4 Ways How Does Fintech Change Real Estate (With Examples)

Written By Adrian Volenik

Fintech has penetrated almost all walks of life and real estate, in particular, has been affected by it in many ways. Although the process was well underway for years, the pandemic really accelerated digital marketplaces and other interesting technologies. 

Fintech is to finance and banking what proptech is to real estate. Both are challenging the status quo and are the driving force of real estate and financing digital transformation. 

Fintech is changing the real estate industry by helping reduce costs and friction, as well as increasing investment opportunities by digitilizing and automating the whole property evaluation and purchase process.

Let’s see how fintech and proptech are changing real estate one property at a time. 

How Does Fintech Change Real Estate

What is Fintech?

Financial technology or fintech is seeking to disrupt financial services using software and technology like big data, artificial intelligence, blockchain technology, machine learning, biometrics, cloud computing, e-commerce, and many others.

It’s shaking the cage of traditional banks, lenders, insurers, and any and all financially integrated institutions. Digital banking is the most obvious aspect of fintech, and there are hundreds of millions of people using fintech-led digital banking worldwide.  

What is Proptech?

Proptech uses the same software, technologies, and tools to do the same to the property and real estate markets. The way that fintech has changed the finance sector is the model for disrupting and fundamentally changing real estate. 

Proptech relies on both software and hardware and uses data virtualization, blockchain, open house management software, AI, and even 3D printing, to make managing, buying, and selling property easier.

Companies such as Airbnb, Zillow and Trulia, Redfin, and Homesnap in the US, and Rightmove and Zoopla in the UK are the best examples of proptech.

Types of Proptech

proptech illustration

There are basically two types of Proptech – residential property tech and commercial real estate (CRE) tech.

Residential Property Tech

This includes all the digital products developed to streamline the way people own or rent apartments and houses, and other properties. This includes short-term rental platforms like Airbnb, Vrbo, Hopper, Lyric, and others.

Residential proptech uses many tools to accomplish its goals. For example, property search platforms like listing websites and marketplaces, real estate agent tools, property sale and financing tools, software for loan applications and management, closing tools for insurance, as well as transaction and property management tools, and lastly, loan management systems that include loan securitization, and more.

READ ALSO: 5 Ways How Buy Now, Pay Later Make Money

Commercial Real Estate Technology (CRETech)

CRETech, which is short for Commercial Real Estate (CRE) technology and is also known as commercial property technology, includes all the ingenious modern tools companies and individual CRE professionals use to manage office, industrial, and retail properties. 

The best examples of CRETech are marketplaces for brokers LoopNet and Biproxi.

Commercial proptech also uses property search platforms like listing websites and marketplaces as well as brokerage CRM. Further, construction planning and management tools and evaluation and financing tools for transaction underwriting and management, debt financing platforms, etc., are also vital. 

Property management tools and especially asset utilization are last but not least.

How Does Fintech Change Real Estate Market

real estate market illustration

Fintech and proptech are two faces on the same coin, just as real estate and finance. We all know that real estate is the largest asset class, not only in the US but in the world.

Finance and banking are what enable people to buy real estate to live in, as an investment, or both. Almost all properties are bought or sold with the involvement of finance and banking. 

The lines between fintech and proptech are often so blurred that it’s impossible to distinguish them. I would argue that proptech is a part of fintech.

Fintech is, for now, more advanced in its journey of disruption, and proptech can learn from fintech’s actions, its mistakes, and its accomplishments. 

Fintech is laying the ground for proptech solutions and ideas that wouldn’t even be possible a couple of years ago.

Simplifying The Mortgage Process

mortgage process

If something needed modernizing and digitilizing when talking about real estate, it was definitely the whole mortgage process that was cumbersome and took a long time to complete at best and frustrating, tear-jerking, and even life-ruining at worst.  

By moving the whole mortgage process online, potential buyers are required to submit less paperwork, get better interest rates, complete the whole thing faster, and move in sooner. 

Digital and online lenders can charge less for their services because they have less overhead, which includes office space, employees, and related costs. It’s a win-win situation for both sides of the real estate deal. 

Fintech lenders reduce the time to process a loan by 10 days and refinancing by 15 days. Because most of the process is automated, fintech lenders are better at handling the higher volume of applications, and they lower their denial rates in such situations.

It’s a somewhat known fact that Hispanic and black mortgage applicants are denied mortgages more than their white counterparts. 

Fintech lenders, on the other hand, have lower denial rates for minorities than traditional lenders. Still not perfect, but it’s an improvement, nevertheless.  

Divvy Homes is a perfect example of a fintech company disrupting the old ways and helping unqualified customers climb the real estate ladder.

With this real estate fintech, people with poor credit scores can rent-to-own with a down payment of only 1% to 2% of the selling price. Divvy will pay for their home in cash and even cover all fees, closing costs, insurance, and taxes. 

