Because of COVID-19 restrictions, the long-standing real estate process had to adjust: no in-person open houses, brokers’ open houses, or house walk-throughs for prospective buyers, their agents, or the seller’s agents. Innovation occurred as the wheels rotated. From virtual showings to closings, real estate technology has changed everything.
“Real estate technology has transformed the industry, putting more control in the hands of consumers and giving salespeople flexible solutions,” said Laura Adams, senior real estate analyst at Aceable. “While online listings, drone showings, and remote closings existed before the pandemic, they’ve become the norm.”
The pandemic has driven the real estate market to new heights not seen since 2006, but the coronavirus era’s performance is set to be “the inverse” of what happened 15 years ago when the bubble burst and the global recession started. Experts say today’s buyers have better credit scores and put more money down on houses, which are increasingly rising in price across the United States. Home sales in the United States reached new highs in 2020 for the first time in 14 years, and analysts expect that in 2021, they will be even higher.
People were able—or forced—to save more money by staying at home, and the real estate industry received a major boost from real estate technology, resulting in the ability to buy a new home and an interest in finding one. Long ago, brokers found listings and presented them to buyers. But with the dawn of the internet for all, buyers harnessed their own power and scoured the listing platforms: The MLS, Zillow, Redfin and Realtor.com, among others.
A first in a contactless solution: Schlage invented the Schlage Encode Lock, a Wi-Fi deadbolt that enables “a reinvention” of the home tour and secure distancing; security features include a remote locking feature from a smartphone.
The days of dispatching a junior agent to snap a few short Instamatic shots of each empty room in a vacant home were long gone. Sophistication, technology trends took over. Individual agents had websites built for their individual listings by the year 2000, regardless of what their brokerage was doing online. They discovered what was most appealing to highlight: kitchens and bathrooms, with the whole house photographed beautifully. The shaking hands, the walk-throughs captured on camera, sometimes with similarly shaky narration, came eventually, as bandwidth allowed. There was only one way to go: up.
Houses in a certain price range were professionally staged, with interior designers weighing in and filling homes with fancy furniture, making each house look like a display home. Brokers and individual agents scrambled to ensure they had an up-to-date website and a robust social media presence as a result of real estate technology. There was a rivalry going on.
And to be competitive, real estate agents budget tech pros to come in. “Always, always hire professionals,” advised Robin Zacha of Zacha Homes, a veteran Realtor for Los Angeles’ westside for three decades, whose current listings are in the $2 million to $5+ million range. Zacha noted that shooting the 360-degree specialty house tours should never be attempted by agents “There’s no way I’d do it. There are so many specific, necessary shots to be taken, and executed in a very particular way.” In the end, she said, investing in the budget needed to show a house to its best advantage far outweighs efforts to cut costs.
A well-shot video tour will display the distinctions between a living room, a great room, and a family room, as well as show the “added without permit” covered porch and visually discern what appears to be real-estate jargon or short-cut talk in the online listing.
“Right now there’s 360-degree tours in rooms along with more expansive ‘interactive’ tours where the buyer has more opportunity to point and click to direct themselves through the VR [virtual reality] version of the home,” said Noaam Blum, CEO and co-founder of the platform RentBase. “Some production companies are going even further with full-scale ‘experiences’ to help Realtors sell homes. Of course, the more exciting the tech, the more expensive it can be, but generally the investment should be worthwhile as this becomes more commonplace. It’s pretty edgy right now but buyers get a kick out of it and anything that can set a home apart from others is always a positive. I definitely feel like NYC and L.A. markets, likely Miami too, are at the forefront of this, but it’ll make its way to the rest of the country in due time.”
Adams said that “just about every step of buying a home has been improved by ‘proptech’ (property tech),” and she cited the online tools available: Mortgage calculators, home lenders, listing marketplaces, communications with agents, video tours and drone showings, neighborhood research, document management for closings and more.
“Proptech is most important in cities where there is a large transient population, places that have a strong presence of universities, hospitals and a strong job market,” said Blum. “This includes major cities like Philadelphia, Boston, San Francisco, NYC, Houston, Chicago, Miami. These cities have already begun to rebound quickly. I’ve spoken to agents from major cities across the country and they all say the same thing that anything that can help save them time with their business is greatly welcomed.”
The new platform Localize “harnesses the power of AI [artificial intelligence] to provide a cutting-edge experience for homebuyers and brokers,” explained Omer Granot, Localize president and COO. “[W]e streamline the house-hunting journey through” property insights and “our concierge texting service, Hunter by Localize.” Hunter curates properties specifically for each homebuyer through its “Smart Matching technology.”
It sends regular recommendations to potential buyers based on more than 100 data insights associated with a listing as well as a homebuyer’s personal expectations “to find them the perfect home. When a buyer is ready to move forward, we match them with one of our partner agents.” Hunter, on the other hand, serves as a virtual assistant for brokers who send leads to Hunter, who then assists them with the leads they already have. Granot mentioned that they don’t need new leads, but rather assistance in handling the ones they already have.
Another platform designed for the real estate industry is Forewarn which includes membership to the local MLS and access to different real estate transaction forms and free tools. “The application helps you verify a new prospect’s criminal history, bankruptcy history, property ownership history, and vehicle history by simply searching the phone number the prospect contracted you from,” explained residential developer Bill Samuel of the Chicago Area Realtors Association, which added Forewarn in June 2020. “Almost half of the interactions agents have are with individuals they have never met before so this new tool is great for helping everyone know who they are dealing with before conducting an in-person showing.”
AnthemIQ is a new forum for commercial real estate transactions (February 2021). AnthemIQ co-founder and executive chairman Kenny Tomlin said it “eliminates the need for obsolete PDFs and spreadsheets and ditches the need for needless back-and-forth via email.” The platform employs a “technology-first approach that empowers the entire CRE ecosystem” and features a “streamlined digital workflow [that] facilitates cooperation between tenant reps and leasing agents, allowing them to reach a signed contract more quickly.”
Within the homes themselves, tech will continue to be important. “The smart home device market is expected to continually grow with household penetration increased by 40% in 2021 and is expected to hit 57.2% by 2025,” said Fatima Dicko, founder and CEO of the property platform Sugar, developers who “build communities in real-estate spaces.” Innovative new technologies and new tools for the home (facial recognition, video door alarms, remote-controlled locks, AI burglar alarms) will “push social efforts and connectivity with improved safety measures,” Dicko said.
Proptech, especially contactless technology, has trickled down and is now being used in temporary housing situations such as Mint House, which provides mobile check-in, keyless entry to buildings and suites, and fitness devices for live and on-demand classes. Residents’ preferred temperature is set by smart thermostats.
“The real estate tech space is huge and is going through a lot of innovation in recent years, but there are still a lot of opportunities to further innovate,” said Gary Beasley, CEO of Roofstock, a new platform targeted toward single-family rental properties for those looking to diversify their investments.
Beasley, on the other hand, said he’d like to see “an actual VR tour of a home,” and noted, “it will be an awesome experience to virtually walk into a space and really get a sense of the dimensions and feel of the place. This could be further augmented with a live agent in the same space in VR giving you a live tour. I think the future is heading there, fast.”
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