When news of Uber’s foray into the complex world of real estate hit the wires this past week, many industry watchers took note. The premises for Haus, the new start-up by the Cofounder of Uber, Garrett Camp is to bring transparency into the bidding process between home buyers, sellers and their agents.
How Haus works:
The online platform will allow buyers, sellers and their agents to see (in real time) when offers and changes to offers are made during the bidding process AND respond accordingly. The platform promises to deliver an experience which creates side by side comparisons so that home owners and potential buyers can make fully informed decisions about the home they are bidding on. At the heart of the issue is the concept of ‘real time’.
Super-heated real estate:
Most of the country is experiencing a super heated real estate market. In West Michigan, it is not uncommon for some homes to receive multiple offers within a 24 hour period. Anxious buyers wring their hands as they are informed that offers will not be presented UNTIL a particular time or that they should consider re-submitting their ‘highest and best’ offer due to multiple offers coming in on the same property. Although the majority of real estate agents are honest, there is no way of actually verifying IF additional offers are being presented and so, home buyers are left wondering just how much more they will have to bid to secure the right to purchase the home of their dreams.
Pride and prejudice:
Another largely unspoken aspect of the process is the fact that purchasing a home is not necessarily based on price. Prejudice and preference can sometimes play critical roles. Many homeowners have their own ideas about whom they would prefer to purchase their homes. This may be based on personal preferences, or their concerns about the welfare of their neighbors. Latent within these normal human emotions and desires lies the potential for discrimination, an issue which is a matter of Federal law when applied to the real estate transaction.
Loving a home can infatuate the mind. It can make a home buyer willing to do just about anything to gain an edge or advantage. One of the more commonly used vehicles is a ‘Dear Homeowner’ letter where the potential buyer details why they love the home and why the home owner should in essence ‘pick me!’ Buyers have been known to research the owners place or worship, likes and dislikes and fashion their offers to tug at the home owners emotions. Sometimes, this has included providing pictures of themselves so the homeowner can see who they are.
When secrecy becomes illegal:
The problem with this is a little thing called the law – which prohibits discrimination when it comes the buying, selling or renting of housing based on some very specific criteria. The Federal Fair Housing Act of 1968 and the Federal Fair Housing Amendments Act of 1988 prohibit discrimination on the basis of: race, color, religion, national origin, age, disability, handicap, sex, gender and often local ordinances (State and community) have additional qualifiers.
So, to some extent the secrecy which has shrouded the real estate process has served as a cloak for some of these illegal behaviors. For the same reason that booking a table reservation by Open Table is a preferred vehicle by many when they consider the convenience and the simplicity of not dealing with host/hostess reservations, the idea of being able to view, counter and negotiate a transaction in an open forum might be appealing to a significant segment of the population.
Will we purchase houses like we book online reservations?
Haus does not claim to be a brokerage, financial adviser or tax expert, but the platform may become a tool which serves to bring the bottom line into a transaction negotiation in a very direct way. That being said, buying a house is not like purchasing a car. And, for a homeowner, the process is not just a financial investment, but also a relational and emotional one. It will be interesting to see how or if this catches on as a preferred method of negotiations during a real estate transaction and more importantly to the bottom line, if this results in higher bids for home owners.
Additional Articles about additional industry new comers:
Roofstock’s better way to buy and sell homes
Yopa: Online property agent