Donald Trump, the realty tycoon getting famous for his election speeches and trending hairdo is also known for his ability to take the real estate sector to the next level. So, when we discuss about Trump’s business success, we are talking about luxury homes and commercial spaces; which are sold merely by their brand value at unbelievable prices.
So, while reading this article which said that you don’t have to be Donald Trump to own property in Manhattan I was quite amazed at the pluck. However, it wasn’t exactly such a big boast. The power of digital has helped accelerate the concept of crowdfunding under a more secured protocol. Transparency of information plays a pivotal role in real estate investment. With the aid of digital the investor has clear access to all the info, thus helping him make well-informed decisions. Well, this is just one of the advantages, more will be revealed in the latter half of this blog.
Around one-fifth of buyers rely on mobile devices for carrying out their realty search; while a 253% increase was noticed in real estate related searches on Google between the year 2009 to 2013, says a study carried out National Association of Realtors and Google.
The real estate market beats the automotive market too when it comes to online advertising, which is pretty much a clear evidence that the stakes are high and the stakeholders competitive in this arena.
When taking a closer look at the digital disruption happening across sectors, the closer targets seem to be factors immediately affecting our lifestyle, like retail, healthcare, finance and real estate. Amongst these real estate seems to be more in a fix right now about how to exploit this revolutionary moment faster and better. What I am going to elaborate here is how the real estate industry has fine-tuned itself to the digital environment; and what more does it need to accelerate on this path.
Targeting the Millennial Market with Digital
For the millennials the real estate market is more of an investment than owning a dream house. These are young minds with long-term plans and want to earn out of every prospect. Hence, whether it is about buying a condo or even a humble apartment they will carry out their research with the same intensity.
After observing the great depression of 2008, Gen Y took some desperate measures of staying with their parents till the age of 34; because they were burdened with loans, hence ensuring a financially secured future was priority before marriage or any other important step in life. Hence for a long time the realtors/agents found it difficult to draw the millennial crowd to their arena.
However, a study shows that the highest number of stakeholders in real estate fall in the age-group of 28 to 34, a clear indication that they are ready for making the big investment.
Robert Reffkin who made it to the 2014 Fortune under 40 list of most influential young people in business, co-founded Compass, a tech based NYC real estate app that had 96 agents including some of the best, to overcome the digital disconnect between technology and real estate. In the words of Reffkin, who was also VP at Goldman Sachs “I left my company to find Urban Compass (now known as Compass), because I wanted to be around entrepreneurs.” Similar to these tech-disruptive minds which get $73 million in funding for their ideas; the buyers of this era also look for the most profitable and hassle-free offer.
What influences the decision of the millennials when it comes to investing in realty?
- Media sources like television, advertisement, videos and newspaper
- Blogs and reviews shared by peer groups
- The promptness of the realtor to reach them on their mobile devices with intuitiveness
When it comes to investing in realty, videos are relied on more because they provide a realistic appeal which might not be so vivid in words. There was 46% rise every year in You Tube for searches related to finding realty agents. A video tour of the property is indeed more convincing than mere details of the property.
Now considering the tech-savvy target audience there are several touch points where your prospect can easily become your loyal customer but millennials are not easy to convince, a problem the agents have been facing since some time now.
In a survey shared exclusively with CNNMoney by Capital One ShareBuilder 93% millennials agreed that the two factors that make them less assertive about investing in real estate are lack of knowledge and distrust in the market.
An easy conclusion can be drawn from the above stated facts that although there is good investment probability from the millennials, however the real estate agents need to make better use of the digital channels to connect and convert this segment.
Enhancing the Customer Journey with Better Accessibility
Considering the time since people have been using internet and even if we narrow down to days since this technology is being used for real estate related searches, it is quite a long time that MLS (Multiple Listing Services) has been the tool used for looking at opportunities. With the rising trend of specific service or brand related mobile applications, soon the competition is going to get intense for realtors.
A digitally active real estate investor’s journey can somewhat be summed up like this:
- You start with spreading a word in your peer group; by word of mouth or social media, the more tech-savvy prefer to go for the latter because response time is shorter.
- The other touchpoint is online engagement platforms where dealers/agents post real estate listings.
- The step includes evaluating the suggested names and selecting the best out of them, this is more reliant on reviews and videos.
- After this you will be assessing the preferred ones in terms of budget and quality of service, this is where you move from the requirement gathering to the interactive stage.
- As you approach this stage you are already speaking to some agent or dealer either online or in person. This step is critical for the agent too because it is now that he can either acquire the lead or lose it forever.
- A tech-savvy agent will always have an upper-hand because he can introduce the prospect easily to a connected-home, one that works on the concept of Internet of Things. Moreover, he can quickly share a walkthrough of the property even from a remote location, which will certainly interest the buyer more.
- As we have always stressed the focus of digital is always on being customer-centric, hence the service-provider who lets you pick a home/office space without the hassle of roaming to different sites will certainly be desired.
- As you enter the decision-making phase you will focus on who you got the most prompt replies from and how smooth they made the whole process for you. For instance, you will always want to recommend an agent who made it all so easy for you that digital signature replaced real-time purchasing and paperwork and all the authentication and documentation was done without any stress.
The process is not complete even after the decision has been made, rather it now takes the most critical turn because according to your level of satisfaction you will be rating your agent/service-provider and giving a review about them.
Your experience as the customer (CX) will not only help build their brand image but also assess what innovative solution can they serve you with, to make you a loyal customer; and even get some referrals from you.
Impact of Big Data on Real Estate
Online real estate marketplaces like Zillow have become famous and profitable with their ability to serve their customers with accurate data right at their fingertips. According to Zillow’s CEO, Spencer Rascoff, in its first quarter of 2015 the company made $163million, not to mention that they took over their competitor Trulia last year.
Now the obvious question to arise in your mind is, how does Zillow gather such huge amount of data?
The estimates provided by Zillow, termed as Zestimate by them is an assessed market value of a property calculated by an automated software process, which is designed by statisticians. The interesting part is that the value of the property is updated thrice in a week; so you can imagine the amount of data being collected to get the nearest pricing approximation of the realty.
Data in case of real estate has always been important, whether it was about the pricing of a property or how much will it cost in the near future. But gathering this data was never an easy task because the real estate market sees fluctuations on a regular level and the variations are also felt in terms of location as well as other situations like economic conditions of the state or other development plans in the locality.
The collected analytics give an insight on what is the popular search or helps in segregating what is the preference of a particular age-group or gender, to help agents accordingly cater to their prospects. Apart from the agents there is another group closely following the real estate analytical graph, the banking sector. These people make use of the real estate big data to find out about lucrative opportunities and if there will be a rise in the home loan requirements, or any upcoming property sale that is worth a big investment.
Concluding with a quote by Donald Trump, since the tale began with him, “It’s tangible, it’s solid, it’s beautiful. It’s artistic, from my standpoint, and I just love real estate.” The realty sector is progressively moving towards digital transformation, however they also need to ensure that they maintain the inertia as the other sectors are close to taking over.
The capability that digital provides to an investor, an agent or an entrepreneur with a disruptive idea is not completely exploited until it both the parties are making use of it thoroughly. This simply implies that next time you have a customer who approaches you online, make sure you complete the deal online and meet him only to hand over the keys.