Tech Companies Hope to Solve 3 Buyer Problems
Three new types of software can help buyers estimate repair costs and flood insurance costs before purchasing, and buy a home while still saving for a down payment.
WASHINGTON – A range of new real estate tech may help solve some common obstacles that may be standing in your clients’ way for closing. Panelists at a recent National Association of Realtors® (NAR) forum discussed some new technology solutions that could help buyers in multiple ways, including overcoming financial hurdles, getting easier access to flood insurance information, and gathering remodeling estimates to help make more informed buying decisions.
“Our goal on the committee is to increase our relevance to our clients and show you how technology can help with that,” said Rod Helm, 2020 vice chair of NAR’s Emerging Business and Technology Forum. The forum highlighted the three new technologies as potential solutions to help buyers move forward in transactions.
How much would it cost to remodel?
Artificial intelligence is being used to offer estimates for home repairs or remodeling projects. It allows buyers to budget for a possible renovation while still shopping for a home, which can lead to more informed purchase decisions, said Vin Vomero, founder and CEO of Foxy AI, operator of the tool Remodel It.
The average U.S. home is nearly 40 years old. “There is a high likelihood that a home your clients are looking at will need to be updated, or a seller may need to update a home before listing it on the market,” Vomero said. Cost, however, is the key in proceeding with any remodel and purchase.
Remodel It, still in beta testing mode, is a new program that could connect real estate clients to instant estimates of renovation costs before talking to a contractor. The program can analyze uploaded property photos and allow users to sort out what categories they wish to renovate – such as items in the kitchen or bathroom, or flooring – and pinpoint how fancy they want to get with those updates (semi-custom or custom quality, for example) to gather more accurate price estimates. The program also will allow users to connect with contractors on the platform when they’re ready to proceed with a project or gather more precise quotes.
The National Association of Realtors® (NAR) says Realtors can get exclusive access to the platform in beta testing mode.
Do I need flood insurance – How much will it cost?
In the U.S., 41 million homes have a medium to high risk of flooding and aren’t protected by flood insurance, said Jason Harris, CEO of CartoFront, a tool that offers access to flood insurance quotes. CartoFront is part of NAR’s 2020 technology accelerator program, REACH.
“What used to be considered a coastal problem is also now coming inland due to climate change,” said Harris. An increasing number of property owners and buyers may need to get flood insurance to protect their investment, and they may wish to do so even when not in designated federal flood zones to ensure they’re protected. Standard homeowner insurance policies don’t cover flood incidences.
CartoFront is teaming with MLSs to offer flood information and insurance quotes by displaying a raindrop icon next to online listings. Users can view side-by-side flood quotes from private and public insurers. Real estate professionals can use that information to help frame conversations about flood risk and flood insurance offerings.
“Our goal is to help protect the investment that homeowners have,” Harris said.
The new solution is free and debuts in Miami first. Further expansion plans with MLSs are scheduled this year. The program is being targeted to MLSs initially, with hopes of expanding into partnerships with real estate brands in the future.
How can I buy when I can’t even qualify for a mortgage?
The most common obstacles to homeownership? Not having enough for a down payment and a tarnished credit history. But a new company called Landis wants to team with real estate professionals to help their aspiring buyers make a home purchase, even when they’re unable to qualify for a mortgage.
“We want to help anyone who wants to buy a home but can’t get a mortgage, whether that’s because of a poor credit score, down payment, unique income situation, or a bankruptcy or foreclosure,” said Cyril Berdugo, co-founder of Landis.
How it works: The real estate professional can have their client register at crm.landis.com/register, and the company then conducts a review of their finances, housing history, and more. If the client meets Landis’ criteria (e.g., income of at least $30,000, 550-plus credit score, etc.), Landis will approve the buyer for a certain housing budget. For example, if the client is given a $200,000 budget, they can then shop for homes around that price with their agent.
When the client finds a home, Landis buys the house, and the agent represents Landis as the buyer’s agent. The agent will still collect a typical commission. Landis then rents the house to the client with the agreement that the client will purchase the house after one year at an agreed-upon price (the appraised value at time of purchase plus 3%).
The client must agree to receive financial coaching from Landis to improve their credit profile to get them ready for a mortgage. In the meantime, the buyer pays rent to Landis to live in the home, which includes a portion set aside for a down payment to purchase. Landis usually helps clients looking at single-family homes or fee-simple townhomes for prices of $110,000 to $400,000.
So far, Landis is working with 5,000 agents from multiple brokerages, big and small, across 12 states. Landis plans to expand to 23 states next year.
Source: The National Association of Realtors® (NAR)
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