- Virtual reality is going to alter the real estate industry fundamentally.
- Agents are critical to guide people through the most complex transaction of their lives.
- Virtual closing tables could dramatically help speed up the closing process.
It’s late Friday evening, and the Smiths have just put the kids to bed. A subtle chime rings from the TV, alerting them of the impending meeting with Roger, their digital Realtor.
Mr. and Mrs. Smith make their way to the family room where two black virtual reality (VR) headsets await. Roger greets them both in the virtual realm and explains he has set aside 10 homes for them to experience. The Smiths are eager to get started.
After just 45 minutes, the home tour is complete and the Smiths have Roger write up an offer for their favorite home.
Is this the future of homebuying?
As long as property has been sold, the method for evaluating real estate has largely remained the same. It is a real asset which requires one to physically view the property in order to correctly assess its shape, use, condition and viability. As the process has become more complicated — largely due to ever-more-complex laws — it is this basic tenet of physically viewing a property which has remained practically unchanged.
Now we stand at the precipice of a digital technology that proposes to completely disrupt just about every aspect of the transactional real estate experience. It may take a decade, or it may take just a few years, but as we reach the point of total VR integration, one thing is for certain: Virtual reality is going to alter the real estate industry fundamentally.
Understanding the landscape of virtual reality
Countless companies are seeking to disrupt the status quo of real estate, but specific ones stand the forefront of this pioneering trail for virtual reality. It’s important to understand not just the VR companies themselves, but also the platforms that could become standalone providers of an integrated VR experience for the entire real estate transaction.
Xome might be one of those providers. Xome strives to provide an end-to-end solution for home buyers. A platform like this could very well be the conduit for hosting the digital home shopping process if paired with a service like Matterport.
Matterport, while known for its 3-D models and “dollhouse” versions of existing homes, is well-poised to enter the VR market. An immersive and hyper-realistic experience is perhaps exactly what is needed to grease the skids of efficiency in the retail housing market.
As CEO of Matterport Bill Brown put it, “Sellers are excited by the prospect of less showings and more qualified buyers due to the immersive experience of our technology. Users truly get a better feel for the space than they would with 2-D still images and edited video.”
Home staging also stands to progress in a big way. For sellers who perhaps can’t afford a more traditional route, roOomy provides 3-D photorealistic staging technology to the real estate industry, showcasing the full potential of any residential property. That includes the ability to use real-life products available through major retailers.
Taking this a step further is a company like Virtual Xperience, which create 3-D virtual reality experiences to immerse a user in the space and creates the emotional walkthrough experience that allows buyers to evaluate a property even before it’s completed.
Beyond Zillow — changing the home shopping experience again
It’s fair to say that Zillow and similar companies have already surpassed industry upheaval with democratization of data. That is, consumers are no longer bound by a phone number and a listing agent to retrieve information about a home.
But as we trend outward, further putting consumers in the driver’s seat of the home shopping experience, VR is likely to become the next stepping stone.
Kartik Ramarcharndran, CEO of Xome, says “Depending on how it is used, VR could really help buyers and agents get a sense of a property before touring it. Agents will be able to rule out candidate homes that aren’t right for their clients; and likewise, buyers will be able to have a sense of what a home is like before actually touring it.”
On the developer side, one of the greatest challenges is the pre-selling aspect of creating a new development. Often times, these communities are built out in phases in order to avoid carrying unnecessary inventory. Multiple physical models are built and staged, then retained throughout the sales cycle until all units are sold.
But what if one could achieve what a model does before the development even breaks ground?
This is what Jeff Maurer is aiming to do through his company, Virtual Xperience. “From a developer point of view, we intend to help them and the buyers to presell units much faster than they ever have by using our technology to show off properties before they are completed,” he said. “To be able to actually experience a property at full scale without actually being there.”
Are agents at risk of becoming obsolete?
This is the proverbial elephant in the room. If this thought hasn’t crossed your mind by now, it should.
