Mortgage Media’s Suresh Ramakrishnan had the opportunity to talk with Chris Heller, Chief Real Estate Officer at OJO Labs. Heller, who was previously CEO of mellohome and CEO of Keller Williams Realty International, discusses how artificial intelligence is changing the consumer home buying experience and impacting the mortgage industry.
Suresh Ramakrishnan: This is Suresh Ramakrishnan of Mortgage Media. I’m very pleased to be speaking this morning with Chris Heller. We last spoke with you in October 2018 just as you were joining mello home. Thank you for joining us as we start a new decade. Chris, you recently joined OJO Labs. With your deep background in the real estate business first leading Keller Williams and then leading mello home, what led you to OJO?
Chris Heller: Thank you Suresh! I’m a big fan of Mortgage Media and of SA (Ibrahim) and Tom (Wilkins). I appreciate you reaching out to speak with me. I have been in the real estate field for most if not all of my career. I like taking on new challenges. I’ve known OJO and its founders for several years and I was, in fact, on their board. I have been following them at Keller and at mello home and I saw that they would have enough going on to where they could use my help. And I also saw that at the stage they were at, there were a lot of things that I knew I could contribute. It’s really important to me to be able to know that I’m contributing in a meaningful way on a daily basis. Having joined OJO back in July, I’ve been able to do that, so it’s been a lot of fun.
Ramakrishnan: Didn’t LoanDepot, a couple of years ago, have a partnership with OJO as well?
Heller: It wasn’t really a partnership. It was a small short term test. It was before I joined LoanDepot, and I actually introduced the two companies together. It was sort of a beta test they did and then it was still going on when I got there, but we wound it down. The reality of it is neither side had the resources to really put the right effort into it to make it work, and it was becoming just a distraction, I think, on both ends.
Ramakrishnan: Okay, because I remember reading something about it.
Ramakrishnan: How is it now working in a startup environment? You’ve been at larger companies and LoanDepot is now 10 years old, so I guess it’s now a well established company, relatively speaking. How was it going from that to a startup environment? They’re different kinds of energies?
Heller: Yes, mellohome was certainly a startup. But when you’re launching a startup within a larger organization, it’s different. There are some pros and cons. It’s nice to have all the resources of the larger organization to be able to draw upon, and at the same time that also can slow things down a bit, or there’s not unlimited resources, so you’re competing for those resources.
At OJO, which is a true startup, it’s exciting. Every day is filled with things that look like they could be a disaster for the company, and at the same time look like they could be a huge, huge opportunity. It’s certainly not for the faint of heart, but that’s okay, because I like those types of challenges and problem solving, and just generally being productive, or in a productive environment. We certainly have that here.
Ramakrishnan: In reading about OJO, there’s a lot of talk about using a conversational AI assistant to facilitate the real estate process. Given your experience at Keller, and I know OJO has investors like Realogy and others, how does that process work and what is OJO trying to do within that real estate space?
Heller: What we want to do is become a trusted advisor for consumers. When they have real estate questions, they can easily get them answered without having to engage with a human being when they’re not ready to engage. And to be able to get information on properties and other real estate questions. For us as consumers, there’s two things we all universally find annoying and that is having to talk to someone when you don’t want to talk to someone and not being able to talk to someone when you do want to talk to someone.
At OJO, we’re trying to bridge that gap for people, so when they do have questions, they can just do a simple SMS interaction with OJO and get their questions answered. If they are at the point where they want to see a property or start the buying process, then we have the ability to connect them with a great agent. Or if they need a loan, we connect them with a great loan officer to help them do that. It’s really a consumer first approach, but at the same time, especially at this early phase of the company, we’re dealing a lot with the mortgage and the real estate industry.
Ramakrishnan: Your customer, if you will, is the mortgage or real estate firm and your end-user if you will, is the borrower/buyer, is that the model?
Heller: Actually, you can almost say it the other way around, that might be more accurate. We view the consumer, the buyer/seller as our customer and that’s who we design for. So, we have a couple of large enterprise deals and you mentioned some of our investors, but I’ll give you an example, a practical example of what we do with Realogy, who is one of our partners.
Realogy has consumers that are inquiring about properties on one of their websites and those inquiries come to OJO, and then OJO is able to communicate with that consumer, take that person that may not be ready to transact right now. If they are ready to transact right now, or need to engage with an agent, then we’re able to, via just a live transfer, connect them with an agent, a Realogy agent, that can help them either gain access to the property that they were inquiring about or they are able to start the process of buying a home.
If they’re not ready, which is often the case when people are just browsing online, we’re able to engage with that consumer in a meaningful and valuable way for them, because we’re able to share real estate listings with them. We have MLS access, to all the MLSs and all the listings, we’re able to answer their questions, and the type of questions that they can’t get answered easily elsewhere. If I go on to a portal, I’m able to find out how many bedrooms and baths, or the price or the address of something. But I can’t really, unless I talk to the listing agent, I can’t find out questions or answers to questions like, is there a view from the upstairs, is the backyard private, is there…
Ramakrishnan: Is there a fence in the backyard?
