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As with most industries, technology trends have changed the real estate landscape, and there is more to come. It’s not just that paperless transactions are now the norm. 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.
The first signs of significant changes are already ahead in how real estate transactions are conducted. Customers now have greater access to information, which has made their expectations different from 10 years ago. If you want to stay ahead of the curve, here are the trends to watch for in real estate. Below are some of the most interesting ones.
How Will Technology Change the Real EstateHow Will Technology Change the Real Estate
BlockchainBlockchain
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 led to 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. It slows down the transaction and makes it more expensive. Real estate transactions require many intermediaries, such as banks, governments, and credit card companies. We can expect blockchain to make the following big changes in the real estate industry soon.
TokenizationTokenization
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 uses cryptocurrency to split assets into tokens that t are stored on the blockchain. It 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, you can read the story on how investors scooped up the Regis Hotel in Aspen for as little as $10,000.
Smart ContractsSmart Contracts
Housing transactions typically require many intermediaries, but that may change with smart contracts. Through these, the deal can be entirely between the buyer and seller without intermediaries. 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 mean 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.
Property TitleProperty Title
Title insurance is a massive industry with mountains of data stored digitally or on paper. Blockchain allows it to decentralize all this data and free up time and money. It may even eliminate the need for title insurance. However, putting all titles on the blockchain would be challenging and expensive. It will be interesting to see in the years ahead if any government, corporation, or a combination of both are willing to undertake it.
Virtual RealityVirtual Reality
Virtual reality is an application fast becoming popular and tailor-made for real estate. Fast-thinking realtors now go beyond photos and 360-degree video tours and offer their clients VR tours. Buyers can now get a real sense of a property’s proportions, 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.
The CloudThe Cloud
As anyone who’s purchased real estate knows, the process 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 can exchange information instantly and create much more comprehensive reports.
Some things will never change.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.