In the 1960’s, Hanna-Barbera produced an animated sitcom TV show called “The Flintstones” depicting family life in the pre-historic days. In this fantasy version of the past, cavemen co-exist with dinosaurs and other long-extinct animals such as saber-toothed cats, and woolly mammoths. Like their mid-20th century counterparts, these cavemen listen to records, live in split-level homes, and eat at restaurants, yet their technology is made entirely from pre-industrial materials and powered primarily through the use of animals. During the same time, Hanna-Barbera also created “The Jetsons,” the Space Age answer to the Flintstones. The Jetson family lives in a world with elaborate robotic contraptions, aliens, holograms and other futuristic inventions. While both groups functioned in their respective worlds, the Jetsons were more successful in my opinion. I see a similar divide in mortgage banking. It seems lenders are either stuck in the Stone Age or advancing into the future. The Flintstones might have been a funny TV series but it is not amusing as a business strategy.
In my lifetime, I have witnessed laptops so heavy that you couldn’t carry them being replaced by powerful lightweight iPads; Lotus 123 being eclipsed by Excel; and analog TVs surpassed by smart TVs that can stream shows on every device. NetFlix, Hulu and Amazon are classic disruptors that rethought their industries and are widely successful and dominant today.
Technological changes are happening at a rapid rate and mortgage lending is no exception. Yet some leaders and originators think that being a Flintstone will work today. They resist Day One Certainty or new technology because they feel it will replace them or because they don’t want to learn something new. They are happy doing what they always have done. The problem is that whether these originators like it or not, new technologies are a driving force in enhancing the customer’s experience by speeding up the process or reducing paperwork. Further, the advances on the horizon will be even more impactful. Lenders and originators that don’t embrace these technologies will become obsolete in the purchase money marketplace.
As we all know too well, customer experience is gauged in part by transaction speed. This does not mean that the relationship component in selling is not important. It still is but speed and ease of doing business are equally important in the definition of good service.
Another game-changer is that Facebook is significantly expanding the real estate listings section on its Marketplace. Facebook currently allows individual homeowners to list their homes for sale on Marketplace. According to Facebook, the feature is “rolling out gradually” and is currently only available via the mobile app in the U.S. This is Facebook’s attempt to take on Craigslist, eBay, and other e-commerce platforms. People will be able to list their homes for sale. Facebook is also ramping up Marketplace for rentals by joint venturing with apartment listing services.
As one real estate broker observed, “I predicted that some outside database operation would start a World MLS. I thought Zillow would do it because they already buy listings from many MLS vendors. But Facebook has the lead. The danger to Realtors is that these databases let FSBOs ‘list’ their properties. Next they could put in a co-broker commission, essentially bypassing and eliminating the listing agent. It happened to the travel industry and stock brokerages, it\’s just a matter of time for real estate. Be ready to work by the hour. Sellers may hire you to write contracts, open escrow, mount a lockbox. But the days of listing agent million dollar incomes are numbered.”
Whether this happens or not is anyone’s guess, but it is clear that the lead generation part of housing is changing. It is not a far stretch to see that housing finance would be next. Being a Flintstone could be fatal to your income and career.