No real estate agent, physical paperwork or sales centre visit will be required. “From your couch, you can actually do the full transaction and not have to leave the comfort of your home,” Matthew Slutsky, president and co-founder of Toronto-based BuzzBuzzHome, told CBC News.
The novel concept is already raising concerns — no surprise in an established industry currently under siege by emerging technologies that threaten to shake up the traditional real estate model.
Slutsky says new technology is behind his “buy now” button. His company already has a system in place to receive real-time information about pre-built condo sales and price changes. He plans to post his button in January for new condos and, some months later, add pre-built houses. Only developers who agree to participate will have their properties for sale online. “It’s going to be I think pretty revolutionary in the market, and I think it’s really going to change the game a lot,” Slutsky said.
Cyber home shopping
Here’s how it will work.
A buyer peruses BuzzBuzzHome’s extensive listings of new construction homes across Canada. After choosing a participating property and clicking on the “buy now” button, the buyer reviews the related documents online. The buyer can also select any available features such as a condo parking spot or locker. The buyer then digitally signs the purchase agreement and waits for the developer to sign off. The cyber shopper then secures the property with a deposit, paid online with a credit card. Slutsky says the initial deposit for new construction condos is typically $5,000.
Once the transaction goes through, the property is yours — as long as you can secure a mortgage and pay the rest of the home’s price tag, which will be required down the road as the project gets built. “It will allow for a much smoother process,” Slutsky said. He points out that, unlike resale homes, new home shoppers don’t have a physical property to view. Instead, he says, they can find everything they need online — from showroom photos to floor plans to builder reviews. Slutsky believes his button will appeal to buyers of pre-built projects who like to do their own research online and don’t want to waste time at a sales centre, enduring line-ups and sitting through the paperwork. “It’s a huge time savings if you know what you’re interested in,” he said.
Real estate expert John Andrew questions why anyone would want to save time on one of the biggest financial purchases of their lives. “Don’t you want to put some time into it — even just getting a feel, even just talking to a [sales centre] broker?” the Queen’s University professor said.
Andrew argues that home shoppers — even those buying new units — need to do their due diligence, everything from investigating a builder’s reputation to having a lawyer look over the contract. He worries a “buy now” button sends the wrong message, that purchasing real estate is a quick and easy transaction.
“It just seems to me it makes a very, very big decision, a very large investment almost cavalier,” he said. “It makes it absurdly convenient, absurdly informal.”
Slutsky argues cyber shoppers have plenty of online resources at their fingertips. Plus, he says, they can still seek the help of a real estate agent who will be compensated by the developer.
“In cases where the purchaser wants the extra input of the realtor, the realtor will not be left out of the equation and will get full commission,” he said. And for anyone who does make a rash, regretful purchase, Slutsky points out that many buyers will be protected by a “cooling off” period. Depending on location, the buyer may have up to up 10 days to back out of a new condo purchase.
Will it become the norm?
Condo investor Jen Goheen says she finds the traditional home buying method too laborious and would consider clicking on a “buy now” button for a future purchase.
“The real estate process is pretty antiquated,” she said, “so something like that would definitely make it easier.”
But then again, Goheen says, she’s had problems with a couple condo developers in the past and would only make a cyber purchase “as long as I had enough information, background and was comfortable with that.”
Regardless of whether individual shoppers do their research, Andrew still worries online real estate buying broadcasts the message that purchasing a home isn’t a big deal. “It just kind of sets the wrong tone,” he said.
Slutsky points out that people were once skeptical about buying merchandise online, but it has become the norm for many consumers. The same, he believes, will happen for online real estate purchases.
“Every other industry has started to go in that direction,” he said. “There’s very few things that you can’t buy online anymore.”