—Title Agents and Real Estate Professionals Believe Demand for Greater Security and Efficiency Will Be Key Drivers for Greater Fintech Adoption in 2020, Says Chief Economist Mark Fleming—
First American Financial Corporation , a leading global provider of title insurance, settlement services and risk solutions for real estate transactions, released First American’s proprietary Real Estate Sentiment Index (RESI) for the fourth quarter of 2019. The RESI is based on a bi-annual survey of independent title agents and other real estate professionals, providing a unique gauge on the real estate market using the crowd-sourced wisdom and expertise of real estate experts.
“The 2019 housing market turned out to be surprisingly strong, driven by a variety of favorable dynamics. Millennial-driven, first-time home buyer demand continued to rise, the economy reached its longest expansion in US history in the third quarter of 2019, and rising wages pushed household incomes higher,” said Mark Fleming, chief economist at First American. “Mortgage rates, which began their descent in December of 2018, continued to fall through September 2019, and have remained near historic lows since. In the second half of 2019, higher incomes and low mortgage rates increased home buying demand while supply remained tight, fueling faster house price appreciation.
“Millennials, the largest group of prospective home buyers, expect greater efficiency and convenience in their home-buying experience. In the strong sellers’ market of 2019, the demand for greater efficiency accelerated as more home buyers felt pressure to settle deals quickly before opportunities fade away,” said Fleming. “Given these trends and market forces, as part of our bi-annual First American Real Estate Sentiment Index, we recently surveyed title insurance agents and real estate professionals across the nation for their perspective on how financial technology (fintech) can improve the home-buying process.”
Security Remains the Priority
“In the fourth quarter of 2019, we asked title agents and real estate professionals the same question that we asked one year ago: what financial technology will have the most impact in helping home buyers close their transactions faster and more efficiently? One year ago, 45 percent of the title agents and real estate professionals surveyed agreed that the most important financial technology was secure collaboration and communication portals between all parties to the real estate transaction,” said Fleming. “This remained true in the fourth quarter of 2019, as 35 percent of respondents still considered secure collaboration and communication portals between all parties to the real estate transaction the most important.
“One of the major trends affecting the real estate industry may explain why the 2018 and 2019 survey findings were consistent – the rise in wire fraud,” said Fleming. “Survey respondents indicated that buyers would benefit greatly from a secure platform that allows them to correspond with lenders, real estate agents, escrow officers, and other parties involved with the real estate transaction.”
Moving from Wet-Signed Documents to a Paperless Real Estate Closing
“A faster, more efficient closing process is very important to prospective home buyers. It’s unsurprising then that 28 percent of percent of title agents and real estate professionals surveyed believe that hybrid eClosings will have a large impact in helping home buyers close their transactions faster and more efficiently,” said Fleming. “Since many documents need to be signed in a real estate transaction, a hybrid eClosing means that many documents may be reviewed and eSigned in advance of the closing, while some documents must be wet signed in person. The benefits? A faster and more streamlined closing experience, and reduced risk of manual errors, just to name a few.
“Similarly, 17 percent of title agents and real estate professionals surveyed believe that remote online notarization will have a large impact in helping home buyers close their transactions faster and more efficiently,” said Fleming. “Remote online notarization allows a notary to notarize documents remotely over the internet via tamper-evident digital tools, the latest fraud prevention technologies, and live audio-video conferencing. This technology already exists, and has been accepted as an alternative to traditional in-person notarization in several states.”