PRICE TAG ON WHERE YOUR

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PRICE TAG ON WHERE YOUR

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Service design diploma project // Spring 2020 The Oslo School of Architecture and Design Elena Wong & Xinglin Gao

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I.

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Introduction II.

Research and Define

1. Abstract 2. Personal motivation

3. Project timeline

1. Understanding the context

/ Project background / In-depth research

2. Define and synthesis

/ Synthesis approach / Directions

/ Initial brief

3. Further research and analysis

/ Under the iceberg - What created the power dynamic / Insights

/ Define design opportunities / How do we promote power dynamic shift

Put a price

tag on where your heart is

Service design diploma project

The Oslo School of Architecture and Design Elena Wong & Xinglin Gao

Spring 2020

An exploration in promoting power dynamic shift within Norwegian home buying process through service design

Main supervisor

Ted Mattrews

Second supervisor

Simon Clatworthy

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III.

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Explore and Ideate

1. Ideation

/ Ideate on 3 levels

/ Internal ideation workshop / Co-creation Workshop 1 / Co-creation Workshop 2

2. Ideas gallery

/ Ideas overview

/ Experience enhancement / Service innovation / Radical changes

3. Experiment on ideas and learnings from it

/ Crash test our ideas / Learning from testing / Moving ideas forward

1. Idea development

/ 01 Information / 02 Tools / 03 Consultation / 04 Action petition / 05 Awareness campaign

2. Concept

/ Ideas to promote power dynamic shift

/ Our design proposal and further exploration

IV. Design and Develop

V. Deliverables VI.

Conclusion

1. Design proposal - Combine as one

/ Service definition

/ Service principles and identity

2. Husro - service offerings

/ Offering map / Main offerings

3. Husro - How does it work

/ Service experience moments / Funding the service

4. Further

exploration - Break and fit

1. Overall feedbacks 2. Conclusion and reflections

3. References

4. Acknowledgements

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I. Introduction

This chapter covers an executive summary and the project timeline of our whole project, with our personal motivation in choosing this topic at the beginning.

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Executive summary

Project background

Norwegian real estate industry is at its mature stage with well-developed law and regulations. Norway has the highest rate of home ownership (81.3% in 2018) compared to other countries in Europe area while mortgage interest is a deductible item on income tax returns which encourages home ownership.

Initial research & brief

We believe the current situation has to be changed and ideally the home buying system should consider benefits and rights of both buying and selling sides. We frame our initial brief as “How might we shift home buying journey from seller-oriented to equal for both sides, so buyers might get more support and their journey towards home ownership would be a bit smoother?”

Project goal

Our project goal is by developing services that would support home buyers in their journey to home ownership, in hope to disrupt the existing power dynamic in residential home buying system.

Further research and analyze

From initial research, we see imbalance power dynamic in home buying system, buyers feel passive and powerless in buying process. However, home buying is one of the biggest investment in people’s life, but the reality is people have more time to examine a kitchen appliances than a property - which doesn’t make sense. If home buyers were still powerless in a seller/owner oriented buying process and being pushed to do purchase decision under stress, it is unlikely that home buyers would be able to make a rational and informed decision and instead they could feel remorse towards their decision making.

I. Introduction

In further research, by using iceberg model, we analysed what makes current power dynamic and wants to find underlying reasons that are embedded within the system.

We summarised our findings into five insights:

• Heated housing market makes buyers tends to stress buy

• Trusted actors who can support home buyers are less visible in home buying system

• Buyers consider home buying is a simple process and overlook frustrations they could encounter in the process

• Buyers never question current system, and consider it’s normal as it is, at the same time seller and buyers are interchanging positions which promoting help for buying process could benefit both sides

• Current legislation set up home buying journey, some events happening in buying process cause anxiety and frustrations for buyers.

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Design proposal: Combine as one

Our design proposal is creating a new independent service - Husro, which is a home buying help service portal offering information, tools and services tailored towards home buyers’ need.

Main service offerings

Husro Self-starter:

A service portal with trusted and useful ‘home buying information’ and ‘home buying tools’ that buyers can use for guiding themselves in home buying journey, thus better plan out their buying journey to be more prepared and confident in buying process.

Home buying information (archive) tackles at the problem of scattered information and home buyer’s distrust towards certain information providers.

‘Home buying tools’ tackles the problem of buyers lack of guidiances now to better organize their buying journey which buyers with less experience might not know what to look at.

Husro Consultation:

A service request portal helps home buyer to identify their need and bridges them with home buying consultation service providers. It tackles the problem where home buyers lack professional knowledge to support them through their buying journey, at the same time they suffer from the inadequate awareness of seeking professional instructions - either might not know they could seek professional help, or not knowing what they could seek help on and who they could seek help from.

Advocacy generating: driving systematic changes

#Normalwasn’tNormal awareness campaign:

A campaign aims to shift general thinking towards home buying from

‘We don’t question the structure, everything is normal. It is what it is.’ to ‘Normal wasn’t normal. We need to change, and you can be a part of it.’ It is designed to make home buyers aware of the imbalanced power dynamic in the current situation, thus drive them towards the future where issues within this field is being seen by general public and raise their demand towards it through petition or other channels.

Actions Petition:

A platform for home buyers to gather and express demand on radical changes, then Husro create petitions and channel their voice to relevant government agencies or NGOs to drive systematic changes, thus create a better future which balances the benefits and rights of both home buyers and sellers.

