Bigger and Better Data in the Real Estate Market

Has your real estate company made use of big data yet? Before you start using big data, you need to understand the basics of the term. Big data is not just a lot of data, but the complete technological environment where all the data is kept, executed, accessed, recovered, and shared. And all these operations are performed in a completely secure environment. 

This big data environment also includes the data that was abandoned because it was too unstructured. In usual cases, data that does not fit in the logical structures of the corporation is discarded. However, in a true big data environment, such data is broken down into smaller chunks so that it becomes easier to index. Data driven organizations of today are adding more and more to this domain, and every data bit like location information and consumer behavior becomes a part of this huge volume of data.

Using data analytics, real estate professionals can look beyond the obvious. These analytics are used to uncover hidden trends of property sale and purchase. Also, with these trends, behavior economics can be predicted more easily. Big data supporters have always supported analytics for their ability to uncover hidden patterns. These patters allow real estate professionals to create a more impressive marketing campaign. Big data has the ability to find consumer behaviors, whereas typical transactional data lacks this feature.

The Better Big Data Approach: Delegating Different Teams

Ideation is best left to folks who thrive on creative challenges. Usually, the ingenious thinkers, the convention-challenging risk takers are easily identifiable in a team. Along with your data manager, create a small team where such folks are assigned to carry on with experimentation. However, ensure proper reporting protocols are in place. Think of this as your innovation pipeline. Don’t expect this team to deliver from day one. You need to be patient and let innovation evolve. Soon, your innovation pipeline will feed your sales funnel and the ROI on your big data investments will put a smile on your face!

As a real estate business, you need a competitive advantage to flourish in an extremely fickle marketplace. With this objective in mind, get ready to embrace big data in its entire form—the defined and the explorative side. More than this being a big data strategy, it is about your mindset. Are you ready to allocate time and resources to outdo contenders or do you find safety in staying grounded even when the competition is closing-in?

Contemporary Big Data Trends

Ideally, data analysis should be done without bias. It is often seen that analytical teams are more predisposed towards analyzing consumer and marketing-related data. Data analysis should be handled by dedicated professionals who can handle systematically-indexed and random sets of data to derive meaningful information. Big data will take time to become omnipresent. More standards will slowly rise in this niche. However, as a real estate business, you cannot wait for standardization of big data. It is better to understand the current trends, start your big data journey, and be resourceful enough to help to shun visible pitfalls and build upon greater analytic insight.

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Time for Lenders to Adopt a Reasonableness Standard

Some regulatory actions and decisions taken by the federal government last year indicate that lenders will have to adopt industry standards if they want to comply with the guidelines and avoid hefty fines.

Recently an appeals court found that the origination process followed by countrywide was flawed. The jury went to the extent of saying that it amounted to fraud. The verdict landed Bank of America in trouble. The lender bought Countrywide in July 2008 just as the country was falling into a financial recession. Now Bank of America is being held liable for fraud over the deceptive mortgages sold by its countrywide unit during the housing boom. In fact, the US Department of Justice has already started pursuing claims against Bank of America and some of its top executives for the rapid mortgage approval process followed by the bank.

Bank of America has already resolved a large number of outstanding litigations with investors and the now the lender is focusing on settling the issues it has with enforcement agencies like the US Department of Justice.

What this means for lenders?

In recent times, mortgage regulators have taken action against lenders experiencing fast growth with the objective of ensuring that they have adequate infrastructure to support the growth. In particular, the regulators are interested in finding out whether the existing infrastructure is good enough to handle the volume of business the lender does. This is usually done by comparing one lender to another lender of similar business volume and size.

These actions seem to suggest that the regulators are trying to develop a generalized standard as against specific standards that need to be met.

Until now, lenders only had to fulfill specific requirements. This allowed them to compare their specific actions to certain specific standards and determine whether they were fair or not.

But now we are seeing the creation of a generalized 'reasonableness' standard that requires lenders to evaluate their performance on the basis of the procedures and processes adopted by their competition. This creates extra pressure on lenders to build adequate compliance infrastructures because just meeting the minimum statutory requirements will probably not be enough in the future.

In addition, when more and more lenders implement such practices to protect their customers and avoid defaults, it will put extra pressure on companies that lag behind their competition.

What this means is that lenders can no longer afford to be content with meeting the minimum regulatory requirements. Instead, they have to measure their performance against their competition and ensure that their compliance performance is satisfactory. They also need to review their conduct and business practices from a generalized 'reasonableness' perspective.

In other words, a lender's compliance will always be viewed in retrospective. This means that the lender should be able to predict and review possible outcomes and conclude that their practices are reasonable and that they are not engaging in fraudulent activities. This will not be possible if lenders do not keep themselves abreast of the happenings in their industry. They need to watch the developments in the marketplace and ensure that their actions are justifiable and mainstream.

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