The real estate industry has seen major changes over the past two decades as a result of new technologies.
From e-signing documents to listing websites, if you're a real estate agent or you've bought a home recently, then you've no doubt experienced some of these technological innovations firsthand.
Searchable property sites have also transformed how prospective buyers find homes. In fact, many people now use such sites to make a short list of the properties they're most interested in, giving MLS a run for its money.
But the groundbreaking real estate technology doesn't stop there. Innovations such as aerial drone videos, 3D virtual tours, and virtual staging continue to rewrite the rules when it comes to home sales.
Read on to learn more about these cutting edge tools and their impact on how people will buy and sell homes in the years to come.
1. Automated Valuation Models
Like other industries, technology for realtors will continue to increase efficiency and turnaround time, especially in terms of the real estate cycle. Automated valuation models (AVM) represent an important part of streamlining this process.
AVM uses mathematical modeling coupled with a database to provide real estate property valuations quickly. This revenue and expense data can be obtained in a matter of seconds and then used to analyze how advisable a deal looks.
AVM not only cuts down the time it takes to analyze a potential real estate deal and make a decision, but it also represents a fairer, more accurate approach to the evaluation process.
AVMs usually include:
- A comparable sales analysis of similar properties
- A market value for properties across the US
- A property's recent sales history and other important information
- When available, a tax assessor's indication of property value
Leading institutions, investment professionals, and appraisers alike already use AVM technology to analyze properties.
More Objective Property Valuations
By removing the human element from the equation, AVMs mean objective reports without underlying bias. They rely on two evaluation types, a repeat sales index, and a hedonic model.
They also incorporate a variety of data including:
- Historical house price movements
- Property characteristics (e.g. property improvements, number of bedrooms, number of bathrooms, and etc.)
- Previous survey valuations
What's more, the results get analyzed, weighted, and reported as a final estimate. These safeguards help mitigate the potential for fraud risk. Finally, AVMs prove affordable and easy to generate.
2. Aerial Videos
Video drone technology continues to take the country by storm. In fact, it's forecasted to be a $100 billion market by 2020.
While Amazon and Pizza Hut have yet to start delivering products using this technology, drones are making a huge splash in the real estate world. And with good reason.
Aerial videos allow you to showcase the highlights of given properties including expansive land holdings, multi-story buildings, and other onsite buildings.
Besides highlighting what's available on a given property, aerial videos can also let potential customers see what's nearby in terms of schools, attractions, recreational areas, and other amenities.
How to Make Aerial Videos Work For You
Skillful aerial videos require professional editing for the best results. A company who specializes in drone property videos will also be able to edit them for enhanced impact.
They'll look at things such as:
- Object removal
- Color correction
- Sky replacements
- HDR merging
What's more, drone video technology proves widely available, so you don't have to wait. You can begin using it today. Agents who include aerial videos of the properties they sell see faster sales, and so should you.
3. 3D Virtual Reality (VR) Tours
If you think 3D virtual reality property tours sound like the stuff of science fiction, think again. By 2020, the virtual reality market will reach $21.5 billion, and the real estate industry will act as a prime mover for this.
In fact, Sotheby's International Realty has already started experimenting with this technology. Using Samsung Gear VR technology, they are showcasing a select group of luxury residences in New York City and Los Angeles.
The cost of scanning each home currently runs between $300 and $400 for most vendors, which proves cost prohibitive for all but the most high-end properties. However, Hommati has pacakages available that is much more affordable than this. This technology will become more popular and attainable over the next few years.
VR Will Change the Real Estate Industry
Selling luxury homes represents a unique process. Many change hands without the buyer ever seeing the property in person. But VR allows them to get a "feel" for the place even when they don't have the option of setting foot on the property.
What's more, Michael Pachter, Wedbush Securities analyst, believes that VR's real estate potential represents one of the driving forces behind Facebook's acquisition of Oculus VR for $2 billion in 2014.
It may still be 15 to 20 years before individuals start purchasing homes based solely on VR, but the technology will continue to improve by leaps and bounds during the next couples of decades.
4. Augmented Reality (AR) Tours
But what about showing off an unfinished space or home that has lots of potential but could use some work? That's where augmented reality technology comes into play, and it represents another powerful real estate tool of the near future.
What is AR, and how could it be used in the real estate world? One great example of AR today comes from the pop culture world, Pokemon GO. With Pokemon GO, you use your smartphone or android devices to search for Pokemon creatures.
How does it work? It relies on mobile device GPS to find, catch, fight, and train virtual creatures. All the while these imaginary creatures look as if they inhabit the player's real-world location.
The Potential Real Estate Benefits of AR Technology
How could this benefit real estate transactions? Imagine giving your clients the capability of augmenting an unfinished space so that they can see what it'll look like with furniture, different paint, or a renovation. That's the future of AR.
It will help clients to visualize the potential of a space. Real estate companies will also use AR to present spaces tailored to each of their customer's desired lifestyles.
By helping clients see the potential of a place, individual properties will spend less time on the market.
5. Virtual Staging
95 percent of home buyers now search online before buying a new property, and of those, 89 percent of buyers found online photos very helpful in determining their interest in a potential property.
That's why virtual staging represents another groundbreaking technology that will revolutionize how realtors "show" properties online.
Instead of having to hire professionals to come out and stage a home, you can virtually add furniture, rugs, and other accessories. These digital touches will enhance the appearance of a potential property.
Work with Professionals who Craft a Realistic End Product
But here's the caveat. The virtual staging must look impeccably realistic, or it can actually harm how well the property performs. Fortunately, today's technology continues to improve.
In fact, some current VR staging appears surprisingly realistic, especially when you go with a trusted company. Down the road, look for the technology to continue to improve, allowing real estate companies to show a property off to its best advantage.
The Changing Face of Real Estate Technology
As you can see, cutting edge technologies will continue to change how realtors do business. From the objectivity and convenience of AVMs to truly "out-there" technologies such as 3D VR tours and AR tours, real estate will never be the same.
These innovations might sound overwhelming. But they represent exciting new tools that realtors can use to engage with clients and provide them with exceptional customer experiences.
Of course, they also come with learning curves. Some of them prove quite steep. So, don't try to go it alone.
Instead, work with professionals who have experience and expertise using these innovative technologies. That way, you and your real estate company can hit the ground running.
More Changes on the Horizon
Artificial intelligence and new real estate apps will also have an increasing impact on the industry.
Look for other trends such as automation, too. This applies to everything from social media and emails to online chat.
These automations will free up more time for realtors to focus on effective communication, management, and company growth.
Robots will also make their debut as we move forward. From virtual assistants to chatbots and real estate robots, get ready for the introduction of Siri-like technology into homes for sale.
That way, customers will be able to ask and receive answers to their most frequently asked questions. Robots will also help out with things like scheduling appointments and scouring the internet for new listings and property news.
Want to Learn More?
Do you want to learn more about the future of real estate technology? Or, maybe you're ready to start capitalizing on some of these technologies but don't know where to start? You don't have to go it alone.
Let us help you implement these innovations and streamline your real estate purchasing cycle. You'll also see more listings in the process. Find out more about how to sell homes faster and for a higher sales price.