Five Ways Technology Is Transforming How The Real Estate Industry Works
December 4, 2020
According to the National Association of Realtors®, there are currently over two million licensed real estate agents in the United States. Realtors® are responsible for representing buyers and sellers and guiding them through the process of completing a real estate transaction. They can assist buyers and sellers with everything from touring homes and making offers to scheduling inspections and finalizing contracts.
Even though Realtors® have been around for over 100 years, the real estate industry has drastically changed throughout the decades.
One of the main driving forces of change within the real estate industry is technology. In fact, new technologies could lead to a complete transformation of how the real estate works. Here are five ways that technology is altering the real estate industry:
Virtual Home Tours
It’s very rare for a buyer to fall in love with the first home that they see in person. In fact, the average homebuyer will tour about 10 different homes before finding the right one. This means scheduling 10 different listing appointments, traveling to 10 different properties, and touring 10 different homes.
This can take up a significant amount of time for buyers and their real estate agents. It’s even more challenging for out-of-town buyers who have to travel a long distance to see a listing in person. But luckily, there is a more convenient and faster way to check out listings thanks to technology.
Many real estate agents now use virtual reality technology to provide their clients with virtual tours of listings. Using this technology, prospective buyers can tour every inch of a property without ever leaving the comfort of their own home.
The tours are incredibly detailed and lifelike, so buyers will feel like they’re actually walking through the home. During the tour, buyers can even view rooms from multiple angles or get the exact dimensions of a space.
Virtual home tours give buyers the opportunity to see more homes than they normally would see in person. They are free to explore as many homes as they would like until they find one that meets their family’s unique needs.
Buyers can also explore these homes on their own time, so there’s no longer a need to schedule a tour with a real estate agent. Essentially, a virtual tour is like hosting an open house 24 hours a day, 7 days a week.
Virtual tours also make the process of finding a new home easier on buyers who don’t live in the area. This technology allows these buyers to find the home of their dreams from thousands of miles away.
Augmented Reality Staged Homes
Many people move out of their homes before putting them on the market, which means real estate agents are tasked with the job of selling a vacant home to buyers. But buyers often have a hard time visualizing what furniture will look like in a vacant home, which is why these homes are often harder for real estate agents to sell.
In the past, the only way to overcome this challenge was to invest in furniture staging, which can cost a real estate agent thousands of dollars. But real estate agents now have a far less expensive and more convenient option: augmented reality staging.
Augmented reality is a type of technology that projects digital images onto a real world environment. In the real estate world, this technology is often used to project digital images of furniture onto various rooms of a vacant home.
Augmented reality technology allows real estate agents to digitally stage vacant homes using digital images of a wide range of furniture. This way, buyers no longer need to make an effort to visualize how the home will look with furniture. This technology makes vacant homes more appealing to buyers and easier for real estate agents to sell.
There are a number of tools that real estate agents can use to digitally stage listings. Some tools will only work with vacant homes, whereas others can be used to digitally replace unattractive furniture in listing photos. There are even tools that connect real estate agents with professional designers who will help them choose the right digital furniture to add to a room.
Personalized Searches For Homebuyers
Technology has completely changed the way that buyers search for homes. Buyers used to initiate the search for a new home by contacting a Realtor® for help. But now, the vast majority of buyers start the process by looking for properties online.
This means that real estate agents may or may not play an important role in helping buyers find the home of their dreams. Instead, real estate agents may not even be contacted until a prospective buyer has found a home that they are interested in seeing in person.
Artificial intelligence technology has also made it easier for buyers to quickly find homes that meet their unique needs. Artificial intelligence, or AI, is technology that allows machines to think like humans and emulate their actions. This type of technology is used to power algorithms utilized on real estate websites and mobile apps.
AI-based algorithms are used to predict human behavior and customize the user experience on real estate websites and mobile apps. Real estate websites and apps use these algorithms to personalize search results for prospective buyers.
In other words, this technology is used to ensure that buyers only see listings that they would be interested in when searching on a real estate website or app. The algorithm analyzes the buyer’s past behavior to determine the most relevant listings.
This technology makes it easier than ever before for buyers to find their dream home without the help of a real estate agent. If the algorithm works the way it is intended to, buyers won’t need to browse through hundreds of different listings to find the perfect home.
A real estate transaction is not complete until it has closed. At a closing, the buyers and sellers sign paperwork that officially transfers ownership of the property. In the past, the parties that were involved in the real estate transaction had to meet in-person to complete this part of the process. But thanks to technology, many title companies now offer clients the option to close on a property remotely.
The term “cloud computing” refers to the storage and delivery of data over the internet. A number of industries have relied heavily on cloud computing over the years. Now, the real estate industry is finally starting to utilize this technology to simplify the closing process for buyers and sellers.
Cloud computing allows buyers and sellers to complete closing tasks remotely. This way, they can complete these tasks whenever it is most convenient for them. There’s no need to go through the hassle of working with the other parties to schedule a closing time or spend hours signing paperwork in a title agent’s office.
Taking this process online benefits Realtors®, too. Real estate agents no longer need to spend huge chunks of their days at closing appointments. As a result, they will have more time to focus on generating new leads and helping other clients.
This technology is also useful for record retention. Real estate agents are legally required to retain closing paperwork for a certain number of years. But few agents have enough space to store physical copies of these records. Fortunately, that’s not an issue anymore since agents can store paperwork on the cloud instead of in their filing cabinet.
Smart home technology refers to home devices that connect with one another via a shared network and offer some degree of automation or remote control.
For example, homeowners with smart lighting systems can adjust the brightness of their lights or turn the lights off and on from an app on their smartphone or tablet. Homeowners with smart locks on their front door can remotely give a dog walker or house cleaner access to their home without having to hand out copies of their keys. These are just two examples of the many different smart devices that are used in homes today.
The emergence of smart technology has impacted the real estate industry. Because smart technology makes daily life at home easier and more convenient, a growing number of buyers are looking for homes that are built with smart devices.
Realtors® must understand the basics of smart home technology so they are capable of talking to buyers and sellers about it when listing or showing a home. They must also understand the impact that smart technology can have on a home that is for sale.
In general, being equipped with smart technology will not drastically increase the value of a home. But smart homes tend to hold value longer and sell faster than homes that are not equipped with this technology. Realtors® can use this information when advising buyers who are looking for smart homes and sellers who are listing smart homes.
Technology has already started to reshape the real estate industry. So far, technology has made it even easier for buyers and sellers to complete real estate transactions. As the industry continues to embrace new technologies, it’s safe to say that the way real estate works will keep evolving over time.