The state of the real estate market is changing. Now, high prices and a limited supply of homes complicate homebuying in many locations. In the midst of the competitive action, technologies are emerging that further shake up the process, giving would-be buyers and sellers the tools they need to make better real estate decisions.
From financial systems for managing payments to a range of useful property management tools, real estate stakeholders of any kind now have the tech to transform their experience. Overwhelmingly, the nature of this tech disruption is a democratization of information, an opening up of real-time data and property insights for more informed investors.
But how does this ultimately change real estate? And is the disruption good or bad for real estate investors?
As the real estate community pivots to a new kind of marketplace, here are some insights to keep in mind.
Value is going to the online platforms.
In today’s service- and software-based economy, value often favors the online platforms for conducting all kinds of real estate business. From vacation rental tools like Airbnb to listing sites like Zillow, all kinds of informative applications are on the market, putting information directly into the hands of consumers.
In such a market, value naturally begins to slide in the direction of these digital platforms. After all, these tools are supplying value to consumers, who can use a site like Zillow to handle every single stage in the homebuying process, from selling to financing a new purchase.
This DIY transition, enabled by the internet and smart devices, is impacting real estate. On the front of vacation rentals, it has built entire marketplaces that automate the majority of marketing so that your average homeowner can participate.
With the consumer taking on new roles in the real estate process, agents have to adapt as well.
Real estate agents are no longer the first step on the journey.
In the past, buyers and sellers had few options other than to contact a real estate agent right away as they began the process. The amount of information the average person would have to collect for themselves to do anything else made DIY real estate all but impossible for many.
Now, however, open databases of information are available to you with the touch of a button. You can find pages and pages of listing information for properties like yours, explore financing opportunities, and navigate through the home buying process all through a mobile phone. This shift towards open information is a huge win for consumers, but it does move real estate agents a few steps down in the journey.
These days, the role of real estate agent is changing. Instead of turning to them right off, consumers are approaching only after conducting thorough research on their own. This alters the ways in which agents offer value to consumers.
Where before real estate agents served as more of a conduit of information and the manager of the transaction, now they are increasingly fulfilling another role: one of consumer protection.
Homebuying—no matter how democratized—is still an incredibly complex process. A licensed real estate agent has the means and expertise to protect their clients against risk. This is just one aspect of the job that makes it an invaluable service for homebuyers and sellers.
But real estate agents are still an invaluable part of the process.
Real estate agents are not going out of style anytime soon. Buyers will always need someone with experience and a human perspective to help guide them through the process at one stage or another, and agents can be there adding value through consumer protection.
A real estate agent protects a buyer by helping them avoid scams and bad deals, all the while informing them of regulations, hidden costs, and any other important purchase information. They act as an advisor and an expert, keeping you up-to-date on all the local market information you need to know.
Even as artificial intelligence algorithms make chatbots better at analyzing questions and responding to inquiries, face-to-face connections with other human beings will always be in demand when it comes to making big-ticket investment decisions.
Because of this, the democratization of real estate information through the big internet platforms is only win for real estate stakeholders. This means homeowners as well as aspiring homeowners. Even real estate agents can benefit from the use of open information to cultivate engagement and trust with their clients.
With such positive outcomes from democratized real estate data, real estate agents should rejoice. However, you will need to adjust your service to showcase your value as a protector of your client’s investment.
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