Although the overwhelming consensus is that the technology offers real benefits to agents, many users told Inman this week that it’s also limited by high costs, concerns about privacy and a rapidly evolving technology market.
Laura Weston Davis and Scott Lincicome own a Better Homes and Gardens brokerage that, because of its location in North Carolina, has a unique challenge: Many of their clients are military families, meaning members are often deployed overseas and aren’t available to check out properties. It’s a tough situation, but thanks to some high technology, the duo has found an effective solution: 3D tours.
“It gives them an opportunity to actually walk through the home,” Davis told Inman, “when they might not have stepped through the door.”
Davis and Lincicome are among a growing number of real estate professionals who are investing in virtual touring technology, and like everyone who spoke to Inman for this story, count themselves among its fans.
While the overwhelming consensus is that the technology offers real benefits to agents, many users told Inman this week that it’s also limited by high costs, concerns about privacy, and a rapidly evolving technology market.
Virtual and 3D touring technology, in other words, currently plays second fiddle to other more traditional kinds of real estate imaging.
Virtual touring technology comes in many forms, but the most common system among the Realtors who spoke with Inman is produced by Matterport. The private company was founded in 2011 and creates interior tours of homes that function much like Google’s Street View feature. Matteport and its chief rival, another company called GeoCV, also allow users to clip high-resolution still photos out of the 3D tour, for the more traditional 2D slideshows that accompany listings on websites.
Matterport recently named a new CEO, former eBay executive RJ Pittman, after longtime CEO Bill Brown stepped down to an advisory role, signaling a new direction for the company.
Matterport’s technology — which includes both camera hardware and software components — also creates three dimensional floor plans, which along with the tours can be embedded on real estate websites such as Zillow and Redfin.
Davis and Lincicome own a Matterport camera and use it on every listing. They both said that it serves as a major selling point for buyers and sellers.
“I’d probably say the Matterport has generated 30 to 40 listings for the office at least,” Lincicome said. “And that’s probably an understatement.”
Matterport touts itself as a major asset for online home listings, of course. Mark Tepper, a vice president at Matterport, told Inman that “we know from our customers that Matterport definitely helps agents win listings, and in many instances, sells the home faster and sight unseen.”
Adrian Wilcox is one satisfied Matterport customer. Wilcox owns Immersive Spaces, a south Florida company that contracts with brokerages to do listing imagery, then collects data on what impact that imagery has.
Wilcox told Inman that in his region over the last six months, homes with virtual tours have sold between 1.6 percent and 2 percent higher than comparable properties without such tours.
Listings that included virtual tours also had significantly more engagement online. Wilcox said that on average, a 2-bed, 2-bath condo with no virtual tour averaged 640 views during months. Add the virtual tour, however, and the average number of views jumps way up, to 1,396.
“People are actually searching for virtual tours now,” Wilcox said. “Which is something we didn’t see before this year.”
However, Wilcox also said that during the last three months, only 1.3 percent of new listings in his area had some type of virtual tour, and that number was actually an increase over the previous six month period.
Tepper said that in 2017 his company’s models “were connected to roughly 4 percent of all homes for sale.” Matterport expects to finish 2018 about 2 percentage points higher, Tepper also said, with more growth expected in 2019.
Still, those numbers suggest that only a small minority of listings include virtual imaging, which parallel the anecdotal observations of half a dozen real estate professionals from other parts of the country who spoke with Inman.
“It’s still not quite in the mass market yet,”John Passerini, Global VP Interactive Marketing for Sotheby’s International Realty told Inman. “It’s not ubiquitous.”
So if there’s a quantifiable benefits to including 3D images in listings, why aren’t they already ubiquitous? What’s slowing it down?
Real estate professionals pointed to a number of limitations. Wilcox, for example, noted a controversy earlier this year over Matterport’s updates to its terms of service, giving property owners the ability to control their own Matterport 3D models, saying the situation created privacy concerns and alienated some brokerages. The company later reversed its position, but Wilcox said some brokerages have still not returned to the service.
“Matterport backtracked that change, but the damage was done by that point because everybody was like, ‘I don’t know if we can trust Matterport,'” Wilcox said.
He added that many agents and brokers appreciate Matterport’s technology but don’t necessarily want to use the company’s services, which require a monthly subscription. Instead, they’d prefer to host the virtual tour files on their own devices — something that the company has resisted.
“They want to be able to actually generate a file that they can host on their website that’s not dependent on Matterport services at all,” Wilcox added.
Then there is the cost.
A Matterport camera starts at nearly $2,500, and that does not include monthly fees for hosting the files. The company’s basic monthly plan costs $49 and includes hosting for up to 100 3D spaces. Matterport’s “business” plan can support 300 3D spaces and costs $149 per month.
