The property market is about to be turned on its head, making both sellers and buyers winners. The Schibsted company Livvin is creating the property platform of the future.
Livvin is a user-driven property network offering property owners a simple, non-binding and free service to notify the market about WHEN they plan to sell their home. Livvin.com puts homeowners and homebuyers in direct contact with each other. Think of it as a LinkedIn service for property. Bergens Tidende (BT) has made the initial investment in the Livvin project, which is operated in close cooperation with Stavanger Aftenblad's development company BetaVest.
'Livvin has built a platform that be scaled globally from day one, and we have ambitions to take it beyond Norway. Through cooperation with other Schibsted companies, Livvin will secure Schibsted a solid foothold in tomorrow's property market,' says general manager Karsten Refsdal.
Technology is gradually challenging more parts of the value chain in many industries, more often in favour of the consumer but at the expense of established actors. At Livvin, the thinking is that the private property market is next on the list.
The story is a familiar one: established actors are asleep at the wheel, too slow to react, and are outrun by flexible startups with superior technology and the ability to put the user first. There are plenty of examples:
Spotify, Netflix and Popcorn Time have all given the music and film industry headaches. Facebook has turned proud and long-established media houses into content suppliers. Lyft and Uber (and the new Norwegian startup Mivai) have made life simpler for taxi customers, regardless of how much politicians and the taxi industry drag their heels. AirBnB is delivering more overnight stays that the big hotel chains combined.
New industries and old giants are under threat: 'health tech' is this year's buzzword, with a record-breaking year for investments. Anyone want to test their DNA in the comfort of their own home? Kryptovaluta and decentralized banking and financial services must be every bank manager's idea of a bad dream.
The list goes on, but the point is that technology is making life easer for consumers. and is something which vested interests cannot resist over time.
The property market: the consumer is ready to move to the next level
The property market has remained relatively unaffected so far, but we believe this will change in the course of 2016. In the short term, we believe technology will challenge three parts of the property transaction:
Today, pricing is usually taken care of by valuers and estate agents, who provide price estimates based on their own experience and price histories in the area.
In future, we believe that price algorithms will be able to deliver high-quality and reliable price estimates for most properties in Norway. Increasingly better and faster access to price histories and public data are enabling actors who use services like Ambita to take over the role of today's valuers and estate agents. Several actors, both domestic and international, are already working on this, and we believe that homeowners will soon have access to services providing precise real-time pricing of their own homes.
Of course, some properties will still require the services of a valuer to obtain an optimal price estimate, but in most cases we believe that price algorithms will deliver estimates that meet legal requirements that are sufficient for property buyers and sellers and for financial institutions looking to secure their loans. For consumers, this will mean lower costs associated with buying and selling their home.
2. Finding the right buyer
Today, homeowners looking to sell their property engage estate agents to help them find the right buyer. Potential buyers are attracted through a combination of advertising in newspapers, online channels and on estate agents' own listings. Interested parties are invited to viewings that often last under an hour. The next day, the bidding begins.
As seller, you (of course) have an estate agent who wants to achieve the highest possible price on your behalf but who at the same time wants get your home sold as fast as possible so that he can move on to his next project.
As buyer, you are about to make one of the biggest investments of your life, and you try to form an opinion of whether the property actually meets the criteria for your dream home before the bidding starts.
A situation where large sums of money are at stake and where all the parties involved in the transaction are under time pressure is not an ideal one. In our opinion, it is a risky one for both buyer and seller; suddenly you've spent a few million, just like that.
In future we believe that technology- and data-driven services will enable homeowners to find the right buyer themselves by using time to their advantage. We believe that homeowners will always be a part of the market and will always have an idea of who would be interested in buying their property.
Just as LinkedIn has brought a larger section of Norway's labour force to the attention of employers, one or more actors will enable homeowners to bring their property to the attention of potential buyers.
3. The legal transaction
Today the legal transaction of changing home ownership is mostly handled by estate agents or legal practitioners. Today property buyers and sellers and estate agents/legal practitioners hold a meeting to review agreements/contracts and sign the relevant documents.
While this is process is organized and reassuring, we believe that this part of the transaction will also be simplified and made far less intimidating to handle directly than is the case today. We therefore believe that property owners and sellers till handle more of this process directly without going through expensive intermediaries.
What role will Livvin play in tomorrow's property market?
Livvin wants to put homeowners in the driver's seat.
Livvin was started because we saw a need for homeowners to have a simpler way (it only takes around 30 seconds on their mobile phone) to alert the market about when they plan to sell their home to avoid the risk of their ideal buyer buying the neighbour's house three months earlier.
By informing the market that a property will be coming up for sale in six months, a year, even five years, will make it easier for the seller to find the right buyer and, likewise, for the buyer to search for and find his dream home.
If Livvin succeeds, we may see growth in a property market where rushed viewings are replaced by relaxing home visits, where panic-driven bidding rounds are replaced by rational discussions, and where many expensive intermediaries are replaced by sound, intuitive and secure self-service solutions.
To find out more about Livvin, contact Karsten Refsdal, General Manager of Livvin.no.