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Modernizing The Real
Estate Transaction
Process
Reengineering the Consumer Experience
Travis Wright
THE FALL OF TITANS Sears Financial Network: CB, Dean Witter, Allstate
Merrill Lynch: Real Estate, Mortgage, Relocation
Prudential Insurance: Real Estate, Mortgage, Relocation
Met Life: Century 21 & Mortgage
General Motors: GMAC Home Services
Meredith Publishing: Better Homes & Gardens Real
Estate
Realogy: Real Estate, Mortgage, Relocation,
Title Insurance
Brookfield Asset Management: Real Estate, Relocation, Mortgage
Their Unrealized Goal:
Seamless, 1-Stop Shopping
WHAT CAN WE DO, THAT THE TITANS COULDN’T?
Pass legislation?
Build technology solutions?
Invent a standard?
Publish white papers?
Be a curator of industry issues?
Create a movement: Evangelize & Galvanize?
Design a trading & exchange platform?
What does that any of that mean?
NAR
MIS
MO
ALTAMBA
CF
PB
IAAOPRIAAIOGCRESO
THO
MSO
N
REUTE
RS
SIS
COM
ISM
O
FA
CIL
ITA
TO
R
Modernization
Organization
MEMBERS
BOARD
Committees
Workgroups
REAL ESTATE EXCHANGE
& TRADING PLATFORM
Standards
Bodies
Industry
Titans
Trade
Associations
Consumer
Advocates
Government
Agencies
Technology
Vendors
Executive
Staff
STAKEHOLDERS IN MODERNIZED REAL ESTATE TRANSACTION PROCESS
1,000,000
Realtors;
900 MLS’s
300,000
Practitioners
150,000
Practitioners
24,000
Appraisers
3,600
County
Recorders
Da
ta &
Tra
nsp
ort
Sta
nd
ard
s fo
r
Pro
pe
rty L
istin
gs
Do
dd
-Fra
nk
Co
nsu
me
r Pro
tectio
n
Mo
rtg
ag
e, T
itle
,
Ap
pra
ise
r, R
eco
rde
r
Do
cu
me
nt S
tan
da
rds
Private Sector Providers
Trade Associations of Transaction Service Providers
TRANSACTION TRADING PLATFORM
§ 5 Million Home Sales
§ 8 Million Consumers
§ 2 Million Service Providers
§ $1 Trillion Gross Sales Value
§ $100+ Billion in Service Fees, Premiums, Commissions
Sta
nd
ard
s B
od
ies R
eg
ula
tory
Bo
die
s
CONSUM
ER
ADVOCATE
S
MODERNIZ
ATIO
N
COUNCIL
NAR MBA ALTA AI PRIA
CF
PB
MERSMORTGAGE
FUNDING
TITLE
INSURANCE
PROPERTY
INSURANCE
MIS
MO
RE
SO
TECHNOLO
GIS
TS
PLA
TFORM
TRADIN
G P
ARTN
ERS
© Wright | Strategy | Advisors
REAL ESTATE
BROKERAGE
WHO CARES?
Who asked us to create the future?
Will the private sector trust our business insights?
Will legislators heed our views?
What about trade associations? What about standards organizations?
Who will follow us, support us?
Realtor Commissions $50,000,000,000
Incremental Value of Loan Originations: 5% $40,000,000,000
Title Insurance $10,000,000,000
Appraisal Fees $2,000,000,000
MBS Trading Fees $3,000,000,000
Recording Fees $350,000,000
Transfer Taxes
TOTAL ESTIMATED FEES $105,350,000,000
RESIDENTIAL REAL ESTATE INDUSTRY
THE PRIVATE SECTOR CARES: $100+ BILLION
AND THE CONSUMER CARES
5 Million Home Sales
NEW HOMES
& RESALES
THE AMERICAN
DREAM
$1 Trillion
GROSS ANNUAL SALES VOLUME
$60B Spent After
Move-In
77M Monthly Internet Viewers
2 BILLION MINUTES:
REAL ESTATE IS LIKE A CABLE TV CHANNEL!
$13B Spent for
Online Ads
AMERICANS LOVE HOMEOWNERSHIP
BUT NOT THE HOMEOWNERSHIP PROCESS
THE PROCESS NEEDS SUPPLY CHAIN
TRADING PARTNERS
Disclosures
Title
Search Title
Commitment Property
Information
Report
Report
$$$
Copies of
Contract
Purchase &Sale
Contract
Report
Disclosure
Packet
Inspection
$$$
$$$
$$$
Disclosure
Packet
Pest
Inspector
Roof
Inspector
House
Inspector
Other
Agent
Other
Agent
Client
Client
Seller
Buyer’s
Attorney
Listing
Agent Selling Agent
Title
Company
Appraiser
Property
Insurance
Agent
Other
Agent
Client
Lender
Seller’s Lawyer
County
Recorder
Inspector
Additional
Inspections
Buyer
?
Copies
of Loan
Documents
Search, Exam
Prelim
Recordable
Documents Title
Insurance
Policy
Loan
Documents
Inspection
Hazard
Insurance
Policy
Home
Warranty
Plan
Property
Information
Reports Report
Sign
Documents
© WRIGHT | STRATEGY | ADVISORS
WHAT IS SUPPLY CHAIN MANAGEMENT?
Supply Chain Management is management of a
network of interconnected businesses involved in the
provision of product and service packages required by
the end customers in a supply chain.[2]
Supply Chain Management spans all movement and
storage of raw materials, work-in-process inventory,
and finished goods from point of origin to point of
consumption.
