Real estate industry poised for a tech disruption in 2019
From smartphone apps to digital signatures, technology is changing the way homes are bought and sold
Real estate agent Shawn Zigelstein remembers a time, just a few years ago, when a printer, scanner and fax machine were the most important tools of his trade.
Now, those gadgets are nearly obsolete.
"I don't even know the last time I sent a fax, to be honest with you," laughs Zigelstein, a sales rep with a Royal LePage brokerage in Richmond Hill, Ont.
"Oh the dilemmas we used to have were unbelievable. Now our clients can open their phone up, push a few buttons and the [offer] papers are signed."
Zigelstein says the adoption of technology in real estate has grown exponentially over the past few years and it's a trend he thinks will only grow as more options become available and realtors scramble to lure in the millennial market.
The agents that are not adapting to this change are going to see their business drop considerably because they can't adapt fast enough.-Shawn Zigelstein, realtor
"The agents that are not adapting to this change are going to see their business drop considerably because they can't adapt fast enough," he said.
From smartphone apps like Loom, which allows realtors to remotely share screens and presentation slides with clients, to digital signatures that can be verified with phones and tablets, technology is shaping a new way for realtors to do business.
Historically a 'laggard' industry
Historically, the real estate industry has been a "laggard" when it comes to embracing technology, says Frank Magliocco, a partner at PwC Canada who specializes in the housing market.
"But I think what you're going to see now is a fairly significant ramp up in embracing that technology once it becomes more mainstream," he said.
"It'll be increasingly important to remain and be competitive in the marketplace. Once you see these technologies prove out, you'll see more and more adoption."
According to PwC, proptech, broadly defined as technology used in the real estate market, was a US$4.6 billion industry in Canada and the U.S. in 2016. Last year, that figure climbed to US$7.3 billion, an indication that interest and opportunity in the space has also grown.
Magliocco says proptech, which he called the cousin to the banking industry's fintech, can refer to anything from online listings websites to smart buildings that use big data to automate heating and lighting to 3D printing homes.
"Think about the banking industry years ago, before fintech … banking had to done in person. It came in and changed the entire business model. Now you deposit a cheque and transfer money and you can do everything on your phone," he said.
"Real estate used to be every transaction had to be heavy on the paper with lots of lawyers involved and surveyors going out to check the space and measure the space. That's not needed anymore."
Changing client expectations
Stephen Jagger, the co-founder of IMRE, a company that runs an artificial intelligence personal assistant for realtors, says technology is so embedded in daily life that clients expect to be able to use it in their real estate transactions.
IMRE's chatbot can respond to basic questions from prospective clients on behalf of a realtor 24 hours a day through text and social networks. It uses machine learning to answer questions about a listing, such as price, the number of bedrooms and what school district the home is located in. However, the bot can't answer subjective queries meant for a realtor, such as comparisons of different neighbourhoods.
Jagger says this type of technology doesn't replace a real estate agent, but like all good technology, it enhances their jobs.
"[Realtors know] you have to be responsive in five minutes or you lose the lead," said Jagger, whose company is based in Vancouver. "It lets realtors focus on the high-level tasks, like showing a house, instead of answering random questions all the time."
However, Toronto realtor Cam Woolfrey says technology isn't going to make the real estate industry obsolete.
He said a realtor with experience "can make the experience."
"Clients actually see a dollar value in that. If you have the knowledge and experience, then clients will see that as invaluable."