We are still living in an unprecedented time in history: a pandemic, the highest inflation rate in four decades, and a housing boom that is not letting up. While these global challenges continue to impact people’s daily lives, the coming year will begin to shift how consumers experience the homeownership journey.

There is no doubt that the past two years have been a sellers’ market, but 2022 should begin to give control back to the homebuyer. I predict this shift happening in three ways:

1. 1. 1. Homebuyers will have a competitive advantage with an alternative type of all-cash offer;

      1. 2. There will be a renewed focus by federal agencies and availability of new technology that will help reduce bias during the home buying process allowing equal access to any home by anyone;

      2. 3. Seamless technology will provide a more convenient home closing experience that saves time and money, reducing the gap between today’s reality and the expectations of the next-generation homebuyer.

All Cash or Bust

One result of the ongoing competitive housing market is that inventory will still be low, but this should make way for a new competitive edge for homebuyers: the all-cash offer and the iLender. 

What is an iLender and how is it different than an iBuyer? iLender is the new “i”—for “instant” —in real estate. While an iBuyer (like Opendoor) uses technology to determine and make an instant, all-cash offer to the seller; an iLender (like UpEquity) gives the advantage to the buyer. Here’s how it generally works: iLenders approve a loan amount, allowing the homebuyer to make the equivalent of an all-cash offer. The iLender then purchases the property outright for the homebuyer (usually within a few days) while the mortgage is finalized, and ownership is later transferred. 

The alternative to a traditional all-cash offer through an iLender is already making an impact on the housing industry. By mid-2021, approximately 30 percent of offers were all-cash and all signs point to a continued uptick in all-cash offers in 2022. What was once only an option for high-earning homebuyers, iLenders give a competitive edge to the average consumer in an ongoing, high-demand housing market.

Equitable Housing for All

Despite the leg-up an all-cash offer can give, those in underrepresented communities often have an even steeper hill to climb. Mortgage denial rates between black and white applicants grew by 10 percentage points in 2021 and the cost to buy a single-family home will likely increase up to 12 percent at least through Q1 of this year. 

However, because of this increased uncertainty and stories of discrimination coming to light, the Federal Housing Finance Agency (FHFA) is making equal and fair housing a priority initiative in 2022. Government Sponsored Enterprises (GSEs) like Freddie Mac and Fannie Mae are realizing now more than ever that they have a powerful role in driving large-scale change in housing fairness outcomes. More recently, Fannie Mae is looking to use available rent data to fast-track loans for homebuyers with little to low credit (a typical measure for a loan approval).

Additionally, technology is beginning to help alleviate bias and drive more equitable outcomes for all homeowners such as helping offset the bias of an appraiser by analyzing available data. New technology companies, GSEs and other private enterprises are enabling this much-needed change to happen sooner rather than later, giving renewed hope for all consumers that they will be able to buy or sell a house based solely on the fair market value of that house.

Buying a House? A Car? Same Seamless, Tech-Enabled Process 

The housing industry is no exception when it comes to innovation. The process of buying a car can be completed through an app, and now machine learning and other digital technologies are allowing the homebuying process to have a similar, tech-enabled experience.

For example, opportunities for digital closings on purchasing or refinancing a house have been on the rise for several years – an increase of 228% since 2019 – but have hit a tipping point for 2022. And this is only the start. 

Accelerated adoption of remote online notarizations (RONs) are more realistic in 2022, too. A physical notary, who verifies your identity and witnesses your signature on stacks of paper, has been a requirement for most if not all states for what feels like forever. Then, in 2020, along came a global pandemic and many states, following emergency measures, quickly picked up adoption of RON, or remote online notaries, and those measures are beginning to have lasting power. 

The digitization of the industry is being influenced by the largest share of homebuyers in the market right now: millennials. Instant and digital are now table stakes: 99 percent of millennials start searching for their dream home digitally. Some millennial homebuyers don’t even set foot inside their home first before purchasing their house – all because of more seamless, user-friendly technology. 

How Do I Get Started?

Many real estate trends from 2021 will be here to stay–and while it will still be a tough buyers’ market, with additional tools, technology and industry support, 2022 can absolutely be the year to buy a home.  

Here are a few tips to get ahead of the trends and the competition: 

1. 1. Don’t necessarily settle for the typical loan: Include iLenders in your loan search as they can give you the equivalent of an all-cash offer to help stay competitive and win the bid on your dream home.

   1. 2. Choose your own journey: Connect with people outside of your usual social circle or community. A trustworthy real estate agent with a unique perspective or an unknown but reputable appraiser can result in a fair, low cost, and stress-free homebuying experience.  

   2. 3. Leverage technology: Ask your real estate agent and lender about where technology can play a role in your home buying process. From virtual open houses to RON signings to digital solutions offered by title and escrow partners, chances are you can find a quicker, easier, and more affordable path to closing on your home.

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      About Max Simkoff, founder and CEO, Doma

      Max started Doma in 2016 after personally experiencing the friction and labor caused by title insurance in the homebuying process. Since then he has worked to provide an innovative solution to homeowners, brokers, and mortgage bankers. Max is an entrepreneur with experience founding and operating technology companies. Prior to Doma, Max was founder and CEO of Evolv, Inc., an enterprise predictive analytics software company, which he led through their acquisition by Cornerstone in 2014 where he served for two years on the senior executive team post-acquisition as the Vice President of Strategic Initiatives.