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WilmingtonBiz Magazine

Real Estate's Next Tech Leap

By Johanna Cano, posted Mar 26, 2019
(Illustration by Krys Kinsel)
Technology has changed, in many ways, what shopping looks like. Instead of piling your family in a car and driving to the nearest mall, shopping can now be done with a few clicks on a smartphone.
 
Technology has also been increasingly implemented in homebuying and selling, one of the largest transactions most people will make in their lifetime. Additionally, there are also more technology-based options for managing homeowner associations and connecting real estate investors.
 
With more technology platforms in the market, those in the industry are keeping an eye on them and recognizing it is important for Realtors to work with technology and not against it, said Tony Harrington, president-elect at Cape Fear Realtors.
 
“It’s vital for Realtors to be cognizant of technology in the marketplace,” Harrington said. “We know clients in this age will go to the internet first to explore.  We are always watching the industry and trying to continue with the trends and stay on top so that we can continue to be that important piece of the puzzle in transactions.”
 

Zillow, a real estate database company based in Seattle, launched Zillow Offers in 2017 where homeowners could get a cash offer and sell their homes to Zillow. Initially it launched in test cities Las Vegas and Orlando, Florida, and has been expanding its footprint since, including into parts of North Carolina.
 
When asked earlier this year if Zillow Offers would ever come to the Wilmington area, Jeremy Wacksman, president of Zillow Group, said it is a possibility.
 
“I would say eventually yes, but you’ll see us open in metropolitan service areas that have a lot of density where we can develop the operation and then we’ll think about how we regionally scale from there,” he said. “The great thing about Zillow Offers is we think it can be taken to many cities around the country.”
 
Because Zillow Offers has not opened in a market like Wilmington, it is difficult to gauge how it could impact the area, however, real estate agents will always be part of the deal, Harrington said.
 
“Our opinion in the world of Realtors is that the Realtor will always be center in the transaction,” Harrington said. “With technology coming in and being more prevalent in our society our goal is to continue to educate the public. We are hands-on, and we are educated professionals connected to the industry. You don’t necessarily get that off the internet.”
 
 What Zillow Offers is bringing to the real estate market is an easier and faster way to sell homes, Wacksman said.
 
“Real estate is still a really complicated process, fraught with risk and hassle,” Wacksman said. “That’s what led us down this path of, well, couldn’t we make selling your house as easy as the press of a button?”
 
With Zillow Offers, homeowners interested in selling their homes can type in their address, input basic information such as square footage, photos and recent repairs. Within 48 hours the homeowner receives two home values, one from the pricing team at Zillow and another from a local real estate agent.
 
If the homeowner chooses to move forward with the Zillow offer, an evaluator goes to the house and does a free home inspection, where the offer will be re-evaluated, and the homeowner receives a final cash offer. The homeowner can pick a closing date as soon as five days or 90 if they need more time.
 
Zillow offers a fair market value for the home, and a fee is charged for renovations and holding costs, which falls in line with the fee a real estate agent would charge, said Jordyn Lee, communications manager at Zillow.
 
Zillow Offers launched in Charlotte last year and in Raleigh in January.
 
Zillow Offers has opened in markets that have comparable homes, Wacksman said.
 
“We were looking for a lot of similar types of homes. Cities like Charlotte and Raleigh have a lot of single-family homes and condos of a certain type,” Wacksman said. “Right now, we’re starting at homes that look about like the median.”
 
Part of the Zillow Offers platform is its partnership with a local real estate agent who is present for either the sale or purchase of the home.
 
In Raleigh, Zillow has partnered with Quentin Dane, CEO of DASH Realty Group, a team within Coldwell Banker Howard Perry and Walston.
 
Dane decided to partner with Zillow Offers because he had already been part of the Premier Agent program, where Zillow connected him with potential buyers.
 
“Now through the Zillow Offers program, they allow me to get in front of ready, willing and able sellers, which it was a natural fit,” Dane said. “This just was a natural progression for our business.”
 
While the Zillow Offers program is new in Raleigh, Dane has already seen its impact.
 
“It’s been overwhelming,” he said. “January is typically a slow time in real estate, and we’re in the middle of our busiest January by far.”
 
Some Wilmington-based companies have developed products for other real estate-related sectors.
 
Vantaca, a software for managing homeowner associations, started in 2015 when its CEO Dave Sweyer partnered with two developers to create software that can be used by CAMS, a property management company also led by Sweyer.
 
“The HOA industry did not have a software solution that met the needs for our company, so we decided to develop our own solution,” Sweyer said. “We made several peer companies aware we were developing our solution and they expressed interest in purchasing, so we formed a company for the software and started selling to all HOA management companies.”
 
The software allows HOA boards to customize workflows, view and process  banking transactions and communicate via email, text or alert.  
 
Vantaca has a business intelligence tool that offers analysis to help HOA  management companies understand customer and employee performance, Sweyer said.
 
“Our goal is to make Vantaca very intuitive,” Sweyer said. “User experience plays a big role in software success, so we constantly get feedback from customers to ensure our software is easy to use.”
 
And when it comes to real estate investment, Wilmington-based Connected Investors has the goal to offer a social network platform for investors.
 
The company, founded by CEO Ross Hamilton, provides a platform for real estate investments where buyers and sellers can network and view inventory, and through its CiX. com website, users can meet with lenders to fund their investments.
 
In 2018, the company reported it had $10 million in revenue  and planned on moving from tekMountain to a bigger office space in downtown Wilmington.
 
Hamilton said he was inspired to start Connected Investors after delving into real estate investment himself and realizing how important connections are.
 
“The second someone downloads our app, they can communicate with other real estate investors in town,” Hamilton said. “Traditionally it would have taken years to meet those people.”
 
Real estate is traded in an inefficient market and new platforms have the potential to assist buyers and sellers in navigating around these inefficiencies, said Edward Graham, professor of finance at the University of North Carolina Wilmington.
 
“A great many platforms, every one of which has a digital ‘core,’ have been developed to address this inefficiency, to improve the real estate market and to reduce the costliness of completing real estate transactions,” Graham said. “Most folks expected the evolution to a more streamlined market to occur quickly, but such has not been the case.”
 
While technology is offering new ways to do real estate transactions and manage information, there is still a need for trust and assurance within those tools.
 
“One of the things that has not changed in the 20-plus years the internet has been around,” Wacksman said, “is how often people want great agents and great advice in their transaction.”
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