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How COVID-19 is Affecting Real Estate Technology

May 10, 2020
Tips & Tricks

(This advanced blog summarizes real estate investing tips and insights Lofty AI has acquired from working with thousands of investors and institutional funds.)

The digital revolution of real estate is now

With stay-at-home orders in full effect across the world, the digital revolution that the real estate industry would have inevitably undergone in the next 5-10 years is happening at this very moment.

With crisis comes opportunity: the real estate industry is finally recognizing the merits of the digital realm and reshaping itself completely. 

The advantages of real estate technology seem obvious to most. But, when people are stuck in their ways and have been doing things the same way their whole lives, it takes a drastic event for them to quickly begin to change.

This post walks through examples of how COVID-19 is catalyzing a digital revolution in real estate.

Virtual tours

Instead of driving around touring different properties, buyers are now able to go on virtual tours of the property from the comfort of their own home.

Companies like Matterport allow real estate agents to market properties with virtual tours, while other agents are using FaceTime to walk buyers through different properties.

There are also virtual open houses broadcasted on Facebook, Instagram, and other websites that allow buyers to explore their options without having to be in the area.

A woman doing a virtual home tour on a laptop
Virtual home tour

Virtual notarization

On March 20th, New York Governor Cuomo issued an Executive Order allowing ‘Virtual Notarization’. This gives real estate agents the ability to finalize deals without having to leave their homes.

With digital signature companies like HelloSign becoming the norm in almost every industry, it's overly surprising that it's taken this long to digitize notarization.

The digital notarization process
Digital notarization process

Virtual appraisals

Furthermore, banks have learned to support and accept “desktop” appraisals, and co-op boards are facilitating interviews through Zoom and Skype.

Appraisals and home inspections have always heavily relied on the physical presence of an expert to ensure the accuracy of the processes.

In response, the Federal Housing Finance Agency—the government regulator of mortgage facilitators Freddie Mac and Fannie Mae—is endorsing “alternative” appraisal methods.

Some banks are even conducting drive-by appraisals with properties that are already under contract and relying on virtual tours and existing images to get the property to the settlement table.

The disruption has begun

All of these disruptive trends in real estate described above would have been the norm within the next 5-10 years.

It makes logical sense to automate manual processes that were developed over a hundred years ago... but the real estate industry has never had the incentive to do so.

Now that technology is being incorporated into every facet of the industry, real estate professionals are realizing just how much easier it is to automate their tasks via the products of emerging Proptech startups.

Because of this, we will most likely see a continual uptick in adoption of these technologies in the residential real estate market. The real estate advantages will be massive.

Real estate artificial intelligence imagery

Proptech transactional tools are growing

Some of the best real estate technology companies such as EasyKnock and Doorkee are seeing up to 200% increases in demand since the outbreak of COVID-19.

People who weren’t previous users of these products are now loyal fans who are eager to continue using these automation tools long after the end of the pandemic.

A technological revolution has been long overdue for the real estate industry, but it would have been another 5-10 more years before the start of it.

All it took was a global pandemic for the industry to realize that it can function more efficiently and effectively: 95% of the tasks can be automated and completed in 1% of the time it would take manually.

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