I. Introduction

EXECUTIVE SUMMARY

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Further exploration: Break and fit

Our second proposal is breaking the ideas and offerings of Husro and explore the possibility of fitting them into other services providers’ offerings. This proposal is to explore the scenarios of introducing interventions into existing landscape so we could compare and reflect on the two proposals. We explored how would the service look like if it is fit into:

1. Realtor service provider, 2. NGO

3. Government agency.

Realtor service provider - Krogsveen

They have the resources of home buying consultants, in-house design team and an existing digital platform. By intergrating the two offerings ‘gathering trusted information and home buying tools’ into their service offerings on their digital site, Krogsveen could increase visibility and reach potential customers, providing free resources as a bridge to their consultation service offerings.

NGO - Huseierne

Huseierne is very active in providing services and support to home owners and their members, while actively advising the government in promoting legislative changes. As a home owner’s association supporting home owners, expanding its service to supporting their member’s home buying journey would be a way to attract potential members that are joining from their first purchase stage.

Government agency - Forbrukerrådet

The Norwegian consumer council is providing digital services and support, consultation and advising the government on consumer policy related issues, which includes the housing sector as well. By integrating services of providing

‘home buying tools’ and ‘action petition’, consumer council could expand on their digital services to home buying consumers and get in touch with consumers they serve directly thus their effort would be visible to the ones they serve.

Conclusion and reflection on our design proposal and further exploration

Due to our approach as an explorative project, it was very challenging to identify the enablers for our proposal. We developed with the ‘combine as one’

proposal as ‘Husro’ as an independent service which could work in its ideal scenario, while using the ‘break and fit’ approach to explore on potential service providers - both have its own pros and cons. As a MVP, we would love our design solutions, especially ‘Home buying tools’, to reach the home buyers it was designed for, and help as many as possible. As such, our priority would be the existing distribution channels that could reach as many of the target users as possible and make it accessible to everyone - which would need furhter contact with potential enablers on how it could be done practically.

EXECUTIVE SUMMARY I. Introduction

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Personal motivation

Topic is relevant for us and everyone

One fact particularly interested us is the extremely high home ownership rate in Norway, which is uncommon in wealthier countries. This makes it become a topic that is relevant to everyone here living in Norway from a functional perspective, and also it is a very important concept on the emotional perspective.

Home is a multi-dimensional concept

Home is an important concept that shared globally between everyone, no matter race, income, religion or beliefs. There is always no official definition for home, everyone has their own understanding of home. Home can be your childhood roots.

Home can be the house you grew up in and memories that live with people you love.

It can be the physical place you reside and the community it bestows.

Homes are highly complex things: social, symbolic, economic, psychological and legal entities - among much else.

Service design project by explorative approach with an open brief

We begin with a potential collaboration with a new service provider in this field, then we decided to open up the brief a little more as a explorative project on our own which allows us to expand our research, explore and take decisions based purely on research outcome. It has been both a challenge and an opportunity to us to work without a pre-set enabler/ service provider, but also it allows us to lead our last project in our master studies to the direction we would like to.

Challenging yet interesting

From our personal experience and cultural background from our hometown, owning the home is an important milestone in life which associate with a person’s walk in life, social status and so on. From the holistic system perspective, housing associates with politics, welfare etc. It is an extremely interesting and challenging topic for us by itself as it is a complex concept tied in with values, beliefs and systems.

Another challenge for us is we chose to dig into the Norwegian housing market which we both had no prior experience on and we are both not from this country - which means we would need to put more effort into background research than locals which might had connections or experience in. We were very excited to take on the challenge and explore on the field that is new to us.

I. Introduction

Home is a space and a concept that everyone emotionally connected to

Romanticism is closer than physical place in defining the answer to home, because home is really an emotional concept, when talking about home, everyone has their own imagination. Home is not only about the place, also about whom you live with, and stories happening in that place.

Home is where you feel safe and protected

According to Maslow’s hierarchy of needs (1943) where sense of security is what a home is serving. Home is the place where you feel in control and properly oriented in space and time; it is a predictable and secure place.

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II. Research and Define

This chapter is about what we did in the research phase using primary and secondary research methodologies, taking a qualitative and design research driven approach in exploring and understanding the whole landscape of Norwegian housing market, and then refine the brief by ourselves based on the insights we uncovered. After we settled on our initial brief, we did further research and analysis on the topic to decode the current situation, defining design opportunities which later feeds into design and facilitate co-creation of ideas with target users.

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Part 1: Understanding

the context

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Project background Explorative project

with open brief

Well-established, secure and transparent market

Norwegian real estate industry is at its mature stage with well-developed law and regulations. The ‘Avhendingsloven’

has been created to grant sellers and buyers a comprehensive safety net.

Moreover, there are separate regulations

‘Eiendomsmeglingsloven’ indicating legally, how a real estate agent should sell a property, which ensures the market transparency and safety. All sales of housing is protected by ‘Avhendingsloven’

including private sales and sales through realtors, while practice of sales through real estate agents are even further restricted by

‘Eiendomsmeglingsloven’.

Our project started as an explorative project with open brief. We kept it open for us to explore and understand the whole landscape of home ownership and its transferral journey, adopting design research as methodology to identify project directions with potential to work on further and refine it into our brief later.

Growing and strong market

Norway has the strong real estate market with significant potential and opportunities.

The transactions volume in 2019 is the second highest among last 10 years, and a 19% increase is being recorded in the residential segment of the real estate equity market. (Pangea Property Partners KB and Pangea Property Partners AS, 2019)

“Through both 2018 and 2019 the housing market has been stable with a large supply side and many transactions. We expect this trend to continue in 2020. “ says CEO Christian Vammervold Dreyer og Real Estate Norway.

