The digital transformation of real estate

real-estate-open-house

Take a look at the LinkedIn profiles of the top executives in the major real estate chains. You won’t be surprised that they didn’t grow up wearing a gold Century 21 blazer. Not unlike what Uber did to transportation and Amazon did to retail, the real estate industry is now leveraging a digital backbone to drive the market.

We experience this trend in real estate peripherally with Airbnb as we search for short-term vacation or business rentals. But the real transformation is occurring in residential real estate, where millions of digitally savvy millennials have high expectations for the sales experience based on other online consumer business models.

Like Google, the online real estate database Zillow has become a verb. Millions of young digital natives “zillow” their house to see its estimated value or spend hours “zillowing” neighborhoods to find homes that may meet their budget.

One aspect that will remain retro despite transformation is the house visit. But in order to remain competitive, everything leading up to it and many post-visit interactions will depend on engaging digital experiences.

In fact, some of these new national real estate firms look at themselves as real estate software companies that happen to also sell houses through their local agents and franchises. They look at the old multiple listing service (MLS) as an aging relic in a world where online interactivity is king. Competitive advantage will be based on a high-octane CRM platform amplified by artificial intelligence to unearth insights about seller and buyer patterns.

Digital brokers

One firm leading the movement of brokerages developed as digital from the get-go is Compass. Its key management team members are alumni of such digital powerhouses as Twitter, Microsoft, Spotify and Amazon.

Compass sees the digital experience extending to the for-sale sign on the lawn. These solar-powered signs can remain illuminated 24×7 so that prospects can notice a property after dark.

Firms like Opendoor are designed to skip the traditional listing process by simply buying your house online. The company says it makes “a competitive offer to purchase your house so you can skip the hassle of a traditional sale. That means no stressful showings, no exhausting prep work, and no stressing over whether your buyer’s financing will fall through. You even get to choose your close date.”

Its technology platform also includes a “trade-in” service that allows sellers to eliminate the gap between the sale of the old home and moving into a new home.

What does remain the same is that Opendoor still sends a team of appraisers to the house to confirm the value.

In discussing such platforms with me, a real estate contact pointed out that these online-only transactions are interesting and create the illusion of friction-free selling/buying. But where the seller gets the best value is with people milling around at a showing or open house, creating the impression of high demand and thus higher price. That said, she feels these platforms could be good for foreclosures or distressed properties.

Digital engagement

Chatbots have become an important customer engagement tool, and real estate is no different. Many see chatbots being able to do the preliminary home seller and buyer vetting process to make the initial discussion with a human agent much more productive. One agent used Facebook messenger to maintain a chatbot conversation with a client until such time human intervention was required.

Augmented reality has gone through many permutations over the past 10 years in many industries. In many cases, it seemed to be eye candy in search of utility. However, younger generations’ more intimate relationship with virtual and augmented reality is changing the landscape for real estate firms.

Some of the most interesting applications, like Sotheby’s Curate, are focused on “digital staging.” In the real world, sellers rent attractive furnishings to place in the home prior to sale. In the digital world, these furnishings can be tailored to the buyer’s liking on an app. On Curate, if you want modern furnishings while you’re walking through the listing, click here, if you like traditional furnishings, click the next box and watch the room change.

On a “higher” level, the use of drone technology to give buyers a 360-degree view of the property from above seems to be gaining traction to increase engagement and time spent on real estate agent sites.

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