Gone are the days when real estate agents relied solely on the MLS, yard signs, and print advertising to sell properties. Today, tech advancements are revolutionizing the industry faster than you can say “sold”. From virtual reality to AI, these technologies are not just changing how agents work, but also reshaping buyers’ and sellers’ experiences.
How real estate technology is changing the industry
Technology is eliminating inefficiencies, providing new opportunities, and making life easier for everyone involved in the real estate business. Real estate pros can now harness the power of AI to find leads, use virtual reality for property tours, and employ analytics for data-driven decisions.
Meanwhile, buyers and sellers have access to more information than ever before, allowing them to make more informed decisions-especially when it comes to purchasing property. A recent NAR report found that 97% of property buyers start their search online. In today’s digital-driven era, buyers aren’t just using the internet to find their next dream home; they’re expecting to do so. And oftentimes, the first contact buyers have with an agent happens later in the game, after they’ve browsed, clicked, and compared homes online.
Embracing these new technologies isn’t just about keeping up with the competition. It’s about exceeding client expectations. By harnessing the power of digital tools, agents can provide a smoother, faster, and more transparent process for their clients. This level of service is what today’s buyers and sellers want, and what tomorrow’s will demand.
As we take a look at the following 12 technologies that are disrupting the industry, consider how each one could enhance your operations, client interactions, and overall business success.
1. AI personal assistants and conversational chatbots
Artificial intelligence has become a game-changer, with AI personal assistants and chatbots now ubiquitous in the real estate sector. These technologies save realtors from drowning in paperwork and enable them to focus more on closing deals. AI assistants streamline scheduling, respond to client inquiries, and follow up on potential leads with surprising personalization and efficiency. Meanwhile, conversational chatbots offer 24/7 customer service, answering common questions and directing clients to helpful resources.
2. Virtual reality
What happens when a potential client cannot visit a property they’d like to purchase? Just a few years ago, the answer would have been ambiguous. Now, virtual reality (VR) allows clients to take immersive, 3D tours of properties from the comfort of their own homes. This technology saves time and resources for both the buyer and the agent, all while providing a unique and engaging property viewing experience.
COVID-19 pushed this trend into the fast lane for obvious reasons. When agents couldn’t show properties in person, VR stepped in to save the day.
Virtual reality has become especially popular in commercial real estate. Investors usually have specific criteria they’re seeking in properties, such as location, size, layout, or condition, which can often be evaluated through virtual walkthroughs. Unlike homebuyers, investors typically base their purchasing decisions on these more objective factors than emotion. So, a well-done VR tour can provide much of the information needed to make a decision, especially in the early stages of property assessment.
Virtual reality tours are also a great way to get people interested in visiting a property in person. A 3D tour of a luxury listing can spur more interest than a few static photos. It’s like a sneak peek that gets people curious and ready to book an actual visit.
3. Fractional ownership
Fractional ownership of real estate properties is not a new concept, but technologies like blockchain (which we’ll discuss in more detail below) and online marketplaces are making it more accessible to a broader range of investors.
Traditionally, real estate investment required significant capital and was often accessible only to wealthier individuals or institutional investors. Syndication and Real Estate Investment Trusts (REITs) were methods used to pool resources and invest in larger real estate assets. However, these could still be complex and exclusive, often requiring sizable minimum investments.
Today’s fractional ownership platforms have changed the game. They use technology to democratize real estate investing, breaking down high-value properties into affordable, digital shares that anyone can buy. This approach lowers the barriers to entry, allowing more people to participate in the real estate market and diversify their investment portfolios.
These platforms also improve liquidity in the real estate market. Traditionally, selling real estate could be a slow process. But with digital fractional shares, investors can often sell their shares through the platform more quickly and easily, much like they would trade stocks on the stock market.
The advent of blockchain technology has further enhanced this process. Blockchain allows properties to be tokenized, turning them into digital assets that can be easily divided, bought, and sold. This secure and transparent method of recording transactions further simplifies the process of owning and trading fractional shares in real estate.
What if you could build the equivalent of an entire life in the virtual world? It’s a question that has fascinated humanity for decades and one that Facebook’s parent company Meta has strived to answer. The results have been mixed to date, but the potential for real estate in this virtual environment is impossible to ignore.
