By now, everyone understands the goal of shelter-in-place rules: to minimize close contact between people, reducing the spread of COVID-19 and flattening the curve so healthcare systems don’t get overwhelmed. When you look at the traditional real estate transaction, you’ll realize the process relies on manual work and in-person meetings for things like notarizing paperwork, appraisals, inspections, and final walkthroughs. None of those elements allow for easy social distancing. As a result, real estate professionals now need to find new ways to finish transactions that were already underway and future sales. Luckily for the real estate industry, digital technology can solve this problem.
Automation and advanced technologies, like artificial intelligence (AI) and virtual reality (VR), have influenced many areas of life and – for the most part – in positive ways. Technology’s impact has changed consumer expectations about nearly everything as they’ve gotten used to an on-demand world. While the real estate business has been slow to adapt to these technologies, the coronavirus pandemic has turned digital technologies from a novelty into a necessity. And the impact of this digital revolution on real estate is as profound as any other sector. Here’s what you need to know about the real estate revolution and how new technologies are transforming this sector in 2020.
Related: 10 Real Estate Technology Trends You Can Expect in 2020
1) Access to More Real Estate Data
Real estate data has always been an important part of the industry. Getting access to data isn’t particularly new to real estate investors for making investment decisions. However, real estate agents served as the gatekeeper for this information in the past. If you were buying and selling property, you had no choice but to call an agent and look through books to find the data you need. But these days, the pandemic has altered consumers’ buying behaviors and patterns. They’re looking for a seamless home buying experience that they’re able to start and finish online without leaving their homes.
Thanks to the digital revolution, buyers and real estate investors now have information and data at their fingertips. They can simply do quick property research and find ample property data online. It would take a matter of minutes to choose from amongst thousands of online listings based on their personal criteria. Investors also have the ability to run a real estate market analysis, find investment properties for sale, conduct an investment property analysis, and more using software and online real estate tools that provide the necessary data.
Investors and agents will also find value in real estate data to uncover key insights into the market. For example, real-time market data helps investors identify trends to improve their business plan in terms of which locations they should consider and what they can do to maximize their ROI. When gathered manually, these insights could be lost in the mass of dispersed data. In addition, the quality of data itself has improved through the digital real estate revolution. Thanks to predictive analytics and cloud computing, the data you’ll access today are more insightful and valuable.
With this greater data availability, it’s clear that the buyers and investors are probably the ones who have benefited the most from the efficient flow of information in the industry. If you invest in real estate, you’ll find a huge value in modern real estate technology and the help that it brings. So to stay competitive in the industry, you need to start adapting to this technology or risk failure. You can get your hands on the best real estate data and analytics for investors here on Mashvisor. To learn more about our product and the data we offer, click here.
2) Virtual Showings & Open Homes
Real estate agents have felt the impact of the pandemic as states issued social distancing orders, affecting how they show houses to clients. In traditional real estate transactions, buyers would have to go through a lengthy process to research and visit homes. Similarly, sellers would have to adjust to new requirements and visiting schedules. But as states and cities ordered people to stay home, agents had to find new ways to continue doing business. This is where virtual reality and artificial intelligence emerged as the best solutions. These are actually the main drivers causing a digital real estate revolution in 2020.
With the significant advancement of AR/VR technologies, virtual 3D home tours have become a staple of home shopping since the coronavirus outbreak. VR separates users from physical reality, engaging them into a new world while AR enhances the current reality. When combining the two, you get “mixed reality” that helps agents in hosting virtual open houses. This helps users visualize properties and better imagine what it would be like to live there. Today’s top agents are those who use this real estate technology in the process of buying and selling a house.
Related: Buying and Selling Real Estate in the Time of COVID-19
Realtors are already doing initial showings over video chat services like FaceTime or Zoom. But by embracing the digital revolution in real estate, professionals including not only agents, but also property managers and landlords can create high-quality 3D home tours using their smartphones. In turn, you can shorten the process and make it more convenient for sellers. Buyers and renters will benefit as well since this allows them to experience homes which, otherwise, they wouldn’t be able to visit in person due to the pandemic. And because buyers can view homes from anywhere in the world, real estate agents will have a global reach and are no longer limited to a local audience.
3) Virtual Appraisals & Inspections
Appraisals and home inspections are other parts of real estate transactions where having a person at the property is important to accurate and quality work. These are also a must if you’re thinking of buying your first investment property. Conduction routine inspections are also a part of your job if you’re a property manager. Now with quarantines and social distancing measures, inspections and appraisals are one of the top challenges for real estate professionals. However, when it comes to appraisals, the Federal Housing Finance Agency is allowing “alternative” appraisal methods that are done with minimal contact and with precautions to minimize fears and cross-contamination.
Some appraisers are resorting to “drive-by” appraisals. This is where they drive through the neighborhood and walk around the house, but don’t go inside. Others are also doing “desktop” appraisals where they use public information and data to generate a value for a house or investment property. Another way to do virtual appraisals is to have the seller walk the appraiser through the house via video chat. This helps in assessing the property’s value and condition without having to set foot in the home. Likewise, the real estate revolution due to the coronavirus also produced virtual or online home inspections. These alternatives help in obtaining a reliable valuation for both the seller and potential buyer while maintaining social distancing.
