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| March 16, 2000 |
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The introduction of MLS listings online in the mid-90s was the first revolutionary step for the real estate industry. Other services such as loans migrated to the Net, but not much has changed for the consumer other than that. The real estate transaction still remains a hands-on event, guided for the most part by Realtors. But true cost savings associated with the online transaction have yet to be realized by most consumers. What's been missing, according to Ian Morris, product manager for Microsoft's Homeadvisor, is that no one has been able to add real value to the transaction as it stands online. Plenty of companies are trying to replace the broker, and reduce the fees of both the broker and their agents, but they haven't cracked the code of how to deliver value to the transaction in which both agents and their consumers will benefit. In real estate, independent Realtors still have a lot of control; their listings are the inventory that the online world uses as the engine to drive eyeballs to loans and other services. That's why the listings sites attempt to treat them with the utmost respect, all while angling for a piece of the transaction, or a piece of the Realtor's profits. Well, that's about to change. HomeAdvisor believes that it is the first company to put it all together, a business model that serves the key principals in the real estate transaction - the consumers, the lender and the Realtor. The company vows that its new initiatives will shave weeks off of the mortgage closing process, and save consumers more than two thousand dollars over the life of a loan through lower rates and reduced closing costs. Where does the Realtor fit in? The loan services will be customized and made available through the company's new Realty Desktop office and transaction management platform. Realtors can initiate the loans for their customers and help them manage the loan process via virtual transaction management. The primary selling features? The customer wins with instant approvals and lock-in rates, as well as reduced fees. The Realtor wins by retaining control over the transaction. Here is how it will work. The software giant is splitting MSN HomeAdvisor off into a new company, HomeAdvisor Technologies, Inc. Although it will continue to be the majority shareholder, Microsoft is welcoming new equity partners to help drive the venture's success - Chase Manhattan Corp., GMAC-Residential Funding Corp., Bank of America, and Norwest Mortgage, among others to be announced. The new company will have three divisions: In case it's not clear how much of an impact this new venture will have on the lending/real estate industries, take a look at Homeadvisor Technology's first corporate acquisition - Tuttle Decision Systems. Its Electronic Services Platform will enable HomeAdvisor Technologies to link data capture, decisioning/underwriting engines and third-party service providers to mortgage pricing conduits in the secondary loan market. Tuttle's technology, according to company information, links more than 800 mortgage banks across the country to the nation's largest mortgage brokers. The company had a pivotal role in the financing of more than $26.5 billion in mortgages last year. Put the pieces together and you have HomeAdvisor announcing the first large-scale open standards transaction platform for real estate, and it is set to debut in April. HomeAdvisor feels it will trump any competitor with ease of use and cost savings for consumers. "No one yet has demonstrated a dramatic savings to consumers," says Morris."What is different about what we are doing is that if you are serious about a loan, you can put in your name, social security number and you will get real lenders bidding in real time." Morris maintains that the brokers and agents can automate the loan/transaction process and take control of it. "The lines begin to blur between the participants," he says. "The technology is an opportunity to get more involved. You are going to save money and provide customers with a better online experience. You are going to provide a better price, better service and capture loans." The code name for the platform, over a year in development, says it all - MortgageATM. Get a home loan as easily as you can use an ATM. What will they think of next? |
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When you think about it, there have only been a few industries which have made dramatic changes using the Internet, and their value lay in cutting costs to consumers - cheaper books, cheaper trades, cheaper airline tickets.