The real estate industry has been digitizing for the better part of two decades. From Zillow to drone footage to paying rent online, technology is revolutionizing real estate transactions — but not always necessarily making them better.
Information that used to be closely held by real estate agents is now almost universally accessible. That can mean that owners, sellers, buyers, and tenants know more about properties than ever before.
But tech is not a substitute for real-world expertise. To get the most out of real estate technology, it’s important to work with a professional who knows both the industry and the tech.
Technology Has Transformed the Commercial Real Estate Industry
The disruption of the real estate industry goes well beyond estimating your home value on Zillow or searching for commercial real estate properties on LoopNet. The commercial real estate sector looks dramatically different than it did two decades ago because of tech trends in the real estate market.
First, real estate tech has transformed the process of finding and listing properties. Tenants often start their searches on listing websites like Zillow even if they go on to work with a real estate agent. After all, this information is at their fingertips, so why wouldn’t they explore it?
Now that tenants can browse every available property online, real estate professionals have had to invest in digital visual experiences to make their listings stand out. From virtual reality and 3D video experiences to high-quality photographs, listings themselves are more high-tech than ever. VR may not always be necessary, but when it’s deployed correctly, it can make a huge impact.
Many real estate professionals also use online messaging platforms to share documents and updates with their clients. Smart hardware, like smart locks, allows agents to give interested parties access to their properties at their convenience, without compromising security. Smart buildings, while still somewhat uncommon, are one of the technology trends growing in regularity.
Tenant-landlord relationships have moved online too. The vast majority of landlords now take rent payments and maintenance requests online. Many store tenant paperwork in the cloud where tenants can access it easily. As convenient as online communication is for both parties, landlords need to make sure that sensitive information is secure.
All of these technologies are available on desktop and laptop computers. Now, many software developers also offer real estate apps so that professionals can access this information anytime and anywhere.
On the cutting edge of real estate technology are artificial intelligence and the “internet of things,” or smart devices. The algorithms that power Zillow searches are already a kind of AI; as the technology gets more sophisticated, AI may allow real estate agents to show properties without actually being present or to accelerate the closing process. Smart products, like TVs and home security systems, are already taking hold in high-end commercial and residential real estate and show no signs of slowing down.
Some of this technology can feel indulgent, like adding unnecessary bells and whistles to your transactions. To identify technologies that might be useful to you, ask yourself: does this technology serve a concrete purpose? Does the person deploying it understand real estate? And, of course: will it help me close transactions?
Understanding the Impact of Real Estate Technology
It’s easy to see the benefits of these technological advances in the real estate industry. In commercial real estate, most tenants and investors have more information about the market than ever before. Showing property, both online and in-person, is easier than ever. And collecting rent and agreeing to an updated lease is a matter of a few clicks, not an hour-long meeting.
But these technologies are now so well established that they’ve made some property owners and tenants think they can handle commercial real estate transactions themselves. Sometimes, perhaps, that might be the case, but often it isn’t.
Zillow’s rent and property value estimates can be inaccurate, sometimes dramatically so. They can offer some early guidance, but they are no substitute for a real estate professional who knows the local market intimately and can give you a realistic sense of how much your property is worth.
Further, having information at our fingertips can make people on all sides of commercial real estate transactions — buyers, sellers, landlords and tenants — think they can jump right into the market without understanding the nuances of those transactions. Sellers may think they can sell their property on their own without understanding what their property is worth or knowing how much money they’ll need to close the transaction. Tenants and landlords may sign a lease without understanding commissions or tenant improvement costs. All parties risk entering into a deal without realizing the obligations they’ll have to the other party later on.
There is no substitute for one-on-one advice from a professional. Having a commercial real estate professional on your team to advise about the market and early warnings about your risks and obligations — that’s critical to your success in the real estate industry.
When real estate professionals with deep industry knowledge put technology to work, however, they can harness the best of both worlds. WindWater’s team of marketing and commercial real estate professionals, for instance, has developed the Marketing Performance Optimization Score, a CREtech resource that helps landlords and brokers understand how their properties are perceived by prospective leads. The MPO Score is a narrowly targeted, deeply focused product by and for real estate professionals.
Related Webinar: Leveraging Technology in Real Estate
The Future of Real Estate Technology
Commercial real estate still has a long way to go before it is fully digitized — after all, many property owners still issue keys and take checks. At the same time, all of these technologies that are already in place will continue to evolve and get more sophisticated. As the Millennial generation enters the market, both as commercial real estate owners and business owners who need leases, using these technologies is going to become essential to surviving in the real estate industry.
But all the problems real estate tech already presents will continue to develop and evolve. Investors and tenants will continue to think they can navigate transactions without professional help — even more so as those technologies get smarter.
A professional can help you use real estate technology to its fullest extent. People who pair real estate expertise with technological know-how can help you utilize all the tools available to you.
In commercial real estate marketing, those professionals are at WindWater — a firm that tackles both real estate transactions and marketing services, with a focus on technology that eases both.
To see our technology in action, check your MPO Score. Then talk to one of our real estate professionals about how you can harness both technology and expertise to maximize both.