There might be platforms aiming to flat-out kill the job of the agent, but we can all agree some of these sound bombastic and maybe even vindictive (axe to grind, much?).
Although the occupation might not be at imminent risk, we should focus more on the technology curve and societal integration if we’re going to approach the question.
The good news is that VR has the potential to elevate the game of the tech-savvy real estate agent, and especially the brokerage. By offering cutting-edge services like VR into your marketing plan, sellers — and even buyers — can see that you’re not scoffing at technology, but embracing it. After all, isn’t the point of all this to make everyone’s lives easier?
Resoundingly, all four companies interviewed for this article agree that the knowledge and expertise of an agent can not be replaced by a computer.
One of the most important jobs of a real estate agent is to be an advocate for the seller and buyer. That does not change with the advent of technology. Agents are critical to guide people through the most expensive and likely most complicated transaction of their life.
If anything, immersive media technology enables agents to better understand their clients’ needs and reduces the amount of time the client has to spend in the selling or buying process.
But agents will need to become well-versed with a whole new set of digital tools in the VR landscape. Tools like understanding how to show a home your clients are looking at through a headset, using state-of-the-art staging resources, and even showing the possibilities in a home that needs some TLC. Cost-prohibitive activities could become that much more accessible, leading to more home transactions and better-informed decisions.
Incorporating virtual reality into the transaction process
Once an offer has been made and accepted, there is still much work to be done. The inspection, appraisal, final walk-through and insurance processes remain fairly demanding aspects of the transaction.
Still, all of these could be significantly improved through the use of immersive media. This is the hope of companies such as Matterport, but admittedly it will take some time to develop.
It is going to become increasingly common to hear about homes being bought without a visit to the actual property, so we can see where the process as mentioned above could easily be improved upon.
Also, for states such as New York, it’s not uncommon to have 12 people at a closing table. That’s a lot of time and resources, especially if there are multiple closings in one day for each professional.
Virtual closing tables could dramatically help speed up the closing process when travel or scheduling a meeting is obstructive and time intensive.
Barriers to entry: Adoption and security
Virtual reality still faces a steep adoption curve to be widely used in the real estate industry.
“In order for VR to take off, you need a confluence of hardware, software and content,” Bill Brown of Matterport said. “Cardboard and Samsung’s Gear VR are becoming very popular. Oculus Rift is on the way. There needs to be mass adoption of these hardware technologies in order for VR solutions to impact the real estate industry. Plus, people will want lots of interesting VR content to justify buying the hardware.”
Not only will content need to be on point, but the hardware will need to come at an accessible price point. The day when these devices become commonplace — as smart phones have — and great content is available will likely be when we see true adoption of this technology.
Security presents a different kind of challenge. With the adoption of new technologies, such as digital wallet solutions, proving one’s identity becomes of paramount importance to avoid fraud, misuse and the like.
With VR headsets, it’s not long until security solutions will support this need with retina and voice identification. Of course, this implies a private company being in charge of the security of this type of unique data.
As with any technology adoption, we are quickly seeing the need for devices to be ever more intrusive of our unique biological features to function properly. Although this continuance of the now common fingerprint scan on your smartphone might face scrutiny, the exchange for convenience and economical efficiency will win the day.
Finally, it might not be surprising to see an entire shift in the landscape of real estate agents largely defined by those who embrace this technology and those who wish its demise.
The rise of the ‘digital real estate agent’
Already, technology is bearing down heavily on the strategy of the real estate agent. Although more established agents might have their built-in network, the fact remains that as technology continues to evolve and integrate into society, we will eventually move beyond the traditional description of a real estate agent into one who is inherently adept at the various forms of technological advancement. Perhaps a new job title will arise, the digital real estate agent.
Until this total convergence happens, the best we can do as agents — especially those who plan on sticking around for the next 10 to 30 years — is recognize these tools are something to be embraced to stay competitive.
How these advancements fit into your overall strategy as they continue to progress will likely dictate whether you phase yourself out of this career by becoming obsolete in a technology-driven world.