“The most important drivers in the Norwegian housing market are stable. The Norwegian economy is doing well, which contributes to a stable labor market and solid wage growth. Housing construction is well adapted to household growth, and at the same time, several credit regulations have contributed to reduced purchasing power.“ says Dreyer.

II. Research and Define | Part 1: Understanding the context

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Scope: Home ownership and transferral processes

High home ownership rate in Norway

According to statistics from

Tradingeconomics, Norway has the highest rate of home ownership (81.3% in 2018) compared to other countries in

Europe area. Moreover, mortgage interest is a deductible item on income tax returns in Norway which encourages home ownership.

Owning is a social norm in Norway (Buying is the goal)

Home-ownership is a social norm and being a home-owner is associated with social status as well. This social norm benefits owners, which makes more owner believe owning is normal and good.

In Norway, people are obsessed with owning their home, while renting is more common in the rest of wealthier countries in Europe. In our research, people described they are ‘forced’ to rent due to their financial situation. Home- buying is one of the most discussed topic in workplaces as described by our intervieweess “Everyone has their own home buying story to tell.”

My father thinks it’s good to buy — Buyer, Ola

Everyone is telling us to buy, and they said it’s a good choice — Buyer, Carmen

I’m forced to rent since I can’t get enough mortgage — Buyer, Tor

In general, Norwegians are optimistic and positive towards home purchase

People here in Norway are, in general, optimistic about home purchase and selling. They would feel comfortable to take risks that they might not be aware of, or they consider it is less likely to happen in Norway - such shown in behaviour like buying before selling (holding a double mortgage), borrow as much as possible from the bank (pushing borrowing limits).

Norwegians are optimistic, and trust the bank and the system. — Buyer, Carmen

I am pushing my home value towards my borrowing limits as this is the way to grow your property here. It’s an investment. — Seller and Buyer, Kai

Norwegians tend to take risk actions without considering it as risks, for example they buy while they haven’t sell. — Buyer, Carmen

I bought my apartment before I sold my home. It’s alright because it’s real quick and easy to sell here. — Buyer, Yang

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Home selling and purchase are usually a ripple of a life change

The act of purchasing a new home, or changing it is usually associated with life changes such as having a kid, change in relationship status, moving from a stage in life to another. In most cases we have talked with, it was never one single event that occurs only by itself.

We sold our home because our family feels like it’s about time for it.

None of us are gonna live there anymore and my conditions are not allowing me to take care of the house. — Seller, Pedro

I am buying a home now because I just ended my last relationship, and both of us don’t want the home we lived in anymore. — Seller and buyer, Helene

We need more space as we are expecting our second child. — Seller and buyer Don

I got my first job and I think this is the time for me to buy my first home. — Buyer, Andreea

After secondary research on project background, we map out the services available on the market for home sellers and buyers, together with the brief transferral journey process as a framework to inform our further in-depth research.

Service mapping

Mapping out

background research

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Brief transferral processes (user journey)

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In-depth research

In this project, we will be researching in the concept of home-ownership as well as the current transferral processes in the Norwegian context. By exploring frustrations within the concept and process, we will explore design opportunities for developing design concepts and scenarios that would either solve the current challenges and/or demonstrate potential future development.

Interview with home

buyers and homeowners who sold before

Intention

1. Understand how home buying and selling is like in Norway

2. Get a clear picture of functional process and explore emotions behind selling and buying process.

Event

We did a total of 16 deep interview in person and on phone with 11 people that had buying home experience; 5 people that had selling home experience. We kept the interview open to let buyers and sellers tell their stories, getting to know about their experiences in the home buying/selling process. Every single story and experience was very unique and informed our later synthesis. All interviewee is anonymous, due to personal data protection.

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People

Andreea (27) [Buying]

She decided to buy her first apartment in Oslo - she is extremely cautious in research.

She spent a lot of time asking family and friends for advice and help.

“It’s super scary, you don’t know what you’re doing, you don’t know how the auction works. Maybe there’s a reason for it (home buying) to not be very easy. ”

“It’s a game, and you’re not suppose to understand the game fully.”

“It is so connected with rumours…in whole process you don’t trust anyone”

“This is kind of the process where I feel like friends and family are very important because they are the only ones that are in this process that you can trust. ”

Jana (29) [Buying]

Changes in life and able to buy at the moment push her decision to buy her first home. Due to limited funding, she rely much on bank’s advices, and trying to do as much research as possible to ensure a good buy.

“When I need advices, I always go back to the person in the bank. I trust him.”

“I was the one with a lot of questions, so I spent quite a lot of time to figure out the process by myself. There isn’t much comprehensive information anywhere so I just have to do it myself.”

“My parents got my back in my buying journey.”

- “Buying a home for myself was actually like a family sport you know. When I got my mortgage offer, they just keep pouring me with finn ads, feels great to have them along the journey.”

Through phone-call

Jing (29) [Buying]

She moved to Norway due to work and decided to buy an apartment here. She encountered quite a lot of issues due to lack of help and language. Information access is the main challenge for her.

She trusted and used brokers as her information source since she doesn’t have any friends with buying experience.

“One of my friend plans to buy a home in one month, but she haven’t got her financial proof until now, buying home is far complex than you thought”

“You really need to try before bidding, even you know how does it work, when you log in and bid, you will still find a lot of things that you are not familiar with”

“I trust brokers, they can provide me accurate information, and ask my questions”

“I felt I was passive and being pushed to accept everything in handover”

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Don (37) [Buying, selling]

His wife and him decided together to sell the apartment they were living in and buy a house, as they wanted a second child. They bought a house at the end.

“We need to move as we need more space for our family.”

“We would like to have a used house instead of a new built - those new built ones looks like they have no soul.”

