How Will We Buy and Sell Property in the Future?

A virtual property tour, an instant online house valuation (or sale), your very own online estate agent… PropTech (short for property technology) is the new buzzword used to describe the myriad of gadgets, apps and software used to buy, sell, manage or rent a property that are already transforming the way we buy and sell properties every day.

Property portals

Amazingly, it’s been almost 20 years since the pioneering property search portal Rightmove launched. Over the last two decades – years before the term PropTech was first used to describe the innovative technology – the leading property portals Rightmove, Zoopla and OnTheMarket have become key mediums for estate agents to list properties for sale online and for buyers to search for suitable properties in their desired price bracket and location. In fact, 95 per cent of property searches begin online nowadays.

 

Online estate agents

Online estate agents such as Purplebricks, eMoov, Yopa, easyProperty and House Simple first emerged onto the property market around ten years ago. They were initially promoted as a cheap way to market your property yourself by avoiding estate agency fees, but many have since morphed into hybrid agents providing very similar services to an estate agent with a ‘local agent’ valuing (and photographing) your home, arranging (and attending) viewings and negotiating the sale on your behalf all for a fixed fee.

Whether hybrid or not, technology plays a major role in an online agency’s proposition; it allows agencies to reduce the cost to the customer by automating large parts of the service enabling the customers to self-serve by listing the property online, arranging the viewings themselves using an online booking system, viewing key metrics, reading the viewing feedback, adjusting the price and receiving (and accepting) offers. For the online estate agent, their website technology allows them to increase productivity while reducing fees by negating the need for costly offices and reducing the requirement to hire staff to do the work of an estate agent. Their innovative software practically runs itself whilst providing operators with a comprehensive overview of the entire customer journey (including the listing, viewings, offer and chain status).

 

The future of PropTech

Savvy estate agents, property developers, property investors, landlords and even property managers are looking to further utilise the latest PropTech inventions to optimise and improve their service offering, while many new start-ups are looking to push the boundaries of innovation in the property marketplace with their new ideas for disrupting and improving the industry. In this week’s article, we take a look at a few of those emerging technologies…

 

The one-stop-shop website powered by Big Data and AI

Whereas today’s property portals are typically limited to searches based on personal information manually inputted by homebuyers, such as their desired location, the number of bedrooms they’d like, their maximum budget etc, it is predicted that property portals of the future will autonomously harvest huge amounts of a buyer’s personal data from the internet (with permission of course), scanning their online transactions, engagements and social media likes etc. while Artificial Intelligence (AI) built into the website software uses this ‘Big Data’ to build a detailed profile of the consumer’s lifestyle preferences to create a ‘hyper-personalised’ portfolio of suitable locations and properties for the buyer to view.

“These systems will plug into your Big Data online and discover your favourite type of restaurant, the sort of gym you like and your commute to work,’ Rob Ellice of online estate agency easyProperty explained. “With this deep understanding of your likes and dislikes, the system will be able to make intuitive assumptions about what your ideal neighbourhood or town would look and feel like.”

Property technology expert James Dearsley further predicts we’ll see the emergence of more sophisticated one-stop-shop websites offering end-to-end marketing, search, financing, negotiation, transaction and conveyancing services that he believes “will significantly reduce the time and hassle for home buyers.”

 

AI and Chatbots

Another technology powered by artificial intelligence is the chatbot. A lot of websites already use chatbots to offer online support (including ours). The chatbots pop up when a prospective customer visits a website starting a conversation with them, assisting them with their website visit, collecting contact information and more. One of the advantages of the AI chatbot is that, unlike humans, it doesn’t require sleep; the clever software will communicate with customers and assist them with their enquiries 24/7, even when the office is closed, so it makes perfect sense that estate agents, landlords and property managers of the future will use chatbots to provide round-the-clock service to customers who visit their website or social media pages.

 

The virtual tour – try before you buy!

Virtual property tours where the buyer (or potential tenant) can ‘walk’ through a property with the use of immersive virtual reality (VR) or 360º technology is already in existence, but its use is not mainstream as yet.

The immersive virtual tours can be enhanced by adding pop-up information that the prospective buyer can click on to access certain highlights around the room like the flooring or worksurface type, the choice of fitted appliances, central heating information, room sizes and more.

This type of technology is already being used to market new homes where ‘access all areas’ is more appropriate; it is also super helpful for property developers to market homes that haven’t even been built or finished so that buyers get a real feel for the building layout and can view and pre-select their apartment and its fixtures and fittings, such as the kitchen, wall colours and fitted wardrobes etc..

[To optimise your viewing experience, make sure to select the settings cog to turn on HD, press play and click and drag the mouse to view the whole room]

 

Virtual reality in the future will allow home buyers to view properties at a time and date that suits them; international buyers won’t have to fly into the country to view their potential investments and sellers won’t constantly have to clean their houses just in case another short notice viewing is requested. Virtual tours will help buyers create a shortlist of properties to buy or view for real.

Virtual tours of the future may also see homebuyers wearing special VR gloves that will allow the user to use their own hands to interact with their virtual environment. The gloves will be able to simulate touch so the consumers can, for example, ‘feel’ the smoothness of the granite worksurfaces or the contours of the pattern on the wallpaper.

 

 

Trading your property in – iBuyers

Selling a home can be a long drawn-out, and often, stressful process. The idea of a simpler, more convenient, more certain property sale has led to a whole new way of buying and selling property using an iBuyers website. Opendoor is an iBuyer website. The start-up purchases properties online directly from homeowners at a ‘fair market price’ set by a proprietary software driven by big data backed up by a human element (a local property expert). The company then conducts ‘minimal repairs’ and remarkets the property for resale. Rather than making their profit from ‘flipping the property’ i.e. buying derelict properties for below market value, then doing the property up and re-selling for a profit, iBuyers make their money via the hefty fees they charge the customer to buy their home, typically 6-7% of the sale price; that compares to the 1-2% that everyday estate agents charge. So, is the certainty and convenience factor worth the investment? That remains to be seen…

 

Disrupting property finance

PropTech designed to improve the property finance/mortgage sector is also on the rise. For example, London-based Proportunity, voted Techworld’s best PropTech start-up in 2018, claims its technology will help first-time homebuyers get on the property ladder ‘up to 10 years faster’ by predicting future prices using its machine learning algorithms and then offering an equity loan on viable properties with potential to increase in value to boost a buyer’s minimum 5% deposit meaning they could secure a better interest rate or afford a larger first property.

Meanwhile, a report by leading hybrid estate agency easyProperty and global trend forecaster The Future Laboratory predicts crowdfunding could provide a new route to home ownership for homebuyers of the future including those with poor credit ratings: “In the same way that today’s entrepreneurs reach out to project funding peer-to-peer sites such as Kickstarter, a would-be home-buyer in 2025 will ask crowds of micro-investors to lend the money to buy a house, circumventing obstacles such as a lack of deposit or a poor credit rating,” the report reads.

 

Is the property industry ready for more robots?

With so much change in the industry over the past 20 years, the process of buying and selling a home looks set to change monumentally in future years, hopefully becoming more streamlined with the increased use of property technology.

Ultimately, to be successful, future PropTech products and services need to add value and make the property transaction easier and more efficient and enhance the customer experience of buying and selling a property.

But will robots take over all aspects of the industry? We suspect not… Looking at the PropTech business models listed above, people are still very much a part of the process. Our guess is that in 20, 30 or even 40 years’ time property technology may not need humans to operate it but will still need people to come up with the concept and market it to the masses, so technology will still need humans to succeed.