Dan Mugge from Calque: How Proptech Will Guide the Next Generation of Mortgage Lending

Dan Mugge

Dan Mugge is COO of Calque, Austin, Texas. He honed his expertise in strategy and development in the real estate and mortgage industries while working for companies such as First American, CoreLogic, Black Knight and ClosingCorp. He implemented three different process flows within Calque’s CRM that have generated consistency in engagement and automated manual processes. His efforts have enabled Calque to double its application volume without adding resources.

During the dot-com bubble, most tech and internet companies were highly overvalued. Optimism flourished among investors who were too distracted by market trends to question and vet these unrealistic metrics. Sound familiar?

During the pandemic, we saw similar behavior in our space with the proptech bubble. Proptech companies popped up to provide technological solutions aimed at redefining how property is bought, sold and managed (i.e., cash-offer products, remote touring and buying, calculators to assess which home improvement projects will have the best ROI, etc.). Eager investors, fueled by optimism from unprecedented home prices and market growth, poured capital into proptech companies to avoid missing out on the potential upside.

Just as we saw during the dot-com bubble, that pace of market growth couldn’t continue forever, and many proptech companies (and their valuations) are shrinking as a result. However, it’s important to note that the core value of their products remains and the market continues to evolve in their wake.

The Next Generation of Proptech

The use of the Internet continued to grow after the dot-com bubble, and great online companies and digital innovation grew along with it (at a more realistic pace). It will be no different with proptech. In fact, we are already seeing this prove out. Great proptech companies are growing, even in a drastically subdued market.

So what makes a proptech company great now that the initial wave of hype has passed? First, companies that provide efficiencies and create value for multiple parties will excel in a collaborative industry like real estate where you have consumers, agents, insurance, title, and lenders all working together to complete a transaction. Much of the initial proptech growth was focused on solving problems for one stakeholder (usually consumers), but the rise of proptech that benefits additional parties like mortgage lenders and agents will lead the way.

Secondly, proptech companies that strengthen what’s already working without creating new problems will overshadow early entrants that introduced bulkier solutions. For example, proptech companies offering ‘cash offer’ programs created duplicate home sales and extra work for agents in an attempt to address a very real consumer pain point – the stress of having to sell your current home before you can afford to buy the next one. In 2024, new solutions will eliminate the extra burden these products created and make the process better for all parties involved.

Here are just a few examples of how proptech is redefining the housing finance industry.

New Mortgage Products

Proptech enabled homebuyers to experience a completely different process of buying and selling over the last few years. And now, in 2024, loan officers and agents can feel the improved experience as well. For example, Calque works with established lenders so their loan officers can offer an in-house ‘buy before you sell’ experience that creates virtually no extra work for agents and is more cost-effective for consumers.

Predictive Analytics

Many successful proptech companies employ technology such as bots, artificial intelligence and machine learning to gain actionable insights for more efficient mortgage lending. For instance, Plunk provides predictive analytics tools using AI-powered algorithms that enable more precise market valuations. This helps mortgage lenders and agents become more nimble in the markets expected to see an increase in buying demand and access data-driven platforms that can augment their portfolio management.

Virtual Reality

Virtual Reality (VR) is revolutionizing the remote viewing of real estate listings by allowing potential buyers who live far away or can’t visit homes for other reasons to explore properties in a more realistic digital format than pictures. Companies like RealSpace, Atlas Bay VR, and iStaging offering real estate-specific VR can save buyers time and money. Buyers no longer have to travel to multiple properties, which can be a hassle and expensive. VR is still a relatively new technology, but it is quickly gaining traction in the real estate industry. As VR headsets become more affordable and accessible, it is likely that VR will become the standard for remote real estate viewing.

The Future is Networked

These are just a few examples of the next wave in proptech innovation, but the potential in the space is only limited by our imaginations and current capabilities. We expect optimism and steadier growth to return to the space now that the dust is settling from the pandemic boom and interest rate hikes. Opportunities for real estate agents and mortgage lenders to leverage proptech to enhance their clients’ home buying process (and their own) will grow through 2024 and beyond. Those who do will become market leaders right alongside their proptech partners.

(Views expressed in this article do not necessarily reflect policies of the Mortgage Bankers Association, nor do they connote an MBA endorsement of a specific company, product or service. MBA NewsLink welcomes your submissions. Inquiries can be sent to Editor Michael Tucker or Editorial Manager Anneliese Mahoney.)