“We are happy for our new house as we could have our family guests visiting, while having enough space for our kids.”

People

Helene (32) [Buying, selling]

Life changes made her decided to sell the previous apartment. She went on buying afterwards and it was her first time buying a used apartment involves bidding round.

One interesting thing we found is she made a bidding book as her own way to hack the bidding and make herself more rational and clear in bidding.

“If you if you’re a newbie at everything, then it’s very hard. It stresses you out in the beginning. ”

“(This practice is) Just to track where I was. I set it up beforehand, so I can be completely sure (about what to bid) when I see the new bids taking in. ”

“Home buying is all about psychological”

“The realtors job is to fool you into thinking that you can go on as well. It’s like they’re not telling you - they’re ‘updating’ you.”

Through phone-call

Kai (38)

[Buying, selling]

He had sold and bought his apartment before a couple of times - his motivation to switch is to push his apartment he own towards borrowing limits. He gained his experiences and his own strategy in practice throughout the years. He pointed out that home buying for first time buyer is hard and frustrated. He also mentioned the different feeling of being a seller and being a buyer.

“Compared to seller who has broker, as a buyer, you are on your own.”

“The broker will help you, but their final goal is to help owner sell the property.”

Yang (36) [Buying, selling]

He bought a very small apartment in Oslo 4 years ago, and he decided to sell the small apartment and shift to a bigger one last year.

“There is no right or wrong regarding buying and selling home, it’s just different choice.”

“It’s also hard for first time buyers to tell what is right and what is wrong, because you don’t have any experience.”

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Interview with experts in the related fields

Intention

Understand more about the industry and home transferral backstage

Event

We got in touch with 2 Estate brokers and related broker service providers; 2 experts that had did a research on the related field; 1 service provider that had served the specific user group.

“We have the most strict law in real estate. So that’s actually why people normally choose to use brokers. ”

“I think system set up in this way that brokers have to be represent for sellers in traditional market”

We discussed a bit about why sellers use broker service and buyers normally buy on themselves.

“When you’re selling your house it’s probably the most expensive thing you own. So you don’t want to risk this, it’s worth paying a broker a lot of money because you’re going to get it back. ”

“It’s too expensive for buyers…Norway is an open market, everyone can go to Finn.no to buy apartment, so buyers can do it on their own”

People

Anne Karen Aanonli

[Senior Service Designer in DNB;

Leading the development of DNB Samsolgt Oslo]

and Jeanette Moen

[Realtor in DNB Samsolgt Oslo]

The interview had 2 focus. One is mainly about understanding what DNB Samsolgt is offering and how they develop this service, and how are brokers buyers and sellers feeling under such new service. The second focus is about the frustrations in home buying and selling that they noticed, such as issue of trust, stressful bidding etc.

When speaking of trust, they said current legislation has strict restriction for brokers, and sellers are feeling more trusted towards using broker services.

“Brokers are protected title in Norway…The trust for brokers is better today…back in days, agents didn’t have any degrees”

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Hanne Sagen Havsgård [Realtor and Partner in Nordvik Bergen]

Our chat is mainly about knowing about Hanne’s experience in the whole journey and her insights towards residential housing market as a broker. Through chat we understand more about broker’s daily work(front stage and back stage) and what’s their responsibility and restriction of being a broker, We also talked about the motivation and challenges that she faces in her work.

She mentioned that brokers should be a middle men for both buyer and seller, so she gave advice to buyers and helped them with buying, and she’s candid about it’s not a secret that brokers want to get the most from property.

“You’re not supposed to take a side. You kind of like just the one giving advice and helping both sides.”

“You don’t hire a real estate agent - You could do that.”

“Everybody knows that we want to get the most are for the property. That’s not a secret.”

Customer acquisition and trust are the most important and challenging thing for brokers, which are really based on word of mouth in Norway.

“The customers you know, happy customers, they will share their experiences.”

When mentioning about brokers interaction with buyers, she said visning is an important stage for brokers to know more about buyers and establish the trust, so that brokers can assist better in later bidding round.

“My goal is for them (the buyers) to trust me…That actually makes it way easier for me to help them during the bidding round. ”

“I can meet the people in open house and learn more about them… so that I can remind them in the bidding round. It’s like psychology.”

Experts

Through phone-call

Trude Larsen

[Home buying consultant and Managing Director in Krogsveen]

The interview is mainly about home buying consultation service that she is providing now, we talked about how does this service establish and how is current service doing.

Trude also shared us professional insights on home buying from an expert point of view.

She pointed out that current home buying journey is not friendly for home buyers.

And she introduced the main frustrations for home buyers that she observed and how home buying consultation service tackled it.

“The system is not for buyers, you can see there is only 1 hour for visning.”

Speaking of providing help to buyers, she works only for buyers and can provide help

without any reservation and be 100 % on buyer’s side. Brokers can not help buyers well because that’s not their main job.

“Since sensitive touch of brokers work, helping buyers sometimes need to reveal something hidden that is against their work, so it’s hard for them to be 100% for buyers”

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Chiara Lino

[User experience designer in Designit;

Previous in a research project with bank on Nordic mortgage market]

She got involved in a research project about simplifying digitising the process of buying homes while bought her place shortly after. She shared her experience within her purchase journey as well as observations and insights she got from her research.

She mentioned buying is like a norm in Norway, a lot of Norwegians have experience of buying at young age, and these young people rely on their parents to make that happen.

“They buy so young. First (apartment), maybe with their parents…in their 30s”

“People rely on their parents a lot - for advice, for money for a second signature for financial guarantee.”

