As technology continues to develop at a lightning-fast pace, the validity and necessity of many long-standing institutions — like banks, for instance — are being challenged.
This likely comes as no surprise to many, as companies based in Silicon Valley and beyond have been forging new trails and upheaving the common practices many individuals have grown accustomed to.
However, it would seem as though these major startups — specifically of the financial technology, or “FinTech” variety — could have their sights set on disrupting another common field, which employs millions of talented individuals and is the very reason many people have roofs over their heads: real estate.
With this in mind, let us take a deeper look at the biggest FinTech contenders, as well as the threats they may pose to the real estate industry.
This startup aims to change the way developers fund their projects. This is achieved by allowing users to set up a crowdfunding portfolio, which interested investors can view and finance by purchasing Notes or Membership Units. This cuts out the expensive middlemen and gives each respective party far more control than traditional Real Estate Investment Trusts (REITs).
In large metropolitan areas like New York, Los Angeles, and San Francisco, legally subletting an apartment can be a frustrating process for all involved. This is why Flip was created, as it allows users to list their properties and create detailed profiles to attract subletters. Those who list their properties are also able to view in-depth reports on their potential tenants, including their credit scores, verified income, and long-term history of paying rent on time.
This tech startup has posed itself as the catalyst for the potential demise of traditional brokerage firms. Redfin stands out from the competition due to the fact that it does not redirect its users to brokerage firms they are partnered with (a la Trulia and Zillow). Instead, they direct users to their own brokerage business, which is complete with real estate agents that boast low commissions and high technology.
Anyone who has ever bought or sold a property knows that getting an appraisal is one of the most crucial steps in the process. Bowery turns the traditional valuation function on its head by creating a proprietary appraisal platform that utilizes the power of big data (i.e., public records, comparables, relevant metrics, etc.) to provide users with the most accurate property appraisals possible.