Heller: Yes, and those types of things. Through OJO, people are able to ask those questions and get answers, which people enjoy. Earlier this morning, for some reason I woke up thinking about, there’s two retail, one restaurant chain and a store that I frequent a lot, and there was a thing about each one of them that I wish they had. I went onto their website and it was really hard to find a place to make a request or put a comment in.
In fact, one of them I just had to call and talk to a live human, which I really didn’t want to do, I just wanted to send a quick note and say, “Hey, I’d love it if you guys had this or did this.” OJO allows consumers to be able to do that, and again, not have to interact with a human when someone’s not ready to,or doesn’t really want to.
Ramakrishnan: One thing that I was thinking when you mentioned the specific example, how is it that you guys at OJO are able to get that level of information, whether there’s a view from the backyard, those kinds of things. Is that the data from WolfNet Technologies, which has all the real estate data? Is that one of the reasons for the acquisition, because it had all that data, that you can make it useful?
Heller: That was definitely one of the reasons for the acquisition of WolfNet, but WolfNet’s data isn’t all encompassing. We have all the MLS data and if that information was in the MLS, then we could access it. What we do is one of our offices is on the Island of Saint Lucia and in that office, we have several different roles, about 200 employees. A chunk of them are what we call our AITs, our AI trainers.
They spend the day and night, they’re there 24/7 doing everything from tagging photos so that the machine, so that OJO learns through photo recognition. If someone says, “Hey, can you show me more properties with white kitchens or with great granite countertops” we’re able to do that. They also are tagging phrases and words and constantly teaching the machine. If OJO gets asked a question that it doesn’t know the answer to, that question immediately goes to one of our AI trainers and then they’ll access the listing, see if there’s comments in there that may have the answer to the question. If not, they even have the ability to quickly text a message to the listing agent and say, “Hey, this is Chris from OJO, we have a consumer that wanted to know if your listing on 123 anywhere street, had a view from the upstairs bedrooms.”
Agents are always willing to answer questions about their listings and help out. We get the answer, then we’re able to send that answer, OJO’s been able to then give that answer back to the consumer and help them with whatever their next question or request might be.
Ramakrishnan: That is very impressive to be able to get that level of granular detail without having to speak to a realtor as you’re trying to evaluate properties, that’s one of your important considerations, to have that answer before you go and see the property could be very valuable.
Heller: Yes, there’s a lot of times, like I do it, I’m online looking at properties and there’s a lot of times I want to know more about it, but if I have an agent I may not want to bother them with a quick question. If I don’t have an agent, I may not be ready to engage with someone else who’s then going to be trying to sell me or ask me lots of questions that I just am not ready to engage with.
Ramakrishnan: Right, now how does this technology help within the mortgage environment? You had mentioned mortgage lenders as being involved in this equation as well. How would that work?
Heller: We have a lot of consumers that are looking at properties, or asking questions and as OJO communicates with them, we’re able to ask questions like, “Where are you at in your process, have you had a chance to get pre-qualified, would you like to be connected to the source that could help you do that?”
I just saw an example yesterday where a consumer said, “I don’t want to start looking at homes until I know what my interest rate is going to be.” We’re able then to connect them with the mortgage industry to get those questions and needs met.
Ramakrishnan: Okay, so it’s not quite the AI piece to it, at least right now, as it is on the real estate side, relative to the mortgage side yet.
Heller: Exactly, yes. It’s more to the actual in the process of getting a mortgage to purchase a home or to refinance their home. We’re there to enable them to make that connection.
Ramakrishnan: Okay, now you’ve seen, between Keller and then at mellohome, a lot of new technologies being used in the real estate business. How do you think this artificial intelligence, and machine learning, is going to change the real estate business, the realtor through the lender and beyond? Do you have a view on that as to how this technology is going to change things?
Heller: Yes, I think it will change things. I think there’s several use cases or examples. When I think about what we’re doing at OJO, there’s a lot of things that agents do that machines can do, and there’s a lot of things that agents do that machines can’t do. But AI and AI being deployed in the real estate industry, it creates the opportunity for the machine to not only interact with consumers and give them the information they need, so that the agent can focus their time on live interactions and in doing the things, the true consulting and hand holding and all the things that a buyer might need. It has the ability to augment or save time for the agent or the loan officer.
I think as we see this technology continue to develop, it will allow professionals in the industry to save time, to maybe change some of what they spend their time on, or not do certain things that they’ve been doing and then refocus that time and energy in other areas. Whether it’s customer acquisition or just the consumer service side of the business. In the mortgage industry, we’re already seeing companies that are leveraging AI when it comes to accessing data and using the machine to assess risk, to assess-
Ramakrishnan: Risk profile.
Heller: Yes, risk profiles – to assess the proclivity of someone’s ability to perform, or a predictive view of someone’s likelihood to refinance, or to make a move, and that’ll continue to evolve and become more and more accurate over time.