She talked about she found home buyers in Norway are comfortable in taking risks, and pointed out it might be related to developed legal framework and home buying system.

“The people we interviewed were extremely comfortable in taking risks…not they don’t consider it as ‘risk’.”

“It’s almost (feels) like they feel very protected by the system. ”

“But people constantly like go to their upper limit and even ask for more. That’s considered totally okay. It’s very different than the other countries that I visited.”

Experts

Key Learnings from Interviews

Home buying actually is a journey with a lot of frustrations, such as you can find fear of unknown, knowledge gap, ‘katta i sakken’…

As one of the biggest investment in life, buyers are normally cautious and take time to research on home buying. Family and friends, and brokers are most

Compared to home buying, there are less frustrations towards home selling.

Broker plays an important role in selling process and people in Norway normally choose to use brokers rather than selling by themselves. Most sellers we interviewed said they are satisfied with what brokers have done and think brokers do help a lot in selling process.

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Field research in home viewing (visning)

experience

Intention

We are trying to get a sense of how visnings are host differently by different agencies and independent selling, and to observe how the visitors interact with host or behave.

Event

We went to 3 visning in a Sunday afternoon.

One host by home owners that are selling with Propr.no service, another 2 host by brokers, one by Privatmegleren, and another by Krogsveen.

Observations

1.

Viewing format basics:

Visning in Oslo by brokers usually have 2 visning, one on Sunday afternoon and another in a weekday in the evening. Both of them last for an hour. For independent selling-home-owners, they don’t have the limit of an hour visining only, they host the visning for 2 days, 3 hours a day.

2.

Not much set-up difference

between different hosts:

For brokers, there are little printed A4 posters showing the address and visning time along the way to the property, in front of the door there is a little stand with the agency logo and a sticker on doorbell. The printed printed prospekt is very polished. For independent selling host, all material are self- printed.

3.

Interaction difference between

different hosts:

Compared to meet broker in house, It’s really nice to meet owner, we felt more welcoming when viewing the apartment which were sold by owner and it seems they are more familiar with the apartment. We were greeted by owners, but not brokers.

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4.

Dressing difference between different hosts:

Independent selling home owners wears smart casual while hosting the visning, while brokers are all in black plain suits. For us, home owner seemed more approachable than brokers.

5.

Stressed visitors and intense atmosphere:

All visitors look very stressed and trying to avoid eye contact with each other. When it’s a small apartment for 1 occupant, people come to viewing mostly in company with another person. It’s very crowded to go around in a small apartment with a lot of visitors.

6.

A lot of visitors, one host:

^There are lots of people during visning while there is only one broker, so the experience in being or not being served/approached would be different due to popularity. Quite a lot of visitors get in, look around and left without interacting.

7.

Feeling awkward as visitor:

I felt it’s really hard to open conversation with broker and don’t know what and how to ask. The broker are normally busy. For foreigner, the visning could be more difficult since the barriers of the language and might feel more excluded.

8.

FAQ set up helped:

There is one offering (a small print paper stand) to show the answer for often asked questions. We feel a little helped by those highlights.

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Bidding round

(Budrunde) shadowing

Intention

We would like to find out how it is like to be in the bidding round, observe and record the reactions.

Event

We got in contact a day before to catch up on how it goes. We shadowed a buyer that is going to bid during that week. We met up in the agreed 11:00 on a Tuesday, sit on the side and had chat with the buyer on the way until she won the bid around 13:00.

Buyer went on the first viewing on Sunday to both of the viewing as they are both in the same exact building, similar apartments, at a similar price range, sold by two different agencies, having second bidding together and bidding round on the same exact day.

Observations

1.

Pushing decisions until very last minute and being extra careful:

We found a place to settle and she was calling around to her friends and family to ask which one she should put the bid on. She is receiving text from both bidding round. She was not going to bid on both, as bids are legally binding, so she didn’t want to crash.

2.

Limited insight for instance and dependent on realtor updates:

^The whole process felt very intense and stressed. She is calling to both brokers and getting information from both of them.

3.

Family as advising, financial and emotional support:

The last call before the first bid was with one of her parents, which is her mortgage guarantor as well. He was giving her advices about the potential to renovate the apartment to raise the value and based on the flat had so far no bidder was on it, that influenced her to make up her mind on which one to go for. She already told us about the justification before the call, she was calling to reassure about it.

4.

Analysing and rationalising in blank times:

She is a bit more experienced as she sold an apartment before, she was analysing and rationalising during the blank times (while she is waiting for something to happen) and making a guess what is happening on the broker or the other bidders’ side.

5.

Spike in satisfaction and joy:

She burst in joy and having a great relieve after she got the last call from broker. There is a message that she had to reply to make the last bid after negotiation of the deal. She was celebrating that moment while she sent out the ‘JA’ on the phone.

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Mapping out the research

Home buying or selling process

Functional process Emotional highlights

Full version in separate file

Interaction between actors in specific stages

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Actors involved in the journey

The actors closes to the ‘home’ icon are involved in the main transaction process, while the farer ones that are more hidden and/

or working at the backend of the process.

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/53 II. Research and Define | Part 1: Understanding the context

System map

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Part 2: Synthesis and

directions

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Synthesis approach

II. Research and Define | Part 2: Synthesis and directions

Steps

1. Externalizing all the data gathered from research - Transcript and document/ mapping.

2. Sharing interesting quotes with each other - to highlight important stories from interview then share and write down notes on post-its while the other person is describing the interesting finding from it.

3. Organizing data - Sort out and categorize all post-its.

4. Interpreting - Identifying and interpreting the groupings and their relationships to make it explicit and informative.

