In today's on-demand digital world, buying and selling a home remains stubbornly, painfully analog. Most sales still begin with a real estate agent (and a 6 percent commission). Most still end in an office, with the two sides signing page after page of legalese.
Silicon Valley wants to change that. Tech companies have begun to nibble away at the edges of the residential real estate industry, offering virtual open houses, digital closings and other services. Now they are coming straight for the real estate transaction itself through "instant buying," in which companies buy homes, perform some light maintenance and put them back on the market.
Established companies like Zillow and venture-backed upstarts like Opendoor and Offerpad have raised billions of dollars on the promise that they can use sophisticated algorithms to predict the value of individual homes. They contend that those predictions, combined with old-fashioned economies of scale, will allow them to be far more efficient than traditional home flippers.
The companies and their backers say they are doing what tech is best at: bringing efficiency and convenience to a process not known for either. Silicon Valley has already upended the way we hail a cab and order takeout, they argue. Why not improve a transaction that even well-educated professionals find intimidating?
"You should be able to sell a home within a handful of clicks," said Eric Wu, Opendoor's chief executive.
But houses are not taxicabs. A bad Uber ride might set a user back $20 and make her late for a meeting. A house is the largest asset for most Americans and the most expensive purchase they will ever make.