The Metaverse is, in essence, an entirely virtual world. It can be accessed via computer and virtual reality for users to connect, shop, and play games. Meta is hoping that the business of buying and selling those properties could one day become highly lucrative.
It all works through digital transactions and blockchain-built non-fungible tokens (NFTs). Each virtual property has an associated NFT; once you purchase it, that token (along with the associated virtual building) is yours. You can now rent or lease out the property or sell it at a later time for profit.
Currently, most activities in the Metaverse feel like video games, making real estate in the environment more of an experiment than a business. But as more real-world events and transactions move into the environment, the real estate industry may follow. Virtual real estate prices rose 300% over the past four years—so as bizarre as it may sound, now may be the perfect time to invest.
5. Internet of Things
In addition to moving into virtual environments, technology is advancing the industry by bringing connectivity to real-world items. The Internet of Things (IoT) describes the increasingly extensive network of smart devices and sensors that collect information in the real world and store it in the cloud for analysis and evaluation.
While applicable across industries, IoT is beginning to find a home in the real estate industry. Already, 73% of respondents to a recent PwC survey reported current IoT projects that are underway or already implemented. Examples of the technology include:
- Smart HVAC systems dynamically adjust heating and cooling in a home or building to increase energy efficiency and improve the property’s value
- Dynamic lighting systems analyze not just room usage but use real-time natural light data to determine the need for artificial lighting in any room
- Smart security systems allow for monitoring and adjustments remotely from any location with internet access
Smarter properties benefit every part of the real estate ecosystem. Property managers can increase efficiency and security in their buildings. Agents can use IoT connectivity as a core selling point. And investors can use data from smart devices to lessen their investment risk.
The concept has been around for a while, but we’re still only beginning to unearth the potential of blockchain in real estate. At its core, it’s a way to store information in a peer-to-peer network among everyone involved in the technology. Because there is no central storage location, information is inherently secure, and data transfer can be instant.
Blockchain’s most famous application is cryptocurrencies like Bitcoin, but its possibilities go far beyond this one application. Especially in real estate, a few applications are beginning to make significant headway.
For example, non-fungible tokens (NFTs) are digital versions of real-life, physical assets. In real estate, that means being able to buy an NFT that represents a physical property or even part of a physical property. As a result, purchasing that property becomes much more straightforward. Plus, the ability to break one physical asset into multiple tokens means fractional investments with a lower threshold become much more manageable.
Blockchain can also power smart contracts and digital documents that instantly record and distribute agreements between all parties involved. Automated triggers can move the contract along and lock in the parties much faster and more efficiently than traditional paper-based methods that need to be notarized for authenticity.
7. Mobile apps
As real estate buyers, sellers, and investors move into the digital realm, they increasingly use their mobile devices to research and conduct transactions. In fact, more than three-quarters of home buyers used a mobile device in their research process, a number that continues to rise every year.
Mobile apps have immense success potential when leveraged the right way. MLS listings can feed dynamically into a search and display mode optimized for small screens, and these listings can include more immersive videos and virtual tours optimized for mobile users. Push notifications allow real estate agents to keep potential buyers in the loop on updated offers or any next steps needed.
Finally, mobile apps allow data-gathering processes that most other marketing and communications channels don’t. Usage data lets you understand exactly what properties potential buyers are looking at and what information they’re most interested in. Location data provides information about where buyers are when looking for homes and when they’re most likely to engage with you.
8. Analytics and data management
Real estate will always remain a field that relies on experience and intuition. But that doesn’t mean data can or should be ignored. Increasingly, the data gained from interacting with potential and current clients, and the data from the larger market, is helping real estate technology adopters improve their businesses.
You might be familiar with the concept of big data, which describes an ongoing societal trend of data being available for analysis in almost every aspect of society. This amount of information can quickly become overwhelming. But the potential benefits can be immense when you know how to structure it and which pieces of data to analyze. For example, McKinsey research found that machine-learning predictive analytics models can predict rent rate changes with 90% accuracy.
If you know what to analyze, you can create a crucial competitive advantage. There is no standard set of information, so any creative use of data management can set you apart from even the largest brokerages.
Consider the data you can get from your transactions and third-party sources. Determine how that information may influence potential decisions about which properties to work with, which clients to market to, and more. That’s how you can hone in on an analytics strategy to help your business succeed.
