Blog-Tech-Trends-REO

Latest Tech Trends for REO Servicers

December 17, 2020

Although the real estate industry might be lagging behind current tech trends, there are some cutting-edge tech solutions that help improve efficiencies for REO servicers. For example, online marketplaces help enable prospective homeowners to search for properties and even make offers from their cell phones. 

Altisource is doing some exciting things with Hubzu, an online real estate marketing platform that has facilitated the sale of over 210,000 homes via a transparent online sales and auction process. With more than 1.6 million active users and over 4,000 property listings, Hubzu is among the nation's largest online residential real estate auction sites. Patrick McClain, Senior Vice President, Hubzu Auction Services, discusses recent tech trends and how they’re impacting the industry.

The use of mobile devices is on the rise

Although mobile devices are no longer a new technology, their use in the online marketplace is a huge trend right now. “The vast majority of our traffic now comes from mobile devices,” says McClain. “Buyers are not only searching for properties online through their mobile apps and mobile-responsive websites, but we're also seeing an increase in comfort around using them to place bids, track assets or status updates, look for notifications and so forth.”

Who is driving this increase in mobile use? According to a 2018 report on real estate in a digital age by the National Association of REALTORS® Research Department, 76 percent of all buyers found their homes and 17 percent of all buyers found an agent, using a mobile device.

Expanded marketing options and increased buyer demand

Another one of the most influential tech trends in the online marketplace involves the expansion of marketing efforts. Although traditional listings continue to be very important, many large and midsized servicers are very eager to expand their marketing and disposition options. Hubzu, for example, invests heavily in marketing, which amplifies exposure of each property through extensive multi-channel promotion. This investment, coupled with a strong focus on data management and analytics, work in tandem to establish buyer demand.

Leveraging online marketplaces in tandem with using multiple listing services (MLS) listings has led to great success. McClain explains that “engaging with auction strategies and online marketplaces earlier in the default cycle helps to cast a wider marketing net and increase buyer demand.”

Workflow management boosts efficiency

According to McClain, “Investing in workflow tools helps [sellers] manage their inventory in a more compliant and efficient way. It also increases efficiencies by allowing service providers to manage their access to the ecosystem that facilitates effective communication.” 

Not only does a centralized workflow management system help consult with sellers on any process, but McClain believes it streamlines the process for both buyers and sellers. “It helps decrease the timelines and some of the trade-offs and handoffs we see in things such as document execution and approvals.” 

New technology, new buyers

Historically, when sellers weren’t getting appropriate offers, they leveraged the auction as a disposition late in the default cycle by using MLS listings and their network of agents. They would then flip the asset over to an auction disposition to widen the net. As recently as a few years ago, it was primarily investors that were coming in—experienced investors who were buying multiple properties a year either as a fix and flip strategy or as a rental strategy. Yet now, because buyers are becoming more comfortable placing offers online and the auction is being leveraged as a disposition earlier in the cycle, the buyer pool is expanding. 

McClain believes that “we have a larger percentage of what we consider a retail buyer or end user, which is someone who is going to buy that house to live in it as their primary residence.” He’s also excited to see more mom and pop investors who are looking for their first or second rental homes—people who may buy a property every two or three years. “It’s really gone from just a pure large scale investor to a more diverse buyer population.”

Transparency as a best practice

It is important to keep the auction process as transparent as possible. Hubzu, for example, is constantly looking at how it can tailor marketing and auction strategies to make it clear to buyers what they are bidding on. McClain says, “We invest heavily in professional photography when appropriate to cast the house in its most accurate but best light. We have a very clear bidding clock that shows how much time is left in that auction event.” He adds, “Users are systematically vetted to make sure they have a vested interest in participating in the auction and completing the transaction.” 

Hubzu also features a bidding wizard that tracks bids as they come in. This ensures that every bidder is registered and competes with an actual person who is committed to following through on the sale. Users are also asked to make a deposit before they are allowed to bid on a property to show they intend to complete that sale. This transparent process helps Hubzu users feel safer.

How will the continued growth of the online real estate marketplace affect servicers and buyers? McClain hopes that this technology will help the industry become more inclusive: “There are some investors who are intent on getting as much inventory as they can at the lowest price as possible. That's great, as it’s a part of their business plan and we certainly welcome anybody to participate. But we also want to make sure that they are not boxing out anyone else who is interested in that property.”