, and consumers get to see information like verified reviews and fee comparisons.
Industry thought leader and CEO of Nobul Regan McGee told BNN Bloomberg how the company is meeting the demands of today’s home buyers. He explained “You have full transparency. This is what people are demanding these days, especially Millennials. They want information, they want transparency, they want it tech-enabled.”
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2. Faster Mortgage Approval
Getting a mortgage is no easy process. It can take weeks or even months to get approved, and the process has become a target for Fintech firms that are automating more of the process and trimming wait times. A rising number of digital-only mortgage lenders are offering mortgages in a matter of days and speeding up the process of closing deals by automating more of the process.
Other companies like Blend are making the approval process faster for more traditional banks as well. Blend is a white label software used by major institutions like Wells Fargo and U.S. banks. It allows prospective borrowers to link to online bank statements, tax returns, and pay stubs when they apply for a mortgage.
3. Digital Rent-to-Own Models
As home prices have surged in recent years, the dream of homeownership has only gotten further away for many. But a new take on the rent-to-own model may have the answer.
Divvy Homes buys homes for clients who cannot qualify for a mortgage on their own. Divvy acts as their landlord in a rent-to-own model. An upfront fee and portion of rent can be converted into payments, allowing tenants to build up equity even as they rent.
As building home equity is the biggest opportunity cost to renters, Divvy offers a solution that can help balance the playing field for renters.
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