During the Covid pandemic, quarantine restrictions and social distancing have forced every industry to opt for a digital way of doing a business. Real estate has been no exception. The sector, which was historically resistant to innovations, had to adopt new technologies in order to survive. Tech solutions have altered many real estate processes, starting from apartment matching to home selling, transforming how property is sold, purchased, rented, and managed.
JatApp has more than six years of experience in developing tech solutions for real estate. In this article we’ve prepared answers to the most common questions to give you a better idea of what’s currently happening to the real estate market. We will also deep-dive into cases of the real estate giants that have disrupted the market with innovative digital products.
What was the main driver for real estate technology?
The rise of real estate technology can be traced back to the times when data became available for public use. Instead of obtaining real estate data the old way by going to local offices, businesses could simply find all information online, from title documents to mortgage liens.
However, as real estate businesses wanted to use more information to win the market competition, it had become challenging for them to store and analyze it in the most efficient way. Real estate tech solutions have become a logical step for property businesses to generate, track, and utilize massive amounts of data.
Access to data has transformed the way the real estate business is being run and the services that industry players offer. Now, many real estate agencies rely on big data technology to predict clients’ behavior, evaluate properties, anticipate market trends, foresee price fluctuations, and so on. An on-point example here is Opendoor. The real estate platform heavily invests in machine learning algorithms to analyze big data in order to offer customers an accurate estimated value of their property.
Opendoor home price evaluator
How has technology changed some of the most common processes in real estate?
Digital solutions have become a real game-changer in the property business, changing even the most common processes, like home selling and buying. To better understand the impact of technology on real estate, let’s compare buying and selling property in the past with the present.
Home selling and buying in the past
Back when no real estate tech solutions were available on the market, buyers and sellers had to take care of many things to make transactions happen. Common steps to selling and buying a property were:
- Preparing a house for sale. To ensure a fair price for a property, the seller needed to clean the house and do repair works if necessary.
- Finding a real estate agent. The next step was to find a real estate agent to sell the property. The client could also use the agent’s services to find a new place.
- Finding a mortgage lender. Mortgage lenders offered the buyer a loan to finance their purchase.
- Purchasing insurance. Paying for home insurance and title insurance was another important step that helped the buyer to avoid any real estate issues concerning property damage or ownership.
- Finding a moving agency. The buyer needed a moving company to pack and transport their belongings to the new place.
- Aligning move-out and move-in dates. Homebuyers usually had to sell their old property before purchasing the new one because they might simply lack money to pay for the new place. Once the person had sold their real estate, they needed to look for temporary housing to live in until they could finally move into a new home.
Home selling and buying in the present
Thanks to technology, buyers and sellers can now pay one company for handling all transaction issues mentioned above. What’s more, real estate companies manage the timing of all steps, making the process of moving from one home to another smooth and hassle-free.
Real estate platforms, also known as iBuyers, rely on technology to help a customer quickly close on an old home or/and find a new place that matches their requirements. With a well-established iBuyer, like Opendoor, customers have seamless real estate transactions that consist of the following stages:
- Providing the details on the home. Opendoor asks the customer to enter the information related to their property on its website. Based on these data, machine learning technology determines the market price for a property.
- Accepting the cash offer. If the client accepts the offer, they take the cash and can purchase the next home. The customer doesn’t need to clean or fix anything, as Opendoor does all the repair works for them. When the house is ready for sale, the iBuyer resells it for a higher price than it was purchased.
- Searching for a home online. Opendoor offers clients access to home listings. The platform has filtered search functionality that enables the homebuyer to find a perfect match without scrolling through thousands of listings.
Opendoor filtered search functionality
- Moving out when convenient. The company allows the client to schedule the moving-out date that works best for them.
As you can see, emerging technologies in real estate have made buying and selling processes more efficient, yet easier and far less time-consuming for a customer. Once you know how technology has altered the industry processes, you may now want to learn what real estate trends accelerate technology adoption in 2022.
What trends drive the adoption of technology in the real estate industry?
The current pandemic has created a favorable environment for rapid advances in real estate technology. Property businesses that are aware of the key trends shaping the industry will be able to adjust their business models when a new disruption inevitably occurs. Let’s discuss some prominent trends fostering widespread technology adoption.
Social distancing regulations have made on-site visits challenging
During the Covid-19 pandemic, the demand for safe real estate transactions has made on-location visits outdated. In the past couple of years, 90% of sellers wanted to reduce the number of visitors in their houses. Today, home listings with 3D tours attract twice as many viewers on real estate websites. Virtual tours offer a safer yet more efficient way to sell and buy a property, ensuring that homebuyers get a lifelike experience as if they had actually paid a visit to the location.
