There isn’t an industry on earth, sea or sky that hasn’t been impacted by new technology over the last century, whether dramatically or slightly. On top of the disruption of industrial age factories, today we have high-speed computers, big data, social media, robotics and so much more to come to terms with. For real estate, the transformation has been slow but steady: as the technology improves, the field has morphed one gigabyte at a time.
New forms of technology change the real estate experience for buyers, renters, and industry insiders. The transformation has been ongoing; in today’s information age, it arguably began once listings were hosted online, since which time the process of buying and renting has become even more digitalized.
Here are seven distinct ways in which technology has begun, and will continue to shape the way real estate is marketed, rented, sold and managed.
1. Mobile technology is heating up
With the rising ubiquity of smartphones at hand, it’s little surprise that when searching for real estate, over 60 percent of renters use mobile devices to do their research. By allowing a huge audience of potential buyers and renters to browse remotely, sales are driven up and exposure amplified.
This means responsive websites, mobile apps, and quick communication via text and email is more important than ever for real estate industry insiders. Potential buyers are likely to be turned off if they can’t view a property on their device, or send inquiries digitally. The entire process needs to become at once easy, trustworthy, and quick — or else clients will move on to the next mobile-friendly listing.
2. Marketing has been digitalized
Marketing a piece of real estate is no longer as simple as listing your home in a local newspaper. While open houses are still fairly important, quality photographs, information and descriptions are perhaps the most vital in attracting potential buyers. This is because the Internet offers many digital outlets to advertise property on — and great photographs are the bare minimum that buyers look for.
Disseminating your advertising onto different digital platforms, complete with the information buyers and renters need, ensures that the listing isn’t overlooked. It also means that those browsing will have all the answers they want up front in terms of price and amenities, speeding up the process from first sight to lease-signing.
3. Startups are surging
Venture funding of real estate tech firms has been experiencing a surge: in 2015, it crossed the $1 billion mark, and is projected to surpass $1.5 billion in 2016 at its current rate. So, where is all this VC money going?
There are a range of tech startups that tackle all areas of the real estate industry, from listing and search, to investment, to brokerage platforms and lease management software. Some of the leading startups include Zillow and Trulia, both of which provide robust online real estate databases, Redfin, a web-based brokerage platform, and High Tower, which offers online tools for landlords.
The amount of companies occupying this space goes to show that the demand for digital real estate services is not only high, but increasingly essential.
4. Buyers and renters are more informed
With the Internet at their fingertips, buyers and renters have access to more information than ever before. There is no pulling the wool over the eyes of today’s informed buyers: with records of building’s history, neighborhood demographics, comparative listings, fees and reputation. Technology is so often synonymous with transparency, and it’s making buyers smarter.
Informed buyers and renters raise the demand for accountable and specialized real estate insiders that meet their needs. This demand drives better real estate practice in general — and it’s all thanks to communication and information technology.
Unsatisfied tenants may turn to the web to review or report issues they experience. Thus, good management is sought after via online research, and bad management is a digital stain difficult to remove.
5. Virtual tours are on the rise
Photographs are all but essential in real estate marketing, but the next step — virtual touring — is already upon us. For larger properties, such tours are all but expected to give potential buyers a 360 view of various spaces, not unlike Google Earth navigation.
There are emerging ways to enhance virtual tours. Video touring is one popular choice, along with the option of interactive floor plans. There’s also a tool called StyleDesigner by Obeo that lets real estate agents virtually upgrade bland spaces with decorations to show clients how far a little imagination can go. For a tour of the surrounding neighborhood, maps can be mashed up with Google or Mapbuilder to highlight local hotspots and attractions in proximity to the listing.
3D virtual tours are also well on their way. Microsoft recently announced its new Photosynth technology, which can take 2D photographs and render them in 3D for immersive digital tours. Add a whiff of new-home smell and hardwood floor texture, and you could have a 4D experience, too.
6. Online bidding, crowdfunding and transactions
In a day and age where most of individual wealth and information is stored digitally, physical checks and contracts are beginning to seem antiquated, as are the normal means of investing and paying. Nowadays, enterprise software can enable transactions between real estate agents and buyers — this way, documents and information can be shared and signed in seconds, with or without a physical handshake in tandem.
Online, a variety of transactions are becoming more communal, too. Prospective buyers can bid against each other, or pool their money to invest in properties. Homes auctioned virtually through Hubzu and Auction.com will sell properties to the highest bidder. Individuals can also get in on the investing game with a number of real estate crowdfunding options.
7. The sharing economy strikes
Lastly, the success of disruptive vacation rental models like Airbnb demonstrate that renters are interested in more flexible options — for life, work, and play — and are happy to do so without a middleman. This flies in the face of tradition, but is proving to be more than just a trend. There is already a UK startup called Yopa that allows peer-to-peer home selling, purported to save users thousands of dollars.
The jury is still out on whether the real estate industry is ripe for disruption by the sharing economy or any of these other technologies. Some argue that it simply does not apply, but I think the truth is somewhere in between.
In some ways, real estate does differ from the industries that have been shaken up by technological innovations — the basic business model is a generally stable and adaptable one. This said, real estate has, and must continue to take tech innovations into stride if it’s to remain profitable and modern. This way, it’s sure to be amplified and augmented by change rather than left shattered in its wake.