The Unfortunate (but Improving) Reality of Buying a New HomeBy Eduardo Orozco | Thu, 04/28/2022 - 09:00
You are ready to buy a home, finally. It has been years in the making. You have been looking at videos on YouTube, you've listened to podcasts and read blogs to prepare for this. For three full years, that extra percentage of your salary every month, your bonus, and your company savings plan have all gone into your savings account in preparation for today. It has been really hard, saving, being disciplined, not taking the expensive trip your friends went on, discipline. You have also decided that you want something brand new. The excitement could not be higher. It's time to get ready for your future.
Like most other buyers (95 percent to be precise), you start your search in the best place to search: online. You have a particular interest in buying a new home, you’re drawn to the latest and greatest. You log into two well-known websites and start filtering. The results come up but the first moment of reckoning happens: there is surprisingly little information about the product. Based on some images and general characteristics, you come up with a shortlist of eight that seem viable. You now go directly on Google to search for each product by name.
Surprisingly, only 70 percent of the products you are considering have a ranked web presence. Now, you are down to six options. For the other two that you couldn’t find online, that error just cost the homebuilder millions of pesos. You find the landing pages of the other six options, cool, more eye candy in the form of renders. OK, the location makes sense but where are the prices? Of the six options, all six have only general pricing, the oldest and poorest trick in the book: prices starting at $X.
This is such a lousy buying experience. With everything else you buy online, from today's tuna poke bowl with quinoa, to the car insurance (fun) you just renewed last week, to the new coral-green chair you bought with a 5 percent discount coupon, to your grocery shopping, for almost everything else, pricing is transparent and immediate and purchasing happens online. But not this, not the most important financial purchase and probably the most expensive purchase of your life. For the new home you want to buy, you can't even find the real prices online.
Getting Lost in Mountains of Information
From here, it unfortunately only goes downhill. You fill in the contact forms in four landing pages and book two online meetings from the other two websites. Out of the four contact forms, three take between one and two days to send you a ridiculous amount of generic information on WhatsApp: 24 renders, a price list on PDF, a generic, super-long message that takes up three screens on Whatsapp. This is not helping you. For some reason, you are just being buried under a mountain of irrelevant information. One other just simply never sends information. Even worse, of the two bookings you made, you received an automated calendar invite with a link for Zoom. Exciting! You show up but nobody shows up on the other side.
It's been a week and, so far, you have only a full list of prices for two projects, which are impossible to read and decipher, and also three desperate salespeople nagging you on WhatsApp daily. Something else has happened: your social media feed is now completely plastered with advertisements, all exclusive and luxurious presale projects. You wonder why they all look so generic and, again, why you can't find any information online.
There Should Be a Better Way
On average, you will spend 14 weeks to fill your excel with enough information to make a decision, you will have to click on 35 advertisements for projects, receive messages from 20 desperate salespeople and calls you didn't ask for from 15 of them. You will be on calls with 12 salespeople and you will only get quotes from eight of those. You will have to physically go to six projects, and finally, after 16 weeks, you will be able to relive the excitement of day one and reserve a new apartment to be delivered in 2024. You are happy but there is a lingering feeling. In 2022, there should be a better way to buy a new home.
This is the unfortunate reality of purchasing a new home in Latin America in 2022, from Mexico to Brazil. The residential development industry has been slow to embrace digitalization. For too long, not publishing pricing and forcing buyers to visit physically have been common practices in the industry. There is the misconception that educating clients scares them away. What real estate companies enable homebuyers to do online is shockingly reduced; for the most it boils down to filling in a contact form and passing that information to a salesperson to contact the client with no script or follow-up process. Less than 1 percent of new home projects allow users to select, price and quote a unit. While many homebuilders want to evolve, they have discovered that digitalizing their projects and enabling e-commerce for a real estate project is complex. Until now.
How It Will Be Tomorrow
At Alohome (www.alohome.io) we are happy to report that this is changing quickly. For the last year, we have been developing industry-leading technology for real estate companies to enable digital transactions for new homes, condos, and land. Now, customers can discover, select, customize, quote, and reserve a unit fully online. We built a full tech stack to enable digital home buying experiences that integrate inventory management, digital showrooms, and tools for homebuyers on an easy-to-use, cloud-based ecosystem. It is amazing that real estate developers across Latin America are now embracing technology at a new pace.
We are now working with real estate companies from Monterrey to Medellin, and soon we will be in Brazil and Chile. It's really exciting to see the high level of engagement that homebuyers have with online tools. Clients love to select a condo on their own, quote, return to the website multiple times, and either contact the sales teams when they are ready or go directly to reserve online. Furthermore, we are witnessing closing rates for sales teams increase through dedicated online tools. For the companies that embrace this digital transformation, the results are stellar. Also, early adopters always have an edge as they improve their process flows and business results with time.
The digitalization of the homebuyer's journey has just begun. We are so excited to see what the future will bring and to continue empowering the dreams of people buying their dream homes in the real world, but buying online.