Ramakrishnan: I guess if I’m reading it correctly, it enables the realtor or the mortgage lender to focus more on the warm and fuzzy side of customer support and really helping the customer or answering questions as opposed to just the mundane.
Heller: Yes, I think that’s certainly one aspect of it. But if we look back in the last decade or the decade before that, the real estate or mortgage professional was sort of the keeper of the information. As a consumer, if I need that information, I had to go through that person. Well, that information now is more and more and will continue to be more and more readily available. I’m not necessarily going to an agent to find a property or to see a property, because I can do that all night long, but the things I need are the local expertise.
I think about the use case of you or I relocating to a new city. We could research to our heart’s content on that new city and everything about it, and we can look at properties and see properties that were appealing and everything else, but if it’s a city we never really lived in before, aren’t that familiar with, the only way to really understand the different neighborhoods and the traffic patterns and the impact of different school districts and all those things is to talk to someone who has that deep knowledge. The best agents have that type of knowledge and experience.
The best loan officers have the ability to make suggestions and say, “Hey, here’s a better way for you to go” or, “I’m going to suggest that you look at this type of program.” The top agents, the top loan officers will always have a role in the buying and selling and financing process. For the agents and lenders that don’t do a great job, as consumers we’ll be looking elsewhere for our needs to be met and technology will certainly be one of the places where some of those needs will be met.
Ramakrishnan: It’s certainly looking like the trends, or the speed at which this is changing is getting faster, and I guess will over the next couple of years. Given all that, what is your view on the real estate and the mortgage industry in 2020? Because you’ve seen, at least I’ve seen, I was listening to a First American led webinar yesterday, which talked about the future of the real estate industry and they expected inventories to be short. What is your view, in light of all these technological changes, et cetera, for this year and beyond?
Heller: Well, I can answer that from a couple of different perspectives. From a consumer’s perspective, I think 2020 will be another strong year in the market. Whether I’m looking to buy, sell, refinance, all those opportunities are here in 2020 and will continue to be here. Most markets are still moving in a positive direction with positive appreciation. Certainly,in some markets, inventory is still a challenge where other markets it’s become a little more balanced, from an inventory or from a supply and demand standpoint.
On the mortgage side we still have great rates, which keeps the purchase market active and also creates continued refinance opportunities. I think 2020 is going to be another strong year for the industry, so that’s from a consumer’s perspective. From a practitioner’s perspective, as technology continues to evolve, as consumer behavior continues to cause us to have higher expectations as consumers, I think the professionals are going to continue to be stretched to keep up with those expectations and to constantly be looking at ways where they can meet and exceed the consumer’s expectations.
Ramakrishnan: I guess as you start meeting more and more of consumer expectations, the expectations would increase because you think that more can be done, because what you could expect before has now changed. The dynamic, I guess, keeps changing, so that outlook as to what you can expect as a consumer is also increasing.
Heller: Absolutely, I mean, if you or I are going online to purchase something today, our expectations are so high thanks to Amazon. I can go on Amazon and in a click I can buy something or in a click I can return something. If I have to go to a site that I haven’t been to before to buy something and I have to put in my contact information and my credit card information, it seems like a tremendous hassle. Whereas a few years ago that was the norm, now it’s like, “Well, gosh, why don’t they have this information already? Why do I have to provide… “
Ramakrishnan: Yes, that’s what I mean, our expectations as consumers seems to evolve as new technology evolves, because what you thought was a baseline is no longer the baseline, your baseline is 20 yards ahead now because things have changed.
Ramakrishnan: I guess that’s the challenge for companies like OJO and others to sort of keep ahead of the curve because the curve keeps going further and further ahead.
Ramakrishnan: Finally, one of the things that you had mentioned in your interview with SA (Ibrahim) a couple of years ago was when you were asked about what you like to do for leisure and you said work. You’re a workaholic. Now that OJO is based in Austin and you have a penchant for music, Austin City Limits, Coachella, all that is still in the calendar?
Heller: Absolutely. I was telling my wife this morning, I bought concert tickets for a show here on the 14th of February, and we then subsequently booked a trip to go visit my daughter and I said, “I’m really bummed I’m going to be missing that show.” I don’t remember telling SA I was a workaholic, I think I said I liked to work.
Ramakrishnan: You said you enjoyed work.
Heller: I enjoy work and I work a lot. Maybe to some people that might look like a workaholic. I love any physical activity and I do love music, so I’m in a good place, and I still have my place in San Diego.
Ramakrishnan: Do you now live in Austin for the most part?
Heller: I live in Austin most of the time, I get back to San Diego about once a month.
Ramakrishnan: Okay, that’s not a bad alternative to be at.
Heller: No, I’m very blessed to have two great places to spend time.
Ramakrishnan: Excellent, well, thank you so much, Chris it was great speaking with you and all the best to you at OJO as you get into the next chapter, it certainly sounds very exciting.
Heller: Suresh, it’s been my pleasure, thank you.
Content has been edited for length and grammar.