Inman events are the best way to connect. Gain insights and build your network this October at the v,irtual Inman Connect where we’ll explore the Industry’s Playbook for the Fall Market. Then, join us in January for Inman Connect New York, in person or virtually. Reserve your tickets now, prices will go up!
Anywhere Chief Operating Officer Melissa McSherry has only been in the real estate industry for six months, but there are already two issues that are glaringly clear to the former Capital One executive — inefficient transaction management and overwhelming risks for consumers if a deal falls through.
Melissa McSherry | Credit: Realogy
“I’ve been in the company for less than six months, so I’m still very new and I’m approaching this with a lot of humility,” McSherry said during her first Inman Connect Las Vegas appearance on Wednesday. “But I do have some observations.”
“So the first one is, it does seem like in this industry there’s still a lot of manual work,” she added. “There’s a lot of basically paper [and] sometimes it’s digital paper, like a PDF, but it’s still got the challenges of paper, which just requires a person to look at it, read it and interpret it. And that just means that there’s a lot of work that people have to do.”
McSherry likened the transaction management process to the finance industry’s former way of handling credit applications, which required managers to manually process each request. The complexity of processing applications resulted in higher costs and longer approval timelines for consumers.
“Prior to Capital One, the decisions about whether or not to make a loan were made by people who were reading a credit report and were supposed to follow the rules [about approvals],” she said. “At [that] point, if you had good credit the average annual percentage rate was 18 percent, and most people with good credit today do not pay an 18 percent APR.”
Capital One ultimately drove down consumer costs when they figured out how to automate the credit approval system, which enabled officers to use their time and expertise for more complicated cases.
“That was a situation where the use of technology was very helpful to that industry, but ultimately also helpful to the consumers,” she said. “They were able to use technology to dramatically lower costs.”
McSherry said the same thing could be done in the real estate industry, which would free up agents’ schedules to focus on navigating the more complicated parts of serving their clients.
“It’s super frustrating if you’re the person that has to be entering information that should already have been captured somewhere,” she said in response to moderator Clelia Peters’ comment about agents commonly entering the same piece of information several times throughout a transaction.
In addition to streamlining transaction management, McSherry said the industry should work on reducing consumer risk during homebuying and selling. Hearkening back to her days at Capital One and Visa, McSherry said banks and merchants often absorb the risk of a fraudulent transaction — not the consumer.
“In credit cards and payments, the consumer doesn’t take the risk of a fraudulent transaction because banks and merchants are much better at figuring out transactions by tomorrow than the customer is, right?” she said. “So it strikes me that this industry is quite different
“For instance [think about] mortgage appraisal contingencies,” she added. “You’re really asking for a seller to accept the risk. It’s just sort of an oddness to who’s actually taking the risks in these transactions, even when you have a seller who maybe does this once every 10 years.”
McSherry said her goal at Anywhere (formerly known as Realogy), is to create a better experience for agents and consumers by using technology to reduce friction and risk. She said Anywhere has already implemented several updates, namely One-Click Title, which sends all relevant documentation to the title company as soon as its available.
“Agents can go into the same system that we use to manage contracts, push a button and order a title,” she said. “But one of the things that we do is we transfer all the information electronically including the purchase contract to the title agency.”
“That means if the agent doesn’t have to deal with the title agent that’s calling and trying to track all that stuff down,” she added.
As the market shifts and uncertainty increases, McSherry said it’s important for real estate brokerages to lean on technology that enables agents and consumers to navigate the transaction with as little stress as possible.
“I’ve been incredibly optimistic about the opportunity to fundamentally improve the lives of consumers, agents and brokers [and] really anybody who touches transactions,” she said.” You know, the timing of that may maybe not be in five minutes from now, but I fundamentally believe that that’s where we’re going to end up.”
