A technology-driven solution to disrupt the residential real estate industry of existing homes

Thesis: S.M. in Engineering and Management, Massachusetts Institute of Technology, School of Engineering, System Design and Management Program, Engineering and Management Program, 2016.Cataloged from PDF version of thesis.Includes bibliographical references (pages 75-76).In the past, home buyers and sellers of existing residential homes relied on real estate agents to buy and sell a home. Real estate agents are experts at fulfilling consumers' needs and often gatekeepers of vital information required to buy or sell a home. However, with more information publically available online, consumers are increasingly turning to the internet as their first and primary source of information in their real estate searches. Given that the majority of real estate interests begin online and consumers are continually turning to a more self-service and self-reliant method of home buying and selling, the value proposition between a real estate agent and their client has diminished. Onlookers have been surprised by the seemingly resilient business model that is still in place within the real estate industry. Is it still justified for real estate agents to charge substantial commissions as the value they provide to their clients is arguably reduced by changing consumer behaviors? Several companies have tried to disrupt the industry with limited success. The thesis investigates why current companies have failed by first studying the underlying stakeholder needs and their top priorities under numerous macroeconomic conditions. Then, exogenous factors on the system boundary are researched to provide context and a holistic view of the industry in which a proposed system would exist. Following this, concepts are generated using an intra-industry morphological matrix approach. However, in the concept selection phase, the previous approach reveals significant gaps in unmet primary stakeholder needs using technology. As such, inter-industry morphological matrix techniques are used to refine and improve the solution. Finally, various pricing strategies are studied and an appropriate pricing architecture for the propose system is hypothesized. This thesis proposes a disruptive solution to empower consumers to move the residential real estate industry forward and redistribute value within the real estate ecosystem. The proposed system allows consumers to buy and sell their own homes using a pure technology-based solution developed using a systems approach. Overall, by utilizing a systems approach, all insights discovered would have otherwise been unknown. It is because of the use of relevant frameworks, that strong underlying system architecture could be designed into a solution that fulfills all the needs of the primary beneficial stakeholder using technology.by David Sung-Tat Chiu.S.M. in Engineering and Managemen