This is a moment for an Amazon for the housing market. Ease the pain a burdens of the home buying process. I have friends and co-workers who continue to rent just because the process as they say is worse than the California DMV on a Friday at 3 p.m.
I love the house we are lucky to live in. But I too remember the pain we went through to get it purchased and financed. It should have been far easier than it was and I can imagine if we ever sell it there will be other pains (unnecessary ones) we will experience on that end. Today’s guest Luke Johnson the CEO of Neat Capital is looking forward to a world in 2030 when both those ends of house ownership is infinitely less painful. 99.99% of you will not have heard of his company. Nobody will tell you that buying and financing a house is easy. To many of us it is the watermark for pain and anxiety.
It is also the largest financial decision 99.99% of us ever make. Yet in many ways from finding to financing and moving is a Byzantine business. Mortgage companies lost money in 2018, $8,000 per transaction.
MCLEAN, VA - JUNE 10: The Freddie Mac sign is shown at its headquarters Freddie Mac, a major U.S. ... [+]
Something is fundamentally wrong for both parties. We have rocket groups putting people into space. Why is so much pain caused and why has it not been changed?
However, in a rapidly evolving world where everything is becoming almost friction free there is no reason in ten years’ time, or less that this major personal investment should also be infinitely easier. If you believe you will buy your first house or another house in ten years’ time, then Luke’s views on the changes we should see are going to be intriguing. He believes the 7% - 8% of transaction costs will just go away. What is a 49+ day financing model will be reduced to a near real time process, without having to read hundreds and hundreds of pages of complex documentation. The listing agents work-load will be radically different too (virtual tours and access to homes when and how you want it).
Buying a house can be a great experience virtually
Millennials, Gen X, Y, Z and Alpha already invest less as a portion of their salary than previous generations on housing. Maybe this is the process, maybe this is a change in mindset. Go and type into Google how much should I spend on a house and you will see the whole range of complex decisions this all involves. Neat Capital is already on a 13-day financing model already. So lets’ hear what else is going to change. Neat Capital and its’ CEO Luke Johnson believe that world of ten years from now are going to radically different. So please listen to Luke’s views on the future of transaction costs, liquidity and most importantly consumer protection.
