On a lazy Sunday afternoon, you are reminded that you need to replace your old television. You log in to Amazon and place an order for a brand new television. Over years consumers have adapted to do low and mid-value transactions online. But would you be ok finalizing your house online, just like a television? Why?
Since the pre-internet era, companies and brands spent a lot of focus and efforts to build their distribution networks. Distribution is a means to send your products to where demand is. Internet changed everything. Now people could find and order items online to be delivered to them. Through online distribution e-commerce companies have disrupted traditional brick & mortar models and gained massive market share. The same is not true for real estate. In this market, distribution cannot happen online. Customers need to visit the houses. Around 8,000 houses are rented out in Gurgaon every month – none is done without a house visit.
There are two key reasons for the same. First, house is a very high value transaction (buying or renting) and people are not comfortable transacting online without confirming it physically. Second, unlike mobile phones, house is not a standardized product, with standardized prices. Hence, traditional internet solutions have not worked in Real Estate and the sector has practically not moved beyond the classifieds.
That said, it does not mean technology can’t solve real estate – maybe mobile technology can succeed where internet failed. Today, a typical tenant checks out over 14 rental options over 12 days with 5-6 different brokers. That’s a broken and tiring process which induces unnecessary friction for the customer. Technology can solve the problem in two parts:
- Comprehensive home research and shortlisting online
Home seekers will never finalize a house online but the home search process starts with research and shortlisting. Unfortunately, even that process today is completely offline. Information on RE Classifieds is neither authentic nor complete and does not aid to your research. To make that switch, available inventory has to be aggregated and curated for easy comparison online. Customers can save up to 60% of their search time just by pushing their research online.
- Allow home seekers to self serve home visits
Massive friction is induced in the system because of the ‘assisted’ home visits by brokers. It’s a logistical challenge to arrange home keys, coordinate schedule with owners/agents etc. Customers can self serve – they need information, not a salesman. Mobile technology can guide them to all available options and leave it to them to decide what they want to see & select. On average, home visit time can be brought down from 40 minutes to just 15 mins.
The first part was possible even with (non-mobile based) internet but unviable as a standalone service. The second part, which enables transactions, is now possible with mobile tech.
At FastFox, we are working on these two principles to reduce a home seeker’s efforts down to hours, from days/ weeks. We are aggregating rental inventory across the city as we work with agents and affiliates, who do a great job of discovering inventory. We have also introduced the concept of Open House. A simple process where customers can use a mobile app to visit properties open for viewing – significantly reducing the effort to select & visit best available options.
While internet has had a very limited impact on real estate so far, we believe change is here. Mobile technology makes a lot of solutions possible. Home renting process can be simple, predictable and much shorter with mobile technology.
Author: Pallav Pandey
Passionate about building tech-enabled businesses in emerging markets. Excited to work with young companies in their journey from 0 to 1.