How Technology Is Changing the Real Estate Market
Despite many industries having remained afloat with the current changes in technology, the real estate industry is yet to realise any notable standards. The distinction is perhaps due the fact that real estate stands out as the largest commodity the world over, with approximately $217 trillion valuation. Real estate technology shifts have the potential to revolutionise the industry.
A great deal of big players in the industry are still building and advancing their enterprise technology solutions. Some are incurring a fortune in consultation for bespoke services and applications. This phenomenon has been evidenced before in other industries, where everyone desires to reinvent the wheel. However, history renders wheel reinvention almost always unnecessary since it leads to further fragmentation, consequently making industries less competitive.
Time for An Industry-Wide Upgrade
Though more industries that are technologically matured have experienced a paradigm shift from a restricted-use model much earlier and adopted an outsourced consumption model, such as the use of cloud applications via AWS, the real property industry has not. The consumption model presents a variety of benefits, including being more cost-effective and permitting businesses to concentrate on their core business function while staying ahead of innovation.Besides taking advantage of the cloud and adopting the consumption model, the real estate industry has been slow in adopting applications necessary to transform the sector. Real estate technology is readily available but until present, the desire to shift from the conventional way of operation has been sporadic.
Following are technologies that are poised to become mainstream in the space of real estate and revolutionise the industry as a whole:
1. Virtual reality
Virtual reality is one of the most prevalent application among businesses and consumers and is customised for the real estate sector. Savvy realtors are already leveraging in this application by moving beyond photos and 360-degree video to offer their clients with 3D virtual property experiences right on their appliances. There are various categories of 3D aggregators available in the market today but are still in their early development days for the real estate.Matterport is one of the major players in this category that incorporates videos, VR and photos to enable users to peruse through floor plans via digital means.
2. The cloud
The cloud is a platform with a myriad of impact, especially on the closing process. If you have ever bought a real estate, you definitely know how long, the process is. However, the emergence of the cloud and better applications for data management has significantly simplified the process for both residential and commercial buyers and reduced it to electronic signatures. The practice that could last for weeks or months is now possible in a matter of days.An enterprise that has taken this problem solving a notch higher is PEXA, Private Exchange Australia, which is a property exchange network with online presence. PEXA helps clients such as financial institutions and lawyers to transfer the relevant paperwork to the land registries while permitting them to undertake financial settlements in a digital way.
Nowadays, blockchain receives a lot of attention, a great deal being from bitcoin among other cryptocurrencies. Certainly, cryptocurrency forms part and parcel of transactions in the real estate sector but blockchain’s efficiency, transparency and security innovations are a major concern for real estate sellers, buyers and renters. They are the benefits and advantages that will enable the estate industry to standardise and boost online transactions.
2016 presented the right time to do something regarding this market innovation gap and I embraced the chance by founding ShelterZoom, alongside Allen Alishahi, a savvy real estate investor. We felt that the market problems were not readily solved, this notwithstanding the fact that the estate space had a variety of companies at different phases of providing blockchain-based solutions, such as ATLANTA and Imbrex.
Consider the real estate transaction process from the renter or buyer’s perspective- the process becomes a mystery upon making an offer. Consumers are unable to track the offer in a transparent way. Many consumers assume that sellers are being mischievous and opaque on purpose. The entire practice is thus confusing and troubling, given that the transactions entail private information such as, offer terms, and bank statements.
Is Real Estate Ready for Blockchain?
All the three technologies considered, blockchain is certainly the latest on the scene. Despite all the fuss about it, blockchain is not the best choice for many transaction cases. This is evident at the low-end of the procurement spectrum- clothes, shoes among others at Starbucks aren’t practical for this type of technology.
For block chain to be used, the following criteria to be satisfied:
• An exchange of information between or among multiple parties
• High level of privacy must prevail
• No possibility of tempering of facts, information, terms or evidence by other parties.
• Data security
• Transparency, verification and audibility.
Compared with other sectors, the real estate still has a long way to go as far as technology innovation and adoption is concerned. While the industry is slowly incorporating more applications for blockchain, VR and the cloud, such platforms were already in existence as ideas in the real estate sector a decade ago. As real estate technology rolls, home buying will never be the same again.
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