Traditionally, residential real estate was an old-school business controlled by franchised brokerages and local multiple listing services (MLSs).
But an explosion of third-party, open data websites is changing the way consumers search, buy and sell real estate.
In the June issue of the Housing News Report — formerly the Foreclosure News Report — RealtyTrac looked at how “big data” is changing real estate. In an article titled “What You Need to Know About Big Data: Real Estate by Algorithms,” we explored the changing nature residential real estate. Here is an excerpt from the June issue of the Housing News Report:
Big changes are coming for real estate.
In the real estate universe there’s been a lot of talk lately about “big data” — and what it means for Realtors, investors and the real estate industry overall.
“Big data” refers to our newfound ability to collect and crunch vast amounts of information, analyze it instantly, and draw sometimes astonishing conclusions from it.
A revolution on par with the Internet or perhaps even the printing press, big data is changing the way real estate is marketed, bought, sold, traded and rented.
Consider what’s going on in San Francisco.
A couple of former PayPal and Trulia executives have decided they want to get into the “flipping” business. Starting in July, they’re launching a big data online home flipping platform, where potential sellers can log-on, get a value for their home — and instantly — sell their home to the Webs latest real estate entrepreneurs. If the seller likes the price, they click a button and the deal is closed in 72-hours.
No loan contingencies. No escrow. No appraisals. No hassles. Just all cash deals.
Called OpenDoor, the latest big data startup is the brainchild of Harvard Law School alum Keith Rabois, a former PayPal, Square and LinkedIn executive, and Eric Wu, the head of “geo” products at Trulia. A third partner is Ian Wong, a former Square data scientist. The San Francisco-based company has raised $6 million in start-up money, according to U.S. Securities and Exchange filing.
They will work with seller directly to purchase homes, then rehab and list the properties for sale with a local broker and sell them retail buyers and investors.
“My belief is that if you added a frictionless, convenient, simple process, more people would sell their homes,” said Rabois, a Stanford-trained venture capitalist at Khosla Ventures, speaking to Venture Beat. “The process of (selling a home) hasn’t been transformed by technology. This can be a $10 billion to $100 billion (business) if we just do the U.S. correctly.”
Rabois’ latest online startup is code named HomeRun, according to GeekWire. HomeRun will analyze lots of data — some being proprietary, some not — to make split-second valuationa of properties, with minimal human interaction.
As the HomeRun project steps up to the plate this summer, it will be interesting to see if they get on base hit or strike out.