Is digitalization driving out the human touch in real estate?
IT is no secret that digitalization is transforming many aspects of daily life. The advancement of the Internet and e-commerce is resulting in a decline in human interaction. The days of handwritten letters and cards are becoming something of a distant memory; even the sending of emails is becoming steadily surpassed by the proliferation of messaging apps and social media platforms.
The increasing digitalization is also significantly affecting the way we shop. Once a thing of science fiction, we can now order items to our door on the same day of purchase with just a click of a button. And who needs a human to deliver the package when drones now have the ability carry it right to your door?
The introduction of AR and VR mean customers can partake in a whole new shopping experience; whether it is virtually applying make-up, watching your desired outfit being modeled by a fashion model on a catwalk, or test-driving the latest car through virtual picturesque landscapes.
The increasingly digital world is also disrupting the real estate business, slowly eroding the human factor which was once a crucial aspect to all stages of the house-hunting process, from search through to purchase.
Search and discovery phase
In regards to the search and discovery phase of house-hunting, the requirement for human touch is almost negligible. Prospective home buyers can search for properties using various property portals, at any time, anywhere, from a laptop or mobile app.
According to Calum Melhuish, associate director at UK-based company Hollis Morgan, the Internet is a crucial part of the business.
“Internet advertising probably accounts for around 65 percent of enquires we receive on each property,” he said. “It has made it so much easier for people to view property details – especially for clients looking to relocate from abroad.”
With more and more buyers using the Internet to search for new homes, businesses must adapt their strategies accordingly in order to keep up with competitors.
Olivia Anstee, a UK-based estate agent, told Tech Wire Asia: “With all businesses, there is a huge importance to keep up with modern technology and other competitors. We find that the majority of our clients tend to search on Internet-based portals when hunting for a property.
“Properties are becoming more accessible from the comfort and convenience of your own home, especially if you’re searching for something which is out of your local area. Internet portals have become extremely advanced, providing huge amounts of access from site to site, creating a domino effect and enabling clients to research more than one aspect to their search criteria when purchasing a property.”
Though more commonly associated with the gaming world, virtual reality (VR) is becoming more and more popular within the real estate industry.
House-hunters are able to take virtual tours of houses, in the comfort of their own homes, providing solutions to common industry issues such as inconveniences in timing and location for buyer, seller and realtor alike.
Panoleh is a Singaporean startup which aims to make the home-showing process a simple and seamless procedure for its clients through VR technology. Users are able to build virtual tours using the platform, which allows buyers to enter a simulated 3D environment where they can get a real feel for the property they are viewing.
“This is the future of technology and soon buyers will be able to look at properties in Singapore while they’re sitting at dinner in China,” said Panoleh CEO Jackson Chong.
As well as VR, in recent years there has been an increase in augmented reality apps within the real estate industry. Last year, furniture giant Ikea released The Ikea Place App, which allows users to bring its catalogue to life by using AR to see how a piece of furniture will look in their house.
Want to see if your sofa will look good in a house you’re viewing? Simply open the app, point your camera at the floor and watch it appear to scale.
House-hunters are also able to use different platforms to compare properties, based on parameters such as price, size, accessibility and location. Though these platforms facilitate in helping the customer make a decision, it cannot be said that the magic of human involvement is completely void in this stage.
“With online platforms, it’s quite hard to get a sense of reality on an area; even with things like area reviews, it’s never the same. Most agents live in the area they work in, so the knowledge is far higher than what online can give,” says Luca Giambrone, a UK-based estate agent.
Furthermore, many buyers rely heavily on the opinions of their social circle when deciding on a property. Online forums and review sites also still play a major role in the decision process for many.
The last mile
The last stages of the house-buying process involve finalizing the property and making the purchase. These stages are when human interaction is crucial, where the prospective home buyer must shift from the digital world to interaction with a real estate consultant.
Though buyers can go straight to the developer/seller and “cut out the middle man”, this is arguably risky business due to personal bias. A professional consultant can give a much more reasonable opinion to the buyer.
Director of the real estate agency LiFE residential, Jon Werth, believes that digitalization is a key factor in the industry, especially in enhancing communication.
“The digitalization of property search is really a fundamental necessity when linked with AI or Chatbot technology, for example the way the new startup Blyng is aiming to help us communicate out of hours via Facebook and when extra busy periods hit us unexpectedly,” he told Tech Wire Asia.
“The benefit of this addition should be to enhance the customer journey by adding subtle touch points to the enquiry which enable a warmer communication from the negotiators.”
The final stage of closing the transaction is a stage which remains heavily dependent on human interaction. With a multitude of paperwork to complete and registrar appointments, the reliance on digital alone will not be of value.
Is the future of real estate purely digital?
Considering the emotional journey of purchasing a property, the wired veins and metal heart of the digital world simply will not cut it.
“Although agencies are in need of keeping up with the demand of technology, there is still a requirement for high levels of customer service offered to create a professional level of sales progression. A personal approach and knowledge of the local area are something a computer cannot offer,” says Anstee.
“I believe the demand will continue to grow with the thirst of youth needing instant access via mobile devices. But I strongly feel that this will need to be backed up by a happy and helpful estate agent.”
While digitalization highly enhances the experience of house buyers in terms of ease and convenience, human interaction still remains a very ‘real’ need in the real estate industry.
“People still value customer service and experienced agents, otherwise there would be no shop-front agents around… everyone would be buying and selling through online agents who charge roughly one fifth of what a high street agent charges,” said Melhuish.
- IoT continues to see double digit growth in spending says IDC
- Can the EQ gap between chatbots and humans be narrowed?
- Oliver Wyman’s advice to CFOs embarking on a journey to Finance 4.0
- Singapore to develop best practices for drones, 3D printing and more
- Are CX and task automation really driving AI adoption?