It’s no secret that proptech (short for Property Technology) is changing the way listing agents do business. All indications point to this proptech revolution as a good thing for buyers and sellers as well as real estate agents.
In a recent survey, 85% of respondents said that the explosion of new property and real estate technology makes them feel empowered as buyers and sellers. With so much data about each property available online, buyers and sellers have more information than ever before. And this enables them to make better decisions.
75% of real estate agents surveyed report similar feelings of being empowered by proptech to better serve their clients.
While proptech has been on the rise since the dawn of the digital age, it got a sudden push forward in 2020 with the COVID-19 outbreak. Stay-at-home orders were issued across the country, with some states, like Pennsylvania, deeming real estate a “nonessential” service, and banning all face-to-face real estate meetings.
Suddenly, we were all forced to adopt proptech. 79% of home buyers and sellers said that living through the pandemic made them more receptive to using new technology in their real estate transactions (with 62% completing the buying process digitally). And nearly all real estate agents surveyed (96%) agreed that proptech was essential to keeping their businesses afloat during the COVID-19 pandemic.
Even better, agents and clients alike found the changes beneficial! 74% of buyers who toured properties virtually during the pandemic said this will be their preferred method of viewing homes, even when the pandemic is over. And 81% of agents surveyed agree that proptech has made their job easier.
Let’s take a closer look at how proptech is changing the job description for listing agents specifically.
Conducting Virtual Showings
Virtual showings exploded in popularity during the pandemic. And while buyer’s agents are offering private virtual showings via video conferencing apps, listing agents are responsible for providing recorded virtual tours of their listings.
Of the real estate agents surveyed, 48% provided 3D walkthroughs of their new listings so buyers could tour the home in a three-dimensional virtual space. Not only does this give the listing better exposure online, but it also means buyers can tour the property without a buyer’s agent. This is important for listing agents, particularly in states that allow dual agency (where one agent represents both the buyer and the seller), because it increases the chances of the buyer contacting the listing agent directly for more information. If that buyer isn’t being represented, you may have a new buyer client!
Using Augmented Reality Staging
Before the pandemic, staging was commonplace for high-end listings. Listing agents would hire a professional staging company to bring in furnishings, linens, and accessories to help the home show at its best. But since buyers now give so much weight to their virtual experience of the home, augmented reality staging has made major gains over traditional staging.
Also called virtual staging, augmented reality staging uses apps to place digital renders of furniture, art, and accents inside photos of the home. Of the real estate agents surveyed, 48% said they used virtual or augmented reality house staging applications. As you can imagine, it’s a lot less expensive to stage using augmented reality than it is to physically stage a home. On average, real estate agents estimate saving their brokerage $12,857 per listing thanks to augmented reality staging.
The traditional job description for listing agents included local marketing: yard signs, newspaper ads, and spreads in weekly housing market magazines. But today’s listing agents are expanding their audience.
87% of those surveyed prefer remote showings because they enabled buyers to easily shop outside their local market.
This is important because the pandemic has started a mass migration. With so many people able to work remotely, people are moving out of the cities and into more affordable areas with lower population density. People are even moving across state lines, in search of better weather and lower taxes.
Competing with iBuyers
iBuyers are companies that buy homes directly from sellers, then resell the homes on the open market. iBuyers typically charge a fee to the seller (of slightly less than a traditional real estate commission), but sellers get the benefit of a guaranteed buyer without weeks or months of showings. The obvious benefit during a pandemic is that sellers don’t have to expose their homes to possible contamination through a prospective buyer who carries the virus in during a physical tour.
38% of those surveyed said they sold their home to an iBuyer. Another 40% said that they would be open to doing so in the future. Impressively, eight in ten of those who sold their homes to an iBuyer reported that it was a positive experience.
This represents a relatively new objection for listing agents to overcome. A seller may ask why they should hire you to sell their home at a 6% commission rate when they already have a guaranteed sale to an iBuyer with a 5% fee.
The answer is that iBuyers slightly undercut the market. When a homeowner lists with you, they get your professional marketing plan to reach a wide audience of buyers who are willing to pay market price (or even get into a bidding war) for your home.
Interestingly, six in ten respondents said they would be willing to sell their homes at a slightly reduced price in order to sell their homes more quickly. In a hot market, you can likely sell their home in just a few weeks. Be ready to show your prospective sellers how much more they can net by listing with you for those few weeks.
Virtual brokerages allow agents to work from home, rather than a physical office space.
Before the pandemic, 47% of agents were working from a physical office. Now, only 1% of agents are working from a physical office without plans to transfer to a virtual brokerage (10% are currently in an office, but have plans to go virtual).
The pandemic showed us how efficiently real estate agents can work without a formal shared office space. And most brokerages don’t get much walk-in traffic since buyers are looking for homes and agents online. So it no longer makes sense for brokers to pay the overhead costs associated with a physical office location.
Investing in PropTech for the Future
Proptech will only advance; there is no going back at this point. So savvy real estate brokers and agents are preparing for the changes.
Nine in ten real estate agents report that they have already invested in digital tools since the onset of the pandemic. And 82% of real estate agents agree that they need to incorporate proptech into their business strategy to stay relevant going forward, even after the pandemic ends.
Are you wondering what hot proptech features buyers and sellers are looking for in the future? Here are the survey results:
81% are interested in using a drone to tour a neighborhood
75% of homeowners have plans to invest in more “smart home” or Internet of Things (IoT) technology for their homes in the future
62% believe that, with enough smart home functionality, aggregate reports from this tech could take the place of traditional home inspections (Millennials were 26% more likely to say this)
Are Real Estate Agents Becoming Obsolete?
24% of agents surveyed confessed to being worried that the rise of proptech would render them obsolete (agents over 40 years old were 55% more likely to be concerned than younger agents).
This has been a concern for decades, but there are actually more active REALTORS® today than ever before! Here's what you can do for your clients that proptech can’t do (and won’t be able to do for the foreseeable future):
Use human intuition to understand what buyers really want and need, compared to what they’re originally looking for.
Calculate the fair market value of the home. As of May 2021, Zestimates® have a self-reported 7.3% median error on off-market homes and can only get within 20% of the sales price 81.7% of the time. This means that, on a $400,000 home, Zillow could give a range between $320,000 and $480,000, and still be wrong about 20% of the time.
Negotiate on your client’s behalf.
Use your personal and professional network to find off-market deals for your clients.
Be there for your clients when they need empathy or need a personal guide through the emotional process of buying and selling real estate.
Buying or selling a home requires a personal touch. Proptech won’t replace you; it will just change the way you work.
Proptech is changing the way we do real estate. But these charges are mostly good; both for buyers and sellers and for agents.
Listing agents are taking advantage of relatively new tools like 3D tours and virtual staging to increase exposure for their sellers while giving buyers more of what they want to see online.
Brokerages are learning to compete with iBuyers and running lean by removing the need for physical office space. Proptech is not going to make you obsolete; it’s just going to change the way you work. By investing in Proptech, you’re building a more resilient business.
And if you’ve been sitting on the sidelines watching everyone else join the real estate industry, now is the time to take action! Enroll in your online real estate courses now and be ready to launch your new career in just a few months.