Why fix it if it isn’t broken? For decades, that has been the perspective on time-honored practices in the real estate industry. A listing is published. Then, interested buyers call an agent to schedule a showing, and from there you have the back-and-forth of offers, acceptances, and contracts via phone or in person in an office. Those practices have been not only commonplace but also effective for brokers, sellers, and buyers alike. Nonetheless, technology is weaving its way into real estate at a rapid pace as professionals seek new ways to streamline the sales process. Therefore, looking at technology’s role and impact gives us a better idea of the future of the real estate sector.
Impact of Technology on the Buying and Selling Process
In 2020, according to a report from Oxford University, 53% of real estate companies were redirecting their revenue towards investments in technology. In 2019, 42% of digital real estate businesses were taking a second look at Smart Building technologies as reflected by a poll conducted by Statista. Thus, when you factor in the safety measures and the sudden drop in face-to-face interaction during the pandemic, you can imagine how much of a significant role tech played in making a sale. In fact, 2022 saw 96% of buyers visiting real estate websites with 60% of that same group utilizing a mobile app.
Consequently, agents and brokers responded to this ever-changing trend by investing more in mobile app and web development or employing existing platforms, like Zillow and Realtor.com, to advertise properties and communicate with sellers and prospective buyers. Likewise, some are opting to utilize cloud tech to store and analyze big data to fine tune their sales strategies.
Benefits of Technology for Real Estate Agents and Brokers
As you can see, the latest technology can give an added edge to the process of making a sale. As mentioned, agents and brokers can take advantage of the analytic tools that are available to find and engage more prospective investors in a shorter time span.
In addition to the analytics, real estate professionals who engage with their potential clients on social media platforms have an added advantage. An effective sales funnel strategy that involves social media offers better chances of generating sales as compared to the business that doesn’t use such platforms. As a matter of fact, businesses that use these platforms are 78% more likely to generate sales than their counterparts who have no social media presence according to research. This observation makes a lot of sense when social media offers multiple functions that involve communication, advertising, and analytics.
All in all, when you combine the aforementioned tools with Sales Force Automation and CRM technology, you have an agent or broker who is already several steps ahead of the competition because they are spending less time on minute management tasks and more time with their clients throughout the entire sales process.
The Future of Technology in Real Estate
It’s safe to say that tech is here to stay. Currently, virtual 3D tours and videos have become widespread practice along with the traditional photos of a property. In the future, however, we can anticipate seeing more financial and scheduling tools, more features that provide updates and alerts, along with robust filters to facilitate more efficient searches.
Going beyond the current practices of utilizing social media, optimizing websites, and leveraging analytics applications, don’t be surprised if blockchain technology comes into play. Buyers may lose patience with the mortgage application process, and sellers may not want an outside party to interfere with a quick sale. So blockchains might overcome some obstacles that get in the way of sellers and buyers connecting while providing transparency for both.
Likewise, digital documentation and paperless transactions could become the norm which would further enhance the user experience for both buyers and sellers. This could also cut down on the amount of travel when the two parties don’t live in the same city or province. Plus, this would allow for a closing to take place without the restriction of business hours if necessary.
Challenges and Limitations of Technology in Real Estate
Along with numerous benefits, technology in real estate comes with its unique set of challenges–one being security. A data breach can unravel any business’s reputation in just a matter of seconds.
Another potential issue relates to less in-person interaction and what that could also mean for an agent’s credibility and the customer’s comfort level. As an illustration, a segment of the senior population who is looking to downsize would opt for a more “traditional” manner of searching for and buying a smaller home. Plus, if an agent all but forgoes the capability to readily communicate in person, then he or she may have to deal with inadequate bandwidth in the regions where potential clients reside. In other words, agents and brokers can’t just limit their reach to urban zones since some properties are located in rural areas.
Also, the time it takes to integrate new technological aids into your current business system might pose a challenge. Two common questions involving this integration include: “How will this affect my daily operation and for how long?” And of course, “Will my employees buy into such a big change?”
The answers to these questions and solutions to possible problems with technology remain to be seen.
Overall, brokers and agents have prime opportunities for growing their business by striking a balance between technological advances and standard practices that have proven to be effective. Nonetheless, making these changes can enhance the experience for all parties involved with the sale.