Innovators, disruptors, and productivity enhancers: technology is persistently creeping into the real estate market. In the last 20 years, technology has transformed our nation’s economy, providing innumerable opportunities as well as some threats to real estate brokers.
For this reason, brokers must adapt with the emerging technology if they want to stay in business. The commercial market is perhaps slower than the residential market to adopt new tech, but nonetheless, successful brokers don’t waste time on outdated strategies.
CREtech identifies the four major areas where technology has affected real estate: mobile search, automation, chatbots, and big data.
Mobile Search – Across all markets, 58% of property buyers start their search on a mobile device. This carries huge implications for online marketing, as it demands simplicity and mobile-responsive web designs. This may also affect the agent-facing documents (i.e. MLS and other information resources), as virtually all real estate agents rely on their smartphone for quick access to property data.
Automation – With familiar software such as DocuSign, brokers, agents, and property managers are able to streamline workflow by automating many processes. New websites and applications are emerging every year, each offering a solution to one of the many time-consuming tasks Realtors face.
CBInsights mapped over 100 of these new rising companies in real estate tech, shown by the graphic below.
Chatbots – Responsive AI technology designed to answer user’s questions via direct message are becoming increasingly useful for large brokerages. Applications of chatbot technology could include answering frequently asked questions or providing clients with property information while you’re out of the office. This may not seem like a game-changing technology, but the application of AI to database searches has huge potential.
Big Data – Real estate companies have access to large amounts of information, and data aggregate technology could use historical data to make market predictions and save companies from making costly decisions, according to the CREtech article. This tech is particularly valuable to large brokerages with high turnover, and may be of use to economists studying the market at large.
Disruptors have also taken hold in the real estate market, with companies such as Redfin and Zillow luring sellers into listing without an agent or with a partial-service agent. These companies have been around for nearly 15 years, and although they boast a combined 42 million unique users every month, neither company has shown they are a true disruptor to the industry.
Redfin continues to occupy less than 1% of the market share (0.83% as of 2019Q1), while Zillow appears to be providing more leads than threats to both lenders and real estate agents. Both giants are still major national players, but most clients still opt to trust full-service brokers to sell their homes.
Julian Hebron from Housingwire.com puts it this way: “The only threat to lenders and Realtors is ignoring Zillow.”
How we can respond
Whether you’re up on the latest property management app or just now using e-signatures for the first time, technology integration is inevitable if you’re to remain competitive in the real estate market.
As of now, it looks like the leading disruptors have yet to become major threats, as long as real estate brokers continue to provide quality, personalized service to their clients.
Take another look at the market map above, or keep an eye on these 20 up-and-coming PropTech companies to stay informed–and possibly leverage these technologies for your business.
Wondering how you could enhance your business or transaction process? Unsure about what’s next for your investment? Reach out to Peter Maclennan by phone at 925-385-8798 or email at firstname.lastname@example.org for a consultation.