4) Remote Closing Process
The real challenge that the COVID-19 pandemic poses to buying and selling real estate is closing the transaction. In the closing process, many documents require a notary. Normally, notarization is required to be done in-person. But thanks to the digital real estate industry revolution, remote online notarization (RON) exists. It allows banks, title companies, law firms, and other businesses to close important transactions that require signatures and a notary seal remotely with the help of online technology. For real estate agents, this means closing a real estate deal won’t require all parties to be physically present in the same room – or even the same state!
Keep in mind that this is not legal in every state across the US. According to the National Notary Association (NNA), 14 states allow remote online notarizations. Nonetheless, many states (like New York, Arizona, Colorado, and Illinois) are now enacting temporary RON measures in response to the coronavirus pandemic. And as more states enact RON laws, more consumers will demand the convenience of remote notarization. So, other states where it’s not currently legal may follow. This online real estate revolution allows signing and notarizing documents digitally, making buying and selling real estate online and out-of-state real estate investing even easier. Make sure to check the NNA’s website, however, to see where your state currently stands on RON.
5) Digital Mortgage Closings
A further boost to the real estate industry comes from improved information processing systems at financial institutions providing loans to buyers. Closing on a mortgage loan requires physical presence and a signature with ink on paper. Due to the coronavirus pandemic and seeing that many financial institutions had closed their doors, real estate attorneys have come up with a solution to ensure that prospective borrowers can close on a mortgage safely: remote closing. Just like remotely closing a deal, mortgage documents are signed electronically. The borrower and notary meet by webcam instead of in person.
Someday, remote online notarizations might be the norm and borrowers will be able to close from wherever they want. The top benefit of remote mortgage closing is, of course, convenience. This also benefits borrowers by improving their understanding of the mortgage process. In addition, borrowers will be able to get their disclosure documents earlier, giving them more time to review the paperwork. And not to mentions, remote closing on a mortgage takes less time. Without the real estate revolution and the digital revolution, we wouldn’t have these benefits during the pandemic.
6) Virtual Real Estate Investing
Another trend we’re seeing in 2020 due to the digital revolution is remote real estate investing. Few investors have been investing remotely before the COVID-19 outbreak. Now, however, more and more are stepping into real estate investing remotely. Virtual real estate investing basically means using real estate investment software to make money in real estate from home. How is that possible? Well, consider Mashvisor and how it works. Our software provides investors with a number of real estate investment tools that aid in every step of the buying process – digitally.
Related: How to Make Money From Home with Real Estate in 2020
For example, one of our tools (the Real Estate Heatmap) lets you do a real estate market research using data for any location of your choice. You can analyze the market and different neighborhoods based on several criteria like listing prices, rental income, cash on cash return, and more. You can also use Mashvisor’s Property Finder to find investment properties for sale that have the best potential to make a good rate of return. For any listing on the platform or which address you’ve entered, you’ll get a complete rental property analysis. You’ll also access the Investment Property Calculator to get detailed property data that’ll help you make a decision.
These are not the only online real estate tools we offer! There’s also the Property Marketplace in which you can find off-market properties and analyze their investment potential. Another tool is called Mashboard. This is designed to help real estate agents and property managers find qualified leads, but investors can also use it to get access to homeowner data. Mashvisor also provides you with an Agent Directory where you can find the top agent in your market who’ll help you close the transaction. This all shows how Mashvisor utilized the digital real estate revolution to make remote real estate investing a possibility.
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7) Airbnb Online Experiences
The real estate industry revolution didn’t just benefit the traditional way of investing in rentals. Though Airbnb hosts were the first to feel the effect of the coronavirus pandemic as flights were banned and people canceled their bookings, they also feel the effect of the digital revolution. In 2016, Airbnb introduced “Airbnb Experiences”. This allowed guests to embark on adventures, learn new skills, and see the world from a more local perspective. As a result of the COVID-19 pandemic and as major cities began to shut down, physical Airbnb Experiences were suspended. In its place, the company launched Airbnb Online Experiences.
This is a new take on regular experiences but all virtual, from the comfort of your own home, and quarantine-friendly. Airbnb hosts can offer these experiences, which run between an hour and 90 minutes, via Zoom and at affordable prices. Hosts still have to pay a cut to Airbnb as a service fee to cover operations. And Airbnb guests would book online experiences the same way they handled regular bookings. This offers a new way to make money from Airbnb investment properties from home.
The Bottom Line
With the help of technology, nearly everything we do during real estate transactions can now be accomplished online. These types of technologies are enhancing the buying and selling experience during this pandemic. This is why we’re now seeing a shift in the industry and advice professionals to adapt to the digital real estate revolution. Luckily, it’s easy to incorporate these technologies into your real estate business. If you’re looking for real estate investment opportunities, all you’ve got to do is use a software that provides the digital real estate tools that you need like Mashvisor. Sign up for Mashvisor now with a 15% discount with promo code BLOG15.