Presented by Envestnet | Yodlee
A new wave of fintech is penetrating a wide range of financial processes, thanks to the accelerating adoption of digital solutions during the pandemic. Join this VB Live event to learn more about the tremendous opportunities available for entrepreneurs.
The pandemic kicked off a tremendous amount of uncertainty in the real estate industry, initially considered a non-essential business, engendering a lot of soul-searching for companies. While real estate technology platforms have been coming into their own for some time, the pandemic marked an urgent turning point. Agents had to figure out how to turn a business that’s typically very hands-on and personal — from home tours to document signing — into a much more resilient, efficient virtual business.
Luckily, fintech is also at a turning point, where the underlying, low-level APIs and services and product suites are available off the shelf to power innovative new platforms, or property technology. Also known as proptech, the term generally refers to the application of information technology and platform economics to real estate markets including how people research, rent, buy, sell, and manage a property.
The groundwork for these solutions has been laid over the past 10 to 15 years by the larger fintech ecosystem, bringing the APIs and tools developers need to build the next generation of consumer-focused tech to life. Global funding in proptech rose from $856 million to $1.76 billion from January to March this year.
“Real estate transactions are fraught with a ton of contingency and uncertainty. We’re looking to untangle that by owning the full end-to-end transaction,” says Joe Mocerino, vice president of engineering, at HomeLight. “The fact that you don’t have to build some of this tech, and you can just buy it off the shelf and plug it into your platform, it’s incredible.”
And the more that HomeLight is able to automate with technology in order to make stronger, quicker decisions, the more they have to offer customers, Mocerino says. They’re able to identify the agents in any given market and match them with consumers, enable mortgages, title and escrow, closing services, and other parts of the real estate transaction, and come up with innovative new ways to engage those products, he says.
There are downstream benefits, besides the ability to improve their services for consumers: leveraging respected technology also gives more confidence to the secondary banks that ultimately help fund these loans.
“When they see the use of this technology done in a very systematic way, there’s more trust when it comes to lending money to us to fund these loans,” he explains.
The data question
Algorithms and automation are essential, but require human control, or checks and balances, because data quality control should be a company’s fundamental consideration. Mocerino points to the company’s mortgage offering, and their loan origination system, which uses operator software to underwrite a borrower.
“Real estate data is historically incredibly messy, coming from MLS systems that are not necessarily the most tech-forward,” he explains. “We tap into these technologies to bring the data in, but we still have a human review it and verify it.”
The company buys overlapping data sets from multiple vendors whenever possible, and then tests and verifies, on both the financial and real estate sides. Their data team is careful not to take too much risk with the data, analyzing it before presenting it to a user or plugging it into a transaction.
The future of proptech
HomeLight’s vision for the future is a contingency-free transaction, making it as easy as connecting a buyer and the seller who are both qualified and making the sale, without multi-step contingencies, as well as growing its a trade-in and cash offer products, HomeLight Trade-In and HomeLight Cash Offer, which helps consumers compete in an increasingly buy market.
“I’m personally very excited about where underlying fintech products, like APIs and services, are going, and what that means for future products that aren’t built yet,” he says. “Entrepreneurs are seeing these tools that they haven’t had in the past, and I think there are all types of new categories of products that will let you be innovative on the technology side.
To learn more about how new segments of fintech are exploding onto the market, the opportunities for entrepreneurs and developers alike, and more, don’t miss this VB Live event!
Attendees will learn:
- How the fintech ecosystem is evolving — and how fintech in a box is changing the landscape for developers
- The most important APIs to avoid reinventing the wheel
- How to ensure your data is accurate, reliable and diversified — and why that’s important
- What the fastest growing new fintech segments are
- And more!
- Ran Harpaz, Chief Technology Officer, Hippo Insurance
- Joe Mocerino, Vice President of Engineering, HomeLight
- Seb Taveau, Head of Developer Experience | Center of Excellence | Envestnet
- Seth Colaner, Moderator, VentureBeat