How technology is disrupting the real estate industry
When Marc Andreessen famously said, “Software is eating the world,” that statement included our houses, office buildings, and yards, too.
Technology touches every aspect of the real estate industry today. Buyers can see a birds-eye view of a neighborhood 2,000 miles away through drone footage. You can buy a house online without ever taking out a pen to sign a contract. Searching for new listings is as simple as downloading an app, choosing your location, and awaiting notifications with options.
More than 70 percent of today’s buyers search for homes online, and 85 percent of real estate agents use texting to get work done. Digging to find information on schools, demographics, and crime statistics is a task of the past — now websites and apps make this data accessible, so it’s easier than ever to make informed decisions.
Below are some of the top technologies that are changing the landscape of the real estate industry today and tomorrow.
Top tech trends shaping the future of real estate
Blockchain makes it possible for people and companies to process major transactions without going through intermediaries like credit card companies, banks, or governments.
As you can imagine, real estate almost always counts as a “major transaction”. If blockchain fulfills its promise in real estate, it can bring security, transparency, and efficiency to real estate transactions. Two places blockchain is expected to make the biggest splash? 1) Tokenization and 2) smart contracts.
1) Tokenization in real estate means using cryptocurrency to split assets into tokens that are stored on the blockchain. aXpire COO Matt Markham gives a great explanation of tokenization in real estate on Hacker Noon. It creates two big changes:
- Landlords can sell off just a portion of their property and investors to resell their shares on the open market through secondary exchanges.
- Individuals from various income levels and locations can have access to investment opportunities that used to be out of reach.
2) Smart contracts bring together transactions completely between the buyer and the seller (or renter and landlord). Buyers can submit their information on an encrypted block directly to the seller, rather than going through a bank, for instance. Removing middlemen, and human interaction in general, can both speed up the transaction and reduce the chance for fraud. Sea Foam Media’s Chloe Diamond details more on smart contracts and blockchain in real estate.
It’s no secret that remote work is on the rise, and the sharing economy is growing with it. Rather than buying a car, why not lease one (or take a Lyft, GetAround, or a Spin scooter?) Instead of purchasing furniture for your startup office, why not rent some desks for a year before your team outgrows the space?
Since people are less concerned with owning physical goods and properties, a new crop of businesses have sprouted around the real estate industry to facilitate mobile and shared lifestyles:
- Modern real estate companies like Zeus enable businesses to rent furnished homes for extended stays — and home owners to lease their spaces to businesses.
- Co-working companies like WeWork have made it possible for businesses to not have to sign ten year leases on office space and deal with the hassles that come with that.
- Companies like CasaOne enable individuals and businesses to rent furniture on a monthly basis rather than spending full price to buy it and reselling it later.
While Rosie the Robot Maid isn’t buzzing around giving property tours just yet, artificial intelligence is impacting the real estate industry in less obvious ways every day — through machine learning (ML). With ML, computers can learn from data, rather than being programmed to do certain tasks. In real estate, ML is helping influence smarter business decisions through pattern recognition — to determine information such as when a property or neighborhood will become popular.
Speeding up the sales process
For agents and brokerage companies, virtual reality has the potential to speed up sales cycles by allowing clients to get a better sense of a property and putting agents in touch with buyers further along in the buying cycle.
VR for real estate allows people to try before you buy — without spending time and money traveling to scope out properties. Instead of using high quality photos or 360° video, forward-thinking realtors offer clients 3D virtual property “tours.” Thanks to aerial drone footage and 3D technology, clients can “step into” a space to experience the scale of rooms, climb into showers to make sure the shower head is high enough, and walk out to check out the neighborhood.
In the past, agents had to spend time and money staging a space, but soon that might not be the case. Instead, clients will be able to personalize a room with virtual furniture.
Software like Salesforce, PipeDrive, Base, and countless other CRMs for real estate help agents keep track of emails, calls, and the progress you’ve made with your prospects. You can get a clear sense of your pipeline, and quickly identify the areas where you need to take action. Once a deal has been won or lost, you can easily report on results and use that data to forecast revenue.
The rise of mobile
Ordering food? Catching a ride? People do everything on their phones today, and they expect to browse, buy, and sell real estate from the palm of their hand, too.
With real estate apps like Zillow and Redfin, clients and agents have a centralized platform to browse, buy or sell a property, find an agent, and get notified when a new listing hits the market. Their platforms house data for real estate discovery, property values, mortgages, and more.
Mobile apps are disrupting the renovation space, too. With companies like Thumbtackand Handy, it’s easier than ever to hire a landscaper, painter, plumber, cleaner, or any type of professional contractor to work on your property.
Improving the tenant experience
Internet of things
Properties house loads of data on the way people live. Through the internet of things, technology now lives inside non-technical things like doors, light switches, locks, and more.
Once you have systems and sensors in place, every action a tenant makes becomes a data point that can be used to improve their experience. For example, property managers can gather data to understand:
- When do they prefer to have the heating on?
- Where are the areas with the highest foot traffic at different times of the day?
- Which spaces are used the most?
Real estate management used to require a lot of paperwork, from maintenance requests to insurance documents. Now all this paperwork lives in the cloud, which enables property managers to track trends and improve the way they manage properties. Owners can monitor a premise in real time and control security features remotely. They can send out reports on utility interruptions or control building temperature from afar.
Channels for connecting with clients and tenants
Now there are more options than ever for communicating with clients and tenants, and being available on many channels makes it easier for clients to reach you anytime, anywhere. Agents and property owners are using email in addition to:
- SMS texting tools like Twilio
- Live website chat tools like Drift and Intercom
- Social media messaging through Facebook and Twitter
- Client communications tools like Front to manage email and every other channel efficiently in one place
Technology is shaping the real estate industry for the better
PwC’s yearly trend report for real estate suggests, “If people don’t recognize technologies are existing and, moreover, how to integrate them, opportunities are being missed.” From shortening the sales cycle to providing a top-notch tenant experience, technology will continue to transform the way we buy, sell, and search for real estate.