SUPPLY CHAIN FUNDAMENTALS
• Real time demand inputs from point of sale back upstream to suppliers
• Suppliers can then gauge demand and throughput requirements
• Today, all stakeholders do NOT communicate demand, supply or
logistics availability between one another
SUPPLY CHAIN
SUPPLIERS MANUFACTURERS WAREHOUSES & DISTRIBUTION CENTERS
CUSTOMERS
Material Costs
Transportation Costs
Transportation Costs
Transportation Costs Inventory Costs Manufacturing Costs
• Lenders
• Title Insurance
• Home Builders
• Home Sellers
• Realtors’ Offices
• Builders’ Models
• MLS’
• Internet Portals
• Homebuyers
• Homesellers
• Investors
• Renters
WHY THE REAL ESTATE TRANSACTION PROCESS IS
DISCONNECTED
Transaction Providers Are Not True ‘Trading Partners’
• Realtors…for the inventory
• Lenders…for the financing
• Title Insurers…for the assurance and guaranty
• Settlement Agents…to accurately close the transaction
• Recorders…to make it legal and give public notice
• Securitizers…to keep capital in the supply chain
• Regulators…to prevent financial abuse and fraud
The Providers’ individual supply chains are not
linked to a supply chain platform
Who should own or manage
the supply chain
platform?
WE’RE ALL IN THIS TOGETHER
Gov’t
Oversight
Consumer
Search Sites
eTransaction Platform (Data, Documents, eSigs) eClosing
eRecord
POS & LOS System
SMARTDocs
eDoc
Custodian
§ Closing Agent
§ Title Company
§ Attorney
County RecorderCourt House
Recorder | Assessor | Taxation
Mortgage
Origination
Sales
Contract
REALTOR
Loan App
Initial
Disclosures
GFE, TIL
Loan App
Loan Quote
Rates &
Pricing
Lock
VOE, VOI
Credit
MI
Appraisal
Title
Closing
Documents
eNOTE
Deed
eFile
Title Search,
Examination,
Curative,
Underwriting
eVaulting
LOAN
SERVICERS
eDisclosures
SELLER BUYER
Archive
eRecording
Paper
Documents
eVault
eVault
Property Search | Analysis | ContractOrigination | Appraisal | Title Exam |
Closing | Recording | Disbursements
MLS
PROPERTY
DATA
(RETS) Processing
Property
Listing
eSignatures
Electronic Audit & Compliance Trail
Real Property Transactions Mortgage & Title Transactions
Mortgage
Backed
Securities
(MBS)
§FANNIE
§FREDDIE
WALL ST.
INVESTORS
eDelivery
· MIN
· MOM Loans
Capital Markets Transactions
Securitization
Data Data
Data
Warehouses:
Analytics
Appraisal
UMDP | UCDP
UAD | ULDD
Brokerage
IDXSearch Portal
Syndicators
© All Rights Reserved
Wright | STRATEGY | Advisors
T h e S u p p l y C h a i n o f R e a l P r o p e r t y T r a n s a c t i o n sConsumers
Lender’s Back Office System
Realtors LendersAppraisers Title &
Closing
Attorneys Recorders Securitization RegulatorsInsurers InvestorsTechnologistsCredit
Agencies
Notarization
eNotarization
MERS as
Mortgagee
State Laws
I WENT LOOKING FOR A SUPPLY CHAIN MODEL
NYSE Wal-Mart
Toyota Expedia
THE NEW YORK STOCK
EXCHANGE (NYSE)
The origin of the NYSE can be
traced to May 17, 1792, when
the Buttonwood Agreement was
signed by 24 stockbrokers
outside of 68 Wall Street in New
York under a buttonwood tree
on Wall Street.[8]
On March 8, 1817, the
organization drafted a
constitution and renamed itself
the "New York Stock &
Exchange Board."
NYSE AND THE REAL ESTATE VERTICAL
NYSE
trades $150B daily..or $750B per week. Estimated $36T per year of
trades and re-trades. $4B revenues.
Residential Real Estate
trades at $1T per year (est.)
Mortgages
trade at $2T per year of refi’s &
purchases (est.)
Real Estate Vertical
is approx. $3T per year, or roughly
10% of the NYSE trade volume
NYSE Trades On a
‘Capital Markets Community Platform’
From EMC and VMware
SUPPLY CHAINS SHOULD HAVE CONNECTIONS
• New Construction
• Desire to Sell
RAW MATERIAL
• New Home
• Existing Home
FINISHED PRODUCT - INVENTORY
• Realtors
• Home Builders
MARKETING
• MLS
• Realtor Website
• Internet Portals
DISTRIBUTION
• Internet
• Realtor Office
• Builder Model
RETAIL OUTLET
• Bank
• Broker
• All Cash
FINANCING
• Title Agency
• Settlement
• Co. Recorder
TITLE – CLOSING – RECORDING
• FHFA
• Private Placements
SECURITIZERS
• CFPB
• RESPA
• State
• County
REGULATORS
A HOMEBUYER’S SUPPLY CHAIN
SUPPLY CHAIN PLATFORM STANDARDS
Trading Partner
Exchange Platform
Data Standards
Transport Standards
Digital Documents
Electronic Signatures
Disclosures Partner Audit
Trails
Trading Partner
Alliances
CAN WE MAKE IT HAPPEN?
Travis Wright
281-217-2789