9. Lead generation and engagement automation
Because the research phase of real estate transactions increasingly happens online, how real estate agents can generate potential client leads has also drastically expanded. Sure—referrals from past clients and traditional advertising are always a win. But several more innovative lead generation opportunities have emerged and should not be ignored. Examples include:
- Use your real estate website to not just broadcast listings but also prompt audiences to provide their contact information for potential follow-ups
- Use a content marketing strategy designed to draw interested potential clients into your website by offering free, in-depth content in exchange for their contact information
- Use a digital referral network that takes one of the industry’s most established lead-generation tactics into the online realm
- Use a digital ad campaign specifically designed to drive leads to capture contact information directly on the advertising network
Real estate tech has advanced to the point where personalized follow-ups and ongoing engagement have become largely automated. Actions like a new lead submission or saving a favorite property on your website can trigger lead-nurturing workflows, sending emails that provide more information on the topics prospective clients care about most.
10. Advertising automation
Similar to lead nurturing, advertising campaigns are becoming more automated. Many digital ad networks have built dynamic automation opportunities into the campaign setups for their advertisers.
Most digital advertising campaigns run on an auction system. Advertisers set their budget and the maximum amount they’re willing to bid for any click on their ads. When ad space (like a first slot on a Google results page or a sponsored block in Facebook’s news feed) becomes available, the platform determines which ads to run based on the bids from advertisers targeting the relevant audience or keyword. Because the auction happens in a fraction of a second, it’s an automated process, and even advertisers can set their bids to be automated based on their budget.
Advertising automation has also moved into other parts of the digital advertising ecosystem. For example, split testing (aka A/B testing) describes running two slightly different ads against each other to determine which will resonate better with the audience. The advertiser only has to set up the two versions, and the ad platform will automatically split the audience into two random samples for the test. After a pre-determined amount of time or impressions, the winning ad will run for the rest of the campaign.
11. Robotic process automation
Robotic process automation (RPA) describes automating otherwise repetitive and demanding tasks in back-office processing. Real estate can improve processes ranging from document processing to data collection and analysis, calendar-based and action-triggered tasks and reminders, and much more.
In addition, RPA can help landlords onboard new tenants by automating background checks, generating and evaluating application forms, verifying references, and more. Investors can automate the analysis of both existing portfolios and potential opportunities. Automated search functions can help agents and brokerages filter any MLS listings more quickly down to only the options that match clients’ backgrounds and preferences.
The benefits of RPA are significant. Automating most processes happens with an intentional focus on improving productivity. If the computer can handle the more repetitive and time-consuming tasks, you and your team can work on more jobs that are directly connected to excellent customer service. RPA also aims to improve efficiencies by reducing human error in gathering data or accomplishing data-based tasks.
We’re still only scratching the surface of the possibilities that RPA brings. Some of the examples mentioned above, like marketing and advertising automation, are a type of robotic processing as well. The key, as always, is to let the computer optimize and automate what it can so that your valuable human staff can focus all the attention they need on growing the business and its revenue.
12. High-tech devices in the real estate industry
Most of the real estate technology trends discussed throughout this guide have been software-based, but it’s worth examining hardware disrupting the industry. Smart home technology is only the beginning.
Consider, for example, the emergence of Bluetooth Low Energy (BLE) beacons in real estate. With a range of about 80 meters or 250 feet, beacons can act as dynamic marketing devices that showcase details about a property to anyone driving by. But they can also enhance the experience for potential clients examining a property, providing digital opportunities to go more in-depth than an in-person tour could.
Some companies now offer the ability to scan a property in just a few minutes, then use artificial intelligence to create a professional floorplan almost immediately. Devices that make 3D virtual models of the home are increasingly available across the industry.
How will real estate technology help your business?
Make no mistake: the real estate industry has embraced technology at almost every level. The above trends include everything from marketing and lead generation to portfolio management and tapping into the hype in both consumer and commercial sectors.
These technologies can affect how you market your real estate business to potential clients to any degree of your choosing. Regardless of which of the above trends you want to adopt, whether experimenting with virtual reality and chatbots or setting up robotic process automation, Luxury Presence can be the perfect partner for taking your marketing efforts to the next level. Start the conversation to learn how we can help you leverage the power of real estate technology to grow your business.