Real estate has been experiencing a brisk few years, to say the least, with homes selling at record prices and bidding wars becoming increasingly common. The market thrived throughout the COVID-19 pandemic, despite the challenges of lockdowns, social distancing and limited personal interaction, thanks in large part to technology. From virtual property tours to digital closings, tech has transformed the real estate journey from an in-person, manual process to one that can be completed mostly digitally.
This trend isn’t just for tech-savvy millennials and young, first-time homebuyers, either: The National Association of Realtors (NAR) reports that 97 percent of homebuyers, regardless of age, use the internet in their home search.
“Every sector and category within real estate has been impacted by the pandemic, and nearly all have experienced an influx of new innovation to make the process of buying and selling more efficient,” says Ashley Stinton, NAR’s senior director of marketing and communications.
No longer just a stopgap measure, the technology that kept real estate moving during the early days of the pandemic continues to be relevant. Here are seven of the most useful tech trends that make buying and selling a home easier.
- Desktop appraisals
- Online 3D tours
- Remote online notarization
- Online document preparation and e-signing
- Home inspection helpers
- Digital escrow and closings
1. Desktop appraisals
While it might be difficult to imagine a home appraisal being conducted without physically visiting the property, that’s exactly what desktop appraisals do.
“Not only are we seeing these remain in use since the pandemic, they will soon become even more popular, since Fannie Mae and Freddie Mac have announced that they will accept them permanently nationwide for eligible properties,” says Katie Severance, a Realtor with Douglas Elliman in Palm Beach, Florida.
The data that may be used to develop these valuations includes information from buyer or seller agents, the homeowner, the builder and past appraiser files. Secondary sources like public records and MLS data may also be used at the discretion of the appraiser, according to Fannie Mae.
Though convenient, desktop appraisals may not be the best choice in all cases. For instance, if a home has been recently renovated, a desktop appraisal may not be able to provide an accurate valuation. In addition, lenders and borrowers still have the option to order a traditional appraisal if desired, according to Fannie Mae.
2. Online 3D tours
The integration of virtual tours into online property listings has dramatically changed the home shopping process. Now, with the touch of a button, buyers can explore a home without visiting it in person.
Online 3D tours allow viewers “to walk through a property as if they are there in person, making their way through each room at their own pace,” says Jason Gelios, a Realtor with Community Choice Realty in Southeast Michigan.
Matterport, which creates 3D walkthroughs that can be shared on social media and real estate listing sites alike, is one of the best known tools, says Gelios. “Many home builders utilize this platform to create 3D tours of their newly built model homes,” he says. “Matterport can be used with footage from an iPhone or a professional camera.”
Other popular 3D virtual tour software includes 3DVista, CloudPano and My360.
Instant buyers, or iBuyers, are one of the more recent developments in real estate technology. iBuyers use AI to make an instant offer on a home. Typically, the offer is based on an analysis of similar properties in your local market.
Using an iBuyer allows home sellers to avoid many cumbersome steps in the sale process, including finding an agent, staging, showing and negotiating with prospective buyers. “We’re seeing a growing interest in iBuyers, with many sellers realizing that it’s an option that doesn’t come with hiccups or additional fees,” says Gelios.
Often, iBuyer customers receive a cash offer for their home in just 24 hours. As a trade-off for that speed, however, they may make less on the sale than they would selling the home traditionally. This is particularly true in the type of seller’s market the country is currently experiencing. “When you have more buyers than there are homes available for sale, homeowners looking to sell have better options to get the most money for their home,” says Gelios.
Well-known iBuyer platforms include Opendoor and RedfinNow. Zillow shut down its iBuyer program, Zillow Offers, in 2021.
4. Remote online notarization
Remote Online Notarization (RON), long supported by NAR, is finally becoming a legal reality. It’s exactly what it sounds like: documents being notarized in an electronic format, without an in-person visit to a notary. The process, including the popular platform Notarize, involves the signer providing their signature electronically and even appearing live before a notary online, anytime day or night.
During the height of the pandemic, this approach was crucial for maintaining social distancing. Since then, many states have enacted RON laws that permanently allow the technology.
“These are getting popular, but they are not yet the norm,” says Severance. “I suspect they will start to explode in the next one to three years, as younger buyers who are more tech savvy are more likely to be comfortable with them.”
5. Online document preparation and e-signing
The days of all real estate documentation being printed and circulated via hard copy are rapidly becoming a thing of the past. These days, it’s far more common for documents to be prepared online and distributed via a secure online document portal. And when it comes time to sign the documents, that step is completed online as well.
Electronic signature and authorization technology makes it easier for everyone involved in a transaction to access the necessary documents, including buyers, sellers, lenders and title agents. These tools are among the most popular real estate tech developments, says Chantay Clark Bridges, senior real estate expert at EXP Realty in Los Angeles.
“In the current environment, everyone, including our not-so-techie customers, has had to adapt,” says Bridges. “We pretty much sign everything electronically in one form or another. It makes the process quicker and smoother, and it gives access at a moment’s notice.”
6. Home inspection helpers
High-tech developments have arrived for the home inspection process as well. There are now online platforms that can put approximate dollar amounts on the problems listed in these sometimes-perplexing reports, so the buyer will know how much they will cost to fix.
Repair Pricer, for example, uses AI to turn a home inspection report into an itemized repair estimate — in 24 hours or less. This pricing information can be helpful for homebuyers, and their Realtors, during purchase negotiations.
7. Digital escrow and closings
In this new era of high-tech