Buying a house is one of the most stressful decisions someone will make in their life. In fact, about 40 percent of Americans describe home-buying as the most stressful decision they ever face. Combine that with the stress of the coronavirus pandemic, and it’s easy to appreciate modern challenges associated with house-hunting. Despite this, however, virtual real estate transactions are booming. With an array of new digital real estate tools, the entire home-buying process is being revolutionized. And for most consumers, they’re OK with that.
The pandemic has brought about many changes that range from the growth of delivery services to home entertainment. The Come-to-Me Economy is now in full swing. So, perhaps it’s not surprising that digital real estate tools are expanding as well. New apps and digital platforms are streamlining every aspect of the process despite quarantines and lockdowns. In fact, many believe virtual real estate sales will not only be preferred for the near-term but long after also. The convenience and security these new offerings provide are a big reason that consumers see this as the new normal.
“Having those digital roots is paving the way for the digitization of the overall mortgage industry. We’ve seen so much activity and focus in the space.” – Jeanne Casey, Principal at MetaProp, a real estate technology VC firm
Virtual Tours – From Novelty to Normal
Many consumers used virtual tours prior to the pandemic. As one of the latest digital real estate tools at the time, many recognized its potential. However, most treated it as more of a novelty and something to augment in-person showings. But then COVID-19 came along and changed everything. Not only are virtual tours much more popular, but consumers have now come to expect them in many markets. In essence, they have become a normal part of the virtual real estate sales process.
Statistics demonstrate just how popular these virtual home tours have become. Street Easy, a 3d platform used by many homebuyers, reported a substantial increase in virtual tours this year. Between the second and third quarters, virtual tours increased roughly 110 percent. Zillow also reported significant increases in virtual tours as well. Year-to-date increases exceed 150 percent on its site. Given the convenience these platforms offer, it’s expected these digital real estate tools will be a lasting feature.
“In my experience, the majority of people are comfortable using DocuSign on their phones. [The pandemic] has really forced people to rely even more heavily on technology and I don’t think that’ll change going forward.” – Michael J. Franco, New York Real Estate Broker, Compass
Lending Platforms – Streamlining the Limiting Step
In many ways, the virtual real estate sales process has become faster during the pandemic. Except for home appraisals, most other steps of home-buying have accelerated during COVID for a variety of reasons. But the lender verification process hasn’t been one of these areas. In fact, qualifying buyers and verifying income and employment information has actually be more challenging. But thanks to a couple of new digital real estate tools, this is no longer the case. The result has been not only faster services but also enhanced trust between lending companies and clients.
One of these new digital real estate tools goes by the name of AccountChek. In essence, this is a digital verification service that helps lenders virtually verify borrower income and job status. Another such company is Encompass, which is a platform used by Ellie Mae. It provides similar tasks as AccountChek, which has greatly shortened closing times. Other virtual real estate sales platforms target borrowers in the lending process. For example, Morty is a platform designed to educate and empower homebuyers. Each of these have been well accepted changes in the post-pandemic real estate world.
Contracts and Closings – A Completely Virtual Landscape
Perhaps, he most notable developments in virtual real estate sales has been in the areas of contacts and closings. Several new companies are expanding or introducing new digital real estate tools to help the process. Many boast shared editing capacities where multiple users can make changes to contract platforms. Likewise, several use blockchain technologies for added security and auditing capabilities. Termed “smart contracts,” everyone involved in the home-buying process can complete everything virtually. Many states have even adopted laws that now allow remote online notary services.
One of the best known virtual real estate sales platforms in this category has been around for some time. DocuSign is well recognized as a tenured virtual document signature company. But it has recently added other features to its menu. This includes DocuSign Rooms where buyers, sellers, and brokers can connect and share information. DocuWalk is another such company that promotes is smart contracts using blockchain signatures. DotLoop, acquired by Zillow a few years back, also offers similar closing and contract services. In essence, these digital real estate tools have eliminated the need for in-person closings. And in the process, they have also shortened the entire home-buying process significantly
“When it comes to important emotional transactions like purchasing a home, there’s always going to remain that in-person touch.” – Pamela Liebman, President and CEO, Corcoran
Technology’s Role Moving Forward
Many in the real estate sector appreciate how impactful digital real estate tools have been. By providing a virtual real estate sales process during COVID, the industry has survived quite well. In fact, if anything, real estate is actually booming with housing supply falling well short of demand. Thus, it’s readily apparent that a virtual home-buying process is both feasible and effective. The question is to what degree will these new platforms be used once relative normalcy is regained. In all likelihoods, consumers will want to once again touch, feel and see the house their buying in person. But at the same time, these new virtual technologies have demonstrated that they offer many advantages. For this reason alone, virtual platforms will undoubtedly continue to be a major part of the real estate process.
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