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Directions overview

Our research is open and explorative without defining a brief or problem, the main goal in research is to understand the whole landscape of residential housing market and home buying and selling process, and we want to find as many as potential areas that we could work on then scope down to identify our brief. After collecting information from research, we did synthesis to cluster main findings and identified 4 potential directions.

Our decision and moving it forward

We decided not to proceed on direction 1-3 as we found that the ideas would stay on experience level of intervention, in which would be difficult continue working without a collaborating client. We decided to move on with direction 4, which allows us to continue unwrap the research by further analyse and understand what caused such situation from a holistic point of view - so we might design solutions that would drive systematic changes, and stretch the potential as a diploma project.

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Direction

Powerless buyers in seller/owner oriented home buying journey

Power dynamic

shift in residential housing market

‘Scary’ Home buying process

Evidence 01

Buyer has a lot of

frustrations in the journey.

Especially for first-time buyer.

One of them is

knowledge gap

- there are a lot of documents requires professional knowledge to understand what’s going on.

The broker told me this situation (technical issue) is normal, I don’t know if what he said was true. — Buyer, Jing

I ask my friend to look through documents (the contract & prospectus) for us — Buyer, Carmen

Some stuff like yeah, this this section is about this and you’re like ‘okay, but what does it say in it? was that for me?’ It was a bit of a frustrating. — Buyer, Carmen

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There is also what in Norwegian called

‘Katta i sekken’

- hidden flaws are something that buyers hard to notice about.

I got tips from my mom and look for some ‘hidden flaws’ during visining. — Buyer, Glenn

They must be hiding something, there are reasons for things not being there. — Buyer, Andreea

Fear of unknown

is the thing making buyer feeling anxious, and this feeling is going through the whole buying journey.

Like bidding round, which is very stressful and full with unknown, you will never know what’s next bid and sometimes you can just anxiously sit there and wait for something to happen.

Should I bid over? What if I add too much or what if I add little but lose the bid? — Buyer, Jing

Is it another bidding coming? — Buyer, Glenn

Buyers need emotional support in ‘scary’

buying journey as well. When we did shadowed with a buyer, and she told us it’s really nice to have somebody around her. Another buyer said they asked experts and colleagues to take a look their bidding price to reaffirming that this is a good deal.

Everything just happened too quick and difficult to process the change

Another findings from the process is, the actual buying process, happens very fast when we put it in a time-scale. From the visning day to the moment that you win the bid, everything could just happen in 2 days.

It makes some people having a hard time to process that change. One of the buyers we have had a chat with, he mentioned that -

The buying process is way too fast, I didn’t even process and we’ve already bought — Buyer, Giacomo

According to another research published by Privatemegleren, well-known real estate agency in Norway, 20 % of buyers spent less than 30 minutes actually viewing the property they later bought. People that wanted to buy have to make decision really fast - almost like in an competition.

With the given time frame, buyers could overlook a lot of stuff in the prospekt and during visining, which they would have to take care of themselves - as upon legislation, buyers are supposed to have gone through all materials and checked the property are as the condition as stated.

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Few services tailored at buyer within buying process

Evidence 02

We mapped out existing home buying and selling related services in market,we found there are lots of services helping with home selling, while there are few services tailored at home buying.

Compared to seller who has broker, as a buyer, you are on your own. —Buyer & Seller, Kai

Broker as the ‘middle-man’

between buyer & seller

One of the interesting finding we found within the process is - people trust broker with the process and professional help in general, but in buyer’s point of view, they see brokers as helping the home owner’s side rather than being neutral.

According to the Eiendomsmeglingsloven, the Real Estate Act, broker is suppose to be the ‘mellommann’ in process - which means they should be facilitating both sides to settle on the deal, and not taking sides to benefit involved certain party during the process. During the research process, the thing that we have heard the most from buyer’s interview is, the buyer’s experience from broker’s service is mostly

‘functionally helpful’, but quite negative in how they were treated sometimes.

This shows there is a gap between how brokers perceive themselves as, and how buyers perceive their service as.

The broker will help you, but their final goal is to help owner sell the property. —Buyer & Seller, Kai

I think the broker and seller are on the same side.—

Buyer, Jing

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Service tailored at home buyers are not visible

Currently only Krogsveen has a Kjøphelp service for buyer in market, which is a service providing professional consultation and support to help buyers with home buying. We had a meeting with Trude - home buying consultant and managing director in Krogsveen Kjøphelp service. She told us customers are satisfied with service that she provides now, and customer acquisition is the biggest challenge for Kjøphelp service, a lot of people don’t even know its exists.

I don’t even know this service(Kjøphelp) exists, but from what I have experienced, I should have had one. — Buyer, Jing

Everyone said it’s good and they want it, but a lot of people don’t even know about it. - Home buying consultant, Trude

She had the inside perspective. It was very lucky to have her (expert) through whole process. —Buyer, Giacomo

Home buyers do have functional needs towards home buying, but why kjopjhelp service is not used by most buyers, we did an analyzation.

Seller/owner oriented home buying system

Evidence 03

The feeling of being a buyer within the current system

The experience of being a buyer in the process is terrible for some. Some found that they feel very passive, while some describes themselves as powerless, compared to home owner in the process.

I, as a buyer, have no power in this process.— Buyer, Andreea

You can see there is only 1 hour in visning, it doesn’t make sense. - Home buying consultant- Home buying consultant, Trude

Trude told us there are many rules that embedded in the system are not for buyers, where brokers and sellers get more advantage.

