already been accelerated by technology. But there are a few. Physical inspections still require onsite touring of properties. Renovations and repairs, when required, still need estimates and time to do the physical work. But most purchases really could be completed in a day or two. So why does the buying process still take 30-60 days? In 1989, I bought a house in four days using a normal mortgage (the mortgage was applied for and approved in one day). The mortgage company was affiliated with the builder and the builder needed the house sold by a deadline. Their need drove a fast closing. All the paper- work was completed on time. All the necessary checks were completed. Why isn’t this the norm, especially now when so many of the forms, checks, and studies can be completed nearly instantaneously? There are two reasons why the time from purchase to closing remains in the 30-day range. First, as it becomes faster and easier to do the required paperwork, the amount of required paperwork and number of checks and studies has increased substantially. The detail in the background checks increases. The sheer number of rules and regu- lations imposed by State and local regulators as well as mortgage providers and closing agents has proliferated with their ease in execution. Are all these new rules, protections, and processes really necessary? No. But they match the increase in bureaucracy and process in other aspects of life. Second, a real estate purchase is a large investment for most people. Perhaps it should take some time to complete, if only to provide the psychological distance necessary to ensure it is the right transaction to do. That kind of distance can’t really be improved or sped up by technology. And while reports about properties can be generated nearly instantaneously, it takes lon- ger for them to be reviewed, digested, and understood. Technology has already impacted real estate pur- chases and investing, and new technologies are poised to make even more of the real estate pro- cess fast and efficient. As long as new regulation and process requirements don’t continue to ex- tend the buying process and counter the techno- logical efficiency, we can expect that buying real estate may become a much shorter process. But there will be human limits in evaluating a transac- tion that no technology can replace or improve. •
Steve Streetman, president of StreetSmart Investments, LLC, a commercial real estate investing company, is an avid cryptocurrency investor and has worked in cryptography and high-end computer modeling for over 30 years. He is currently working such diverse projects as weapons of mass destruction terrorism risk assessment,
applying artificial intelligence to selecting stocks, and deconvolving environmental and genetic factors in soybean and corn test modeling. He teaches commercial real estate investment courses and is a real estate agent with RealInvestors Real Estate Services. His book “Cryptocurrency and Real Estate: How Bitcoin and BlockchainWill Transform Real Estate Investing” is anticipated to release in fall 2019.
32 | think realty magazine :: february 2020
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