Using data to learn and unlearn
It was a privilege to yesterday present at the Melbourne Business Analytics Conference, hosted by the Melbourne Business School. I spoke about the importance of using real-time, unique data and insights to optimise the settlement experience for all stakeholders involved in a property transaction, most importantly home buyers and sellers.
PEXA has adopted a new Settled First Date (SFD) metric to measure the performance of lenders and practitioners involved in settling property sales on their scheduled day. This new metric is a significant step forward towards ensuring the industry is working together to deliver for the most important stakeholders in a property transaction – the buyer and seller.
More than 20,000 families rely on PEXA every week. In early 2022, we identified an opportunity to further learn and unlearn processes and systems to enhance settlement certainty for home buyers and sellers. PEXA observed settlements had an approximate 70% success rate, and although this is a strong number when compared to global standards, we led research into how the industry could improve.
We found that of the settlements that did not complete on the day as originally planned, we saw many instances of when the buyer and seller agreed to move the settlement date. However, we also observed the following opportunities to improve:
- 24% were due to operational delays (i.e. issues picked up at final inspection)
- 16% were due to document delays (i.e. buyer and/or seller forgetting to submit paperwork on time).
- 13% were due to complex delays (i.e. a home is attached to a small business, with financial links/collateral)
- 7% were due to funding issues (i.e. financial discrepancies such as miscalculation of water rates).
PEXA shared our research with industry, and together we developed a program comprising four streams of work, driven by data and insights. We also looked at behaviour insights, industry best practice and platform enhancements.
Where to from here?
PEXA believes open and transparent information to the market, based on the above insights, will deliver a better experience for all. In order to measure the on-time settlement performance of participants involved in the settlement process, PEXA has developed a metric called Settled First Date (SFD). This metric, which will be publicly reported quarterly, and has been used to assess the performance of both lenders and practitioners (with practitioners being property lawyers or conveyancers acting on behalf of buyers and sellers).
Pleasingly, we have already seen a very positive uplift. As a result of strong industry collaboration, more than 30,000 more home buyers were able to get into their property
on time during FY22. Getting this important process right is in the best interests of all stakeholders within the property eco-system to get people into their homes on time.
PEXA will continue to learn and unlearn systems, processes and behaviours to further shape improvements for the industry and home buyers and sellers.
To read more about the public report please visit our PEXA’s collection of data and insights
Please feel free to reach out directly with any questions.
Chief Marketing and Financial Institutions Officer