From building to selling and buying, technology’s impact on housing market widespread
Technology is revolutionizing the real estate industry by making it easier for consumers to buy and sell homes, take virtual tours of properties, compare prices or obtain a home loan.
Consumers – including younger homebuyers – have come to expect the added convenience of shopping for homes online. More than 44% of buyers searched online for homes last year, while 17% reached out to a real estate agent, according to data from the National Association of Realtors.
While technology provides obvious benefits for homebuyers and sellers, it’s also changing the homebuilding market.
Todd Sullivan launched Spokane custom homebuilding company Sullivan Homes in 1993. Now, he is taking homebuilding a step further with his startup, Newhomes.house, which allows real estate agents to sell new homes with a 3% referral fee built into the price.
Sullivan said the startup solves “the chaos and confusion of designing and building new homes by matching homebuyers with land, certified builders, construction lenders, modifiable house plans and an Amazonlike storefront for interior and exterior product selections.”
Sullivan said in the past, very few real estate agents were able to get involved with new construction and typically had to wait until a home is built before receiving commission. With Newhomes.house, agents are able to offer the option of constructing a new home to clients and receive commission before the home is built.
“It’s going to absolutely change how homes are sold, and new construction allows Realtors to essentially create their own inventory,” he said. “This is the first platform that tries to streamline it and make it simple as buying a new car.”
Sullivan, who worked with StartUp Spokane and University of Washington’s CoMotion Labs to refine the online platform, launched a beta version last month that locks into the Spokane Multiple Listing Service.
Sullivan, along with Steve Strom, vice president of product development, and Wendy Anderson, director of lending, will be pitching the startup to investors later this month in an effort to obtain financing for a second version of the online platform.
Sullivan said he’s receiving inquiries from throughout the region from potential customers and is meeting with brokerages, including one in Seattle that expressed interest in joining the online platform.
“Even though we are going out for our first round of funding, we’re already doing transactions,” Sullivan said. “The first house will close in about 10 days.”
To sell homes on the platform, Realtors and their clients sign a referral agreement and join the MLS property search. Once the client prequalifies for a construction loan, they select a house plan and property within their budget as well as a certified builder who can also assist in estimating any additional costs, such as utility installation or home modifications.
Real estate agents and clients can then write an offer for the property and close on the sale in about five weeks.
Sullivan said homebuyers are able to obtain a loan with a 10% down payment and veterans are eligible for zero down through a partnership with lender Wallick and Volk.
Each home project comes with its own permanent website containing contracts, blueprints, the title, closing documents and a listing of every product installed in the house.
Sullivan expects the online platform to be operational in Seattle by June, followed by expansion into the Tri-Cities and Portland. By the second year of operation, he aims for the online platform to roll out nationally.
Sullivan said real estate agents have been receptive to the platform so far.
Using tech to buy
With low inventory in Spokane and a lot of buyer activity, houses are moving very quickly on the market, so it’s critical for buyers to tap into technology in their home search, said Paul Reid, market manager for Redfin.
Seattle-based brokerage Redfin expanded into Spokane last year, offering clients features such as instant notifications of new homes on the market, scheduling home tours with agents online, 3D walk-throughs of homes, home value estimates and software recommending unexpected listings.
“Folks have been using our website and app to stay up to date on what’s happening in the market,” Reid said. “Our most used features are instant notifications, because it’s so important to see the homes right when they come on the market. People have been leveraging that quite a bit because speed is critical in a market like Spokane.”
Reid said agents often conduct video tours with clients through FaceTime and many listings include virtual tours.
“Oftentimes, clients will use (virtual property tours) to really get a feel for the house before they come to see it or in some cases, buy it before they have walked through,” he said. “It’s a wild thought, but it happens.”
Scott and Kelsey Pfursich recently closed on a home in the Eagle Ridge neighborhood without stepping foot on the property, thanks to technological advancements in the homebuying process.
Scott Pfursich, who grew up in Spokane and moved to Oregon after college, said the couple’s home search was somewhat challenging.
“I thought it was going to be easy because my memory of Spokane is of a lesser-known, slower town, but we realized it’s quite popular now to move back there, or move from bigger cities like Portland,” he said.
The Pfursichs conducted a few house-hunting trips last year in Spokane, but when a contract on a home fell through, they were left scrambling to find another home to purchase.
Kelsey Pfursich joined a Facebook group for mothers in the Eagle Ridge neighborhood and inquired about homes for sale. A member replied that their house would be going on the market.
“All we had seen were the old pictures on Zillow. When it came on the market, our Realtor did a video for us of it,” she said. “We felt like that was good enough, so we put in an offer.”
Scott Pfursich said they did a preinspection to strengthen their offer on the home. The inspector sent the couple a detailed report and plenty of pictures, he said.
The Pfursichs set a budget of $500,000 and did a “ton of research” on the neighborhood, which included an online price history of comparable homes.
Kelsey Pfursich said their new home was priced fairly, and they knew that because of sale prices on similar homes in the area.
The couple was closing on their future home.
“We hope we like it when we walk in,” Scott Pfursich said.
Virtual home tours
Matterport, a California-based computer vision technology company, has released a camera capable of providing 360-degree virtual property walkthroughs. Homebuyers and sellers also can view the property in what’s described as a “dollhouse view” through the company’s technology.
Jack Pemberton of Venture Publishing Inc. in Spokane launched his real estate photography business in 2004, using what he describes a “rudimentary digital camera gear.” A real estate agent introduced him to the Matterport camera in 2015, which he purchased for more than $4,500.
Pemberton’s company combines aerial videos from drones with Matterport’s virtual capabilities to offer virtual tours of a home for real estate agents, homebuyers and sellers.
About 30% of Pemberton’s business consists of clients requesting Matterport technology and it seems as though more real estate agents are embracing it when compared to a few years ago, he said.
Virtual property tours allow buyers to make a connection with the home, he added.
Typically, it takes one to two hours to photograph a 2,500-square-foot house using the Matterport camera, which is done in a “fashion to flow through the house,” Pemberton said.
Pemberton said younger buyers in the market are wanting to see virtual property tours and as a result, Matterport technology will only gain traction.
With Matterport, potential homebuyers can use virtual reality goggles to experience a 360-degree view of a property. But right now, not all real estate agents are embracing the technology, so only 15% to 20% of listed homes have virtual tours, Pemberton said.
However, in about 10 to 15 years, virtual home tours using Matterport technology could become the standard, Pemberton said.
“If 100% of inventory was filmed with Matterport, you could literally go to real estate office and look at 10 homes in an hour,” he said. “That’s huge.”