Emerging Technologies Transforming Real Estate: Trends Revealed at Harvard Business School Business of Tech Series
Four real estate visionaries met on stage to discuss the future of residential real estate, and it looks bright for buyers and sellers. Panelists were led by moderator Chris Pollinger of high-end brokerage coaching firm Berman & Pollinger. In years to come, expect more streamlined processes, fewer intermediaries, lower fees, lower barriers to entry and increased liquidity. Only top-performing agents will remain in the industry, and commissions will decrease.
Online Marketplaces Keep Real Estate Open 24/7
With online real estate brokerages, consumers are free to search for property 24/7, and are less reliant on agents to find and sell homes. Panelist Alexandra Tieu is Head Area Broker for Movoto Real Estate in Los Angeles. As described on Movoto’s website:
“As the second largest online real estate brokerage in the US and the only one licensed in all 50 states, Movoto is one of the most influential online real estate platforms in the United States. Movoto has helped over 100 million people search for homes annually and sell over 30,000 properties.”
Tieu shared that she previously led 500 Keller Williams agents in her downtown LA brokerage. Also on the panel was Andrew Flachner, Co-Founder of RealScout, which powers home search for thousands of real estate pros.
Over the next 5-10 years, we’ll see a compression of the brokerage, with mid-sized brokerages disappearing. The rainmakers of these offices will learn they can earn more by going out on their own or becoming part of much larger firms. Even now, real estate offices are a “ghost town” because of the smart phone.
Data Science to Identify High Intent Customers
To succeed, agents need to more quickly identify customers with high intent to buy or sell. There are 175 million unique viewers each month on real estate shopping platforms, but most of them are not actual customers. They are neighbors, dreamers, consumers interested in real estate prices, etc. At any given time, there are only 5 million “High Intent” customers using platforms like Movoto, Zillow or RedFin.
Blockchain Will Secure Closing
Blockchain is the record-keeping technology behind bitcoin. Its use extends into real estate to reduce fraud on verification and transfer processes. For instance, counties in Vermont use blockchain to time-stamp and record title deeds. Ultimately, blockchain will disrupt traditional title companies.
Panelist Natalia Karayaneva is founder of Propy, a Silicon Valley proptech company revolutionizing home purchasing via blockchain. Propy’s website outlines the process:
“Buyer, Seller, Agents and Title agent/Notary close traditionally, but on one place. Every participant receives links to the documents and reminders to sign. For payment, Propy requests bank accounts of the Buyer and Escrow and initiates the transfer. Finally, the Buyer gets the Title Deed. The process is secured by blockchain.”
Karayaneva identifies the three major applications of blockchain in real estate to be:
- Title recording: Creating an immutable ledger
- Smart contract: Ability to automate each step of the transaction
- Tokenization: Improving the secure transfer of sensitive information
At present, blockchain hasn’t improved speed or efficiency during closing or title transfers, but adds another step to these processes. In the future, real estate experts hope blockchain will improve security and convenience.
As with every other industry, residential real estate is experiencing upheaval. Emerging technologies and changing consumer expectations make for a challenging short-term environment for real estate agents and brokerages. But home sellers and buyers have much to be optimistic about, from saving time to saving fees.