As with most industries, technology trends have changed the real estate landscape, and there is more to come. There’s no doubt that many of the changes in recent years have been beneficial in streamlining transactions. But many agents agree that technology can be a double-edged sword. Heavy reliance on technology can create problems in people-orientated businesses. There’s also a real fear of losing touch with customers. It’s not just that paperless transactions are now the norm.
Customers now have greater access to information which has made their expectations different from 10 years ago. Already, the first signs are appearing of significant changes ahead in how real estate transactions are conducted. Below are some of the most interesting ones. If you want to stay ahead of the curve, here are the trends to watch for in real estate.
How Will Technology Change the Real Estate
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Just as the internet has revolutionized how we communicate and exchange information, blockchain is poised to redefine how we make transactions. It first appeared about ten years ago as a way to support cryptocurrencies such as bitcoin. But since then it has grown to be much more. It’s now lead to the creation of hundreds of new companies and billions of dollars in investment. There’s a lot to it, but the main thing to understand is that it now makes it possible to conduct big transactions without going through an intermediary. Real estate transactions require a lot of intermediaries such as banks, governments and credit card companies. This can slow down the transaction and make it more expensive. Very soon we can expect blockchain to make the following big changes in the real estate industry:
Historically, it’s been the case that buyers had to be already wealthy to afford real estate as it takes years before you can liquidate and get your investment back. That’s now changing with tokenization which is using cryptocurrency to split assets into tokens that are stored on the blockchain. This allows people who want to invest in real estate to resell their share on the open market through secondary trading. It also opens up investment opportunities to people in different tax brackets that previously couldn’t. For a recent example of this, you can read the story on how the Regis Hotel in Aspen was scooped up by investors for as little as $10,000.
Housing transactions typically require many intermediaries, but that may change with smart contracts. Through these, it’s possible for the deal to be done entirely between the buyer and seller with no intermediary. The seller provides all information on the property while the buyer provides all the information needed on a 100% encrypted and secure blockchain. However, this shouldn’t be taken to mean it’s the end for real estate agents. Buying or selling a home is still a big emotional decision in which agents can lend a helping hand. It’s more likely that the technology will be used to make agents far more efficient.
Title insurance is a massive industry with mountains of data stored either digitally or on paper. Blockchain now makes it possible to decentralize all this data and free up a lot of time and money. It may even eliminate the need for title insurance. However, putting all titles on the blockchain would be a challenging and expensive undertaking. It will be interesting to see in the years ahead if any government, corporation, or a combination of both are willing to undertake it.
An application that’s fast becoming popular and is tailor-made for real estate is virtual reality. Fast thinking realtors are now going beyond photos and 360-degree video tours and offering their client’s VR tours. Buyers can now get a real sense of the proportions of a property and all from the comfort of their own home. This technology is still in its early days. But we can be sure to see it expand quickly in the years ahead and eventually become the norm.
As anyone who’s purchased real estate knows, the process leading from accepted offer to closing day can be long, frustrating and subject to delays. That’s now changing thanks to the cloud and better data management applications. Digital signatures make everything move faster, and all parties will now get instant notifications as the transaction moves from stage to stage. For instance, a property inspection will now be able to move much faster. Inspectors and agents will be able to exchange information instantly and create much more comprehensive reports.
Some things will never change
How we communicate and do business will continue to evolve, but some things will never change. Even with so much data and remote decision making at our fingertips, people will still want face-to-face interactions. A physical real estate agent will remain vital for guiding clients through the process, providing invaluable local insights and advocating on their behalf. No matter what the future holds, that much will stay the same.