What gets me about the house buying auction system is that the seller has all the benefits of time pressure etc of an auction but none of the potential risks. If they don’t like the amount they don’t sell. - Home buyer, Ja_ja

I feel really passive in whole process, and brokers and sellers have the initiative — Buyer, Jing

Jing told us in handover, broker is holding the checklist by herself, and she just goes through it like everything is alright. she felt extremely passive and powerless.

From research, we see home buyers feel frustrated and powerless in journey. Then we started to think, why do buyers feel that way? What if that is being designed into the system, without us noticing? We then try to the break down the current home buying system with the concept of scarcity that we came across in our research.

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Understanding the concept of scarcity

Scarcity is the psychological bias that makes us place a higher value on things that are scarce than those in abundance. This will make us desire something more when it is harder to obtain.

There are 3 types of scarcity.

Quantity-limited scarcity

that we desire something that is rare and limited- supply, and popular.

Time-limited scarcity

which means we desire things more when there is a deadline.

Access-limited scarcity

we love restricted features the feeling of having more power than others, because it made us feel special.

Scarcity within the buying journey

We found there are a lot of scarcity in buying journey that are trying to push buyers to buy.

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Summary

What we see in current situation

Powerless buyer in seller/owner oriented home buying journey

Why we want to change

What we stand

Home buyers and sellers should be at same level. The system should consider benefits and rights of both sides.

Home buying is one of the biggest investment in people’s life, and currently people actually spent less time to look at a house than we use to evaluate a kitchen appliances or a new car. A new study conducted by research firm InFact for the real estate brokerage Privatemegleren.

It showed that fully 20 percent of buyers

spent less than 30 minutes actually viewing the property they later bought.

Home buyers shouldn’t be so passive and powerless in such important and big investment.

How might we shift home buying journey from seller-oriented to

equal for both sides, so buyers might get more support and their journey towards home ownership would be a bit smoother?

Initial brief

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Part 3: Further research

and analysis

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What means

support and power for home buyers?

II. Research and Define | Part 3: Further research and analysis

Better buying experience

A better buying experience, and the feeling of being served well by service providers would make me feel being supported.

01

02

03

In the research phase, we had a discussion with home buyers about what they think power and support for them, how would they feel if they are being supported, or what would they say when they are in a position that feel more powerful that it currently is. Here are the summary it:

Information access

I wish I would be able to get useful and trusted information, maybe tips and tricks about home buying.

Connections and network

I am glad that I have the access to the insiders (professionals) in the industry, they gave me peace in mind.

Define a happy home buyer

In an ideal scenario of buyer-centric home buying journey, home buyers would like to be able to say:

I get enough information to make informed decision.

“I know what I’m buying”

“I can make the best of visning”

I have professional knowledge or support.

“I understand specific terms in home ownership”

“I know what to look at and what to ask”

I have sense of control.

“I know what will happen and what should I do”

“I have flexibility in home buying”

“I feel I am served well in home buying”

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Under the iceberg - What created the power dynamic

Approach

To analyse current power dynamic, we used the iceberg model to find the underlying reasons that embeded in current home buying system from different perspectives.

The iceberg model is a tool for analysing from a holistic systemic level, which offer us the framework to discover the patterns of behavior, supporting structures, and mental models that underlies beneath a particular event, thus rethink about how current power dynamic can be intentionally reshaped by introducing interventions targeting at the core of the problem instead of its phenomenon.

1.

Heated housing market -

“Buying is good”

2.

Strong distrust within system and less visible trusted actors

3.

Buying home in Norway is easy, buyers can do it on their own

4.

Buyers take current system for granted and normal as it is

5.

Regulations towards home buying system

Insight

overview

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Heated housing market - “buying is good”

Insight 01: Market force

Norway has high home ownership rate, and owning is a social norm in society. People feel positive about home buying and Norwegian housing market is heated with stable growth. (The transaction volume in 2019 is the second highest among last 10 years.)

How fast a home could be sold can also indicate heated housing market - a new survey shows that most homes now sell within 16 days in Oslo, and 29 days on average nationwide. The demand is extremely high, especially in cities, and real estate properties, as limited resources seller owns, seller side becomes more advantaged in this process.

“People pushed us or like recommended us to buy because of the crisis and lots of people say you’re basically renting by giving money away, you should buy.” - Carmen

“Buying is saving money”

Strong distrust within system and less visible trusted actors

Insight 02: Actors & Roles

Myths and rumors regarding home buying

Home buying is one of the biggest purchase in life, and trust is one of the important issue in buying process.

There are a lot of myths and rumors about how things are done or will be within the buying process.

When it comes to home buying, you can find a lot of information from different sources. The stories and opinions varies. It takes tremendous amount of time for buyers to do research - seek, ask around, explore, go through a lot of content and trying to understand, identify what and who to trust.

“When it comes to investment, nobody tells you the truth... Everyone has their own stands”

“It’s like this, super hippie person, like, all of a sudden, she’s talking to you about to housing market”

“If various sources tell me the same story, I will trust it”

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Family & friends - ‘expert’ for home buying

Family and friends are very important role in home buying as they provide emotional support and sometimes financial security. They are most trusted actors for buyers, and they are also the closest actor that home buyers can reach. If buyers have any questions towards home buying, family and friends are the ‘experts’ that they ask for help, tips, advices and information.

“I was lucky to have a mom that was, on all of this stuff. I relied much on her.”

“My girlfriend knows the process (of buying home)”

Getting support from family and friends is a common practice, but a potential risk that is often being overlooked is family and friends as a trusted actor might not be able to provide proper support to home buyers, since home buying requires specific knowledge and/or experience, and strategy differs from cases to cases, what worked for others might not suit the situation buyer is dealing with.