Many brokerages hire professionals, such as Wilcox, to shoot their virtual tours, meaning they save money on gear but have one more ongoing expense.
Wilcox said his company has spent more on Matterport equipment than any other kind of gear and, tellingly, said that if he had to do it over again he might try a cheaper option.
“I probably wouldn’t do it again,” he added.
Passerini agreed that price was a limitation, saying that as the pricing goes down, the technology should spread more widely. In the meantime, however, many Realtors can’t afford it.
“I think in many cases real estate agents are not willing or not able to invest in these additional dollars,” he said. “Or to move additional dollars from older techniques to newer techniques.”
Not every virtual tour product is as costly as Matterport. Rival company GeoCV, for example, also creates 3D imaging for properties but does not sell pricy cameras. (Matterport is currently suing GeoCV for patent infringement.)
Instead, the company relies on 3D enabled smart phones, such as the Samsung Galaxy X8, according to Jonathan Klein, GeoCV’s managing director. The company believes that approach is more nimble and, significantly, means “the agent can do it themselves.”
“We want this to be the new norm, where if there’s not a virtual tour there’s something wrong, like they’re hiding something,” Klein told Inman of the company’s ambitions.
GeoCV has two pricing options. The first is a DIY service where agents shoot their own images and pay a subscription fee of between $50 and $100 a month for hosting. If Realtors commit to shooting around 100 spaces a year they get free hardware.
The company also provides an “on demand” service in which it sends a professional to shoot a space. Right now in New York City, that option — which the company compares to hiring a photographer to take traditional listing photos —typically costs between $400 and $500 per property and includes free hosting.
GeoCV CEO Anton Yakubenko told Inman that the company will be focusing on its subscription service next year. The company is also partnering with other businesses, such as Airbnb, that deal in physical space but are not traditional real estate enterprises. Yakubenko sees 3D imaging as growing in the future, and said it was the latest evolution in a process that began with text-only classified ads then evolved to include many other types of media.
“From the consumer standpoint it allows people to search spaces in a more efficient way and spend more time on their best spaces verses driving around and looking at spaces where in five minutes you realize it’s not for you,”Yakubenko added.
Earlier this year, Zillow released its own app for creating 3D tours for free on the iPhone, called Zillow 3D Home, that does not create a 3D “dollhouse” model as GeoCV and Matterport do, but still offers the ability for shoppers to click around and navigate the inside of a home.
Several Realtors who spoke with Inman talked about exploring more streamlined approaches such as the ones championed by GeoCV and Zillow, but they also said that the technology still faces other limitations.
Amit Bhuta, a Compass agent in Florida, told Inman that while he likes and uses virtual imaging technology, it’s still “too clunky,” especially because “most people are on mobile and it’s doesn’t work on mobile that well.”
Bhuta also complained that even when listings do have virtual tours, that feature is often buried at the very end of a lengthy slideshow on websites such as Zillow, or even some brokerage pages.
“The biggest problem with Matterport,” Bhuta continued, “is that on most of these websites that people go to, it’s not really shown prominently.”
That was a recurring complaint among many of the Realtors who spoke to Inman, and highlights how the technology, while promising, remains a background feature across much of the industry. It also prompted Bhuta to compare it to Blu-ray, the much-hyped successor to DVDs that mostly fizzled as newer streaming technologies took over the video world.
“I don’t see it becoming widespread,” Bhuta added.
The imaging companies envision a different scenario, though it’s unclear how long it might take to get there.
“We do see a day when every home has a 3D model,” Tepper said. “We are in a seller’s market now, but this won’t last forever. There will be a time when homes are not selling as quickly and any advantage you have to decrease the time on market will make the agent using Matterport and 3D technology a trusted resource of the seller.”
But that will require overcoming still other challenges, such as privacy.
“Honestly the one thing that I can say, is it’s too good,” Davis, the broker in North Carolina, said. “You have to make sure there’s nothing visible in the home that’s personal, that has any sort of personal information about the client.”
All that said, most people who have used 3D imaging appear to be fans of the technology. Passerini said that consumers like it as well, and Sotheby’s has had homes sell to buyers who never visited them. And in the future, consumers are likely to continue demanding a more immersive experience up front.
“I think that people are looking for good information,” he said. “They have an expectation that they can find out anything by Googling.”
What remains to be seen, however, is where the technology evolves next.
“I definitely think we are at the very start of where this technology is going and I definitely think there’s going to be a value beyond what we’ve figured out yet,” Wilcox said. “The industry is just getting started.”
The various virtual imaging companies provide contact portals on their websites. GeoCV can contacted here, and Matterport can be contacted here. Zillow’s app is free, but the company provides information on how to use it here.