Visual 3D tour example
Covid-19 has made it hard to prepare homes for sale
According to the National Association of Realtors, 82% of brokers believe that home staging makes it easier for homebuyers to envision the space as their future home. But these days, physical home staging can be problematic due to the Covid-related restrictions. As a result, the use of virtual reality has become an absolute necessity for many sellers. Virtual home staging services offer simulated interior design solutions to feature the space in the best possible light. Besides, it’s a more cost-effective strategy than conventional staging that presupposes the work of photographers, real estate professionals, and decorators.
Virtual home staging example
The competition for bigger houses is getting fierce
Today, people need more spacious houses, with the work-from-home policy and online schooling becoming the new norm. Square Yards research shows that 37% of buyers think that the size of homes is extremely important for them because of the pandemic. Houses that come with three bedrooms, hall, and kitchen had a 150% surge in demand since the beginning of the last year. As large properties usually receive multiple offers and are sold very fast, buyers need to compete over the houses they love. Online house hunting platforms like Zillow and Trulia keep users updated on the new listings, allowing them to quickly find homes that match their needs.
In 2020, millennials purchased houses more than any previous generation, comprising 37% of all real estate buyers. Despite all challenges caused by the pandemic, they also accounted for 53% of primary home mortgages in April of the same year. Nearly 60% of millennials who own real estate found their properties online and about 40% of them are ready to buy a home in online marketplaces. Given that millennials feel comfortable using technology for home searching and buying, the mass adoption of digital real estate solutions won’t slow down anytime soon.
In what ways does technology change real estate?
As technology adoption succeeds, more innovative solutions are emerging to change how both real estate companies and their customers are approaching the property market. Some of the key disruptions that the industry has witnessed include real estate crowdfunding, online home listings, e-signature services, and mobile apps.
Real estate crowdfunding
Instead of simply taking conventional real estate investing and offering it digitally, crowdfunding platforms create a whole new experience for their users. People no longer need to invest large amounts of money, as long as a real estate project is funded by a large pool of investors.
Some new platforms like Concreit are making it their mission to allow anyone to fund the project by pooling their money online. The solution lets people invest in real estate for as little as $1 right from their smartphones.
Concreit app functionality
Real estate platforms make it easy for anyone to access home listings and see what properties are available for sale. Along with 3D tours and home descriptions, websites offer other important details, such as crime statistics, school ratings, tax and purchase history, and so on. Users can also benefit from a satellite view to see how close their future home will be to a shopping mall or highway.
Nomad Homes is a tech startup that matches properties with homebuyers, offering a customized user experience. The solution invites buyers to have a ‘‘style quiz’’ so that they don’t need to navigate through numerous listings to find their dream home.
Nomad homes ‘‘style quiz’’
An electronic signature has been around for a while, but the coronavirus pandemic has led to its extensive implementation in real estate. E-signatures allow companies to replace handwritten signatures, making every stage of the transaction safe for all parties.
Many real estate businesses use platforms like Adobe Acrobat Sign to perform transactions with multiple parties within a single click. The solution enables real estate agents to edit PDF contracts and manage electronic signatures in one app.
A PDF contract and electronic signature in Adobe Acrobat Sign app
Real estate mobile applications get millions of visits due to the convenience they offer with notifications, on-the-go searches, real-time communication, and so much more. It’s no wonder that 76% of buyers use smart devices when searching for their new place. Mobile apps change not only the way people look for houses but also how they manage both residential and commercial properties. More specifically, the use of apps significantly facilitates daily interactions between tenants and property owners or employees and property managers.
As an example, JatApp assisted a tech company from Denmark to build a mobile application that encourages employees to report near-misses at their workplace. A near-miss incident refers to any unexpected event, like spilled water or lit cigarette on the floor, that may potentially lead to illness, damage, or injury. The app has team-building features and gamification functionality to aid in cultivating the culture of safety and managing the workspace in the most efficient way.
Near Miss Reporting App functionality
Digitize your business with JatApp
Digital solutions have revolutionized countless real estate businesses and their adoption is growing at an increasingly rapid pace. In the past, each disruption was introduced slowly so that people could get more comfortable with the new way of doing things. The coronavirus pandemic forced real estate companies to quickly adapt to tech innovations to remain relevant and stay afloat. The future of real estate technology also seems optimistic. Challenges caused by Covid-19 continue to fuel the technology advances that help keep people safe and satisfied.
JatApp assists real estate companies in integrating innovative digital solutions that increase client retention by up to 10%. Since 2015, our developers have delivered more than 200 high-quality projects that have a client satisfaction rate average of 99%. With us, you can cut your development costs by up to 60% if compared to the markets in North America and Western Europe.
If you’re interested in digitizing your business with us, drop us a line and we’ll get back to you soon to discuss project details.