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Less visible trusted actors and professionals in home buying

Some trusted actor with capability to support home buyers are hidden or less visible in home buying journey.

Public sector

Forbrukerrådet as a trusted actor from public sector, it provides useful and neutral home buying information to consumers, which includes practical information, tips, and legal rights. They also work actively as an advisor in related policy making. Currently they have several home buying related initiatives to work on continuously.

Apart from Forbrukerrådet, there are also other actors from public sector are providing information towards home buying, such as NyiNorge(New in Norway), Huseierne (home owner federation). Buyers might not associate these actors with home buying.

Kjøpshjelp service

There is once buying help service in the market, which is owned Krogsveen, which home buying consultant can provide reports or guidiances to home buyers.

Kjøpshjelp service provides useful and professional support to home buyers, one marketing report in 2015 shows nearly 70%

buyers said they want the separate advisor to assist them with home buying, and the service provider, Trude Larsen, told us she got positive feedback from her customer about this service.

From our chat with Trude, she is trusted by buyers as she is very experienced and working only for buyers. We had a chat with home buyers about this service and one of them told us she would totally trust such service that the consultant is standing on her side, since she would be paying for the service. The major challenge for this service, as Trude mentioned, is visibility, since buyers are not used to it and a lot of buyers don’t even know it exists.

Takstmann

Currently, takstmann is mainly working in backstage of home selling. They evaluate property and write condition report as part of sales material for buyers to read. They have the expertise in home evaluation, understands the conditional reports very well while we see a potential for them to offer service on the home buying side as well.

Source: Krogsveen Homepage

Source: Forbrukerrådet, Huseierne, New in Norway Homepage

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Buying home in

Norway is easy, buyers can do it on their own

Insight 03: Beliefs and mindset

A lot of people consider buying a home in Norway is easy as soon as you got the fundings ready. In some other countries such as Denmark, buyers need to hire a lawyer for the process. While in Norway, you could just look for a house in the same place where you find a second-hand yoga mat, and buyers can go through the process by themselves.

In Norway, buying side are not responsible for preparing any legal paperwork, and realtors (hired by sellers) will be the middle men to help with closure work. People are aware of the risk on selling on their own, while are not aware of the risk of buying on their own.

When home buying are considered easy, home buyers will become used to buying on their own and think it’s normal to have no support, despite the fact that most buyers we have talked with told us all the frustrations they had within that process. The buying process itself might look ‘easy’, but ensuring you are buying the right home would be a challenge for home buyers, especially for those who have less experience in.

We have heard of buying a house in Norway is as easy as everything you need is on finn.no, everything is presented and nothing more you could ask for.

Source: Finn.no

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Buyers take current

system for granted and normal as it is

Insight 04: Beliefs and mindset

There are a lot of frustrations in home buying journey, such as knowledge gap, ‘katta i sekken’, fear of

unknown, etc. To tackle these frustrations, home buyers hack through structures and system in their own way - some with self-made tools, some with strategies, some with the connection to experts in the industry.

We rarely see buyers question the system itself - Most buyers take current system as normal as what it is.

“I’m just a buyer, I can do nothing towards system”

One general thinking that home buyers tends to think is they can do nothing towards the system.

The systematic change from legislative level was a continuous fight, and a change would requires several years of work involving multiple actors. Systematic change is powerful but it won’t help buyer’s current home buying - “I just need to buy a home now”.

Climbing the ladder -”The frustration is temporary and won’t last long”

Another general thinking is home buyers consider buying as a transitional stage, which it seems like all difficulties will be gone and everything will be fine after purchase. They consider outcome is more important than process, as long they buy the home eventually, they will overlook how frustrated the process is.

Even buyers feel buying is a transitional stage, actually it’s more like a loop. Buyer and seller are interchanging position. Someday when you change your home, you become buyer and enter the market again. Most people in Norway buy and sell at the same time, which means you are not only a seller in the position with more help, you are a buyer at the same time in a

‘terrible’ situation where support is very limited.

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Regulations towards home buying system

Insight 05: Rules & laws

Legislation set up the framework for the current home buying process. While the practice of realtor is being much more restrained than it was before, the framework is still has a long way to balance the power dynamic between involved parties. The legislation is still continuously being amended to make system better for all involved consumers.

Home viewing (visning) system

The visning is meant to offer home buyers a chance to view property on site and evaluate it. The visning by law, set a time limit which has to last for a minimum of an hour. The common practice of realtor services is to host open day event that last for 1 hour, which creates a very packed event space with all the rival buyers there at the same time. That has led to single visning of many properties that in turn allow interested buyers very little time, in less-than-relaxed circumstances, to inspect the subject of what may be the biggest investment of their lives.

Bidding round (Budrunde) system

The bidding round system is meant to make

competition more fair to potential buyers. While most bidding round is host by realtors, the style of host is very different and it is very difficult to restraint it by rules. Many home buyers claimed that they somehow can ‘sense’ realtor’s updates call is being a little manipulative that caused they make decisions they didn’t plan to do under pressure.

“What gets me about the house buying auction system is that the seller has all the benefits of time pressure etc of an auction but none of the potential risks. Ie. If they don’t like the amount they don’t sell. - buyer, ja_ja”

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Define design opportunities

01. 02.

The main insights from our analysis leads to 4 design opportunities.

Expose invisible trusted actors who are able to provide support to home buyers

Raise buyers awareness of buying home is not easy and it’s better to have more professional support towards home buying

03. 04.

Raise buyers awareness of current imbalance power in the journey and shift their general thinking towards home buying

Push legislative change towards home buying system to shift current power dynamic