Providing Real-Time Data

real time real estate data

For far too long, real estate firms have made decisions based on intuition and traditional retrospective data. However, today, in modern times, there are so many new variables that paint a picture of a property’s future risks and opportunities far better.

This slew of new and even very unconventional data sources is increasingly relevant. smartphone signal patterns, surveys, Yelp reviews of local restaurants, a change in the number of coffee shops in the area, the number of permits issued for swimming pools, and similar data help identify patterns and trends at the city block level. 

While an area’s crime rate or median age also informs long-term market projections.

Thousands of unconventional variables like these can be telling of diverging and very specific outcomes.

Risk Management 

risk management illustration

Risk management is the method of identifying, assessing, and handling perils to an organization’s capital and earnings. In real estate, that means determining, evaluating, and managing risks that arise from a variety of sources:

  • Financial apprehensions
  • Legal liabilities
  • Tech problems
  • Strategic management errors
  • Accidents 
  • Natural disasters

Thanks to big data and machine learning, real estate companies can now deal with more confidence with all but systemic risks (natural disasters). 

READ ALSO: 15 Reasons Why Businesses Should Open a Digital Banking Account

Automation And Cost Reduction 

automation illustration

Automation is a surefire way of reducing manual work, letting the AI and tools do more or all of the work. 

Modern buyers are now accustomed to digital and mobile platforms and have certain expectations from companies in all industries, real estate being definitely one of them. 

The more automated and streamlined the whole customer journey is, the more time and money both sides save. 

Fintech Real Estate Examples

1. Divvy Homes 


Rent-to-own has been around for decades, however, the previous versions were notoriously predatory, especially towards minorities. 

It really is a shame this model had a bad rep (and rightfully so) because it would allow more people to get on the property ladder if implemented properly. It allows people to save up for the down payment while living in the house they want to buy. 

Divvy Homes is one of the market leaders that’s changing the way Americans buy their homes. 

Divvy is rising exponentially as it closed more homes in 2021 than in the four previous years. 

In this digital version of the old rent-to-own model, the fintech buys homes for clients who can’t qualify for a mortgage. The company then becomes their landlord taking a 1-2% upfront fee with a portion of monthly rent that can be converted into a down payment. In three years, Divvy’s clients can build up as much as 10% equity.

The program is presently available across 16 major US metropolitan areas, including Atlanta, Cincinnati, Cleveland, Dallas, Denver, Ft Lauderdale, Houston, and Jacksonville. 

The company is backed by many well-known VCs such as Andreessen Horowitz, Caffeinated Capital, GGV Capital, Moore Specialty Credit, SciFi VC, and Tiger Global Management.

2. Opendoor Technologies 


Opendoor Technologies is a fintech company that buys and sells residential properties. It was founded in March 2014 by serial entrepreneurs Keith Rabois and Eric Wu, who previously founded Movity, a real-estate startup acquired by Trulia. Its headquarters are in San Francisco.

The company makes instant cash offers on homes via its online platform, makes repairs on bought real estate, and relists them for sale. Classic flip with an online twist.

Property owners bid to sell their properties on the online platform in a convenient process where, after a bid is accepted, Opendoor buys the property as-is and takes a fee similar to the commissions real estate agents take, but without the need for home showings. 

It’s extremely convenient for buyers as it’s a much faster and streamlined process of selling their homes. 

Zillow, another well-known tech real-estate marketplace company, which closed its iBuyer business, has joined forces with Opendoor to launch a new real estate mobile application.

Pairing Zillow’s audience and brand with Opendoor’s selling solution in one easy place makes it even easier to buy and finance their next home.

3. Cadre


Cadre is a fintech company out of New York that gives individuals and institutions direct access to large commercial properties. 

The service is often described as making the real estate market look like the stock market.  In conventional real estate, investment funds vest all decisions with a paid manager, and individual players can’t select transactions in which to participate. 

On the other hand, Cadre permits investors to determine what investments to make on a project or even building level. Cadre curates investment prospects and uses its digital platform to make these qualified possibilities available to investors. Making it easy for individual investors to buy a stake in any project.

Using its data analysis software and team, the company conducts diligence. In general, sellers can get higher speeds and lower fees as advantages if they use Cadre.


Fintech is disrupting all facets of our lives. Not only is it pushing everything online and making it digital from the ground up, but it is making it easier for sellers to sell their properties.

The buyers, on the other hand, can also avail of an easier loan process, however, they also need to compete with iBuyers, that are snapping up properties faster and for more money than they can.   

About the Author

Chief Editor at TopMobileBanks

Adrian is a fintech expert who has tested hundreds of financial apps, cards, and accounts. His love for testing digital banks, payment apps, and financial products, in general, is unmatched.

How many digital banking accounts can one man have?

Not enough, if you ask Adrian. As his wallet will soon explode if he doesn’t cut back on the number of cards.

On the plus side, they have enabled him to create awesome How-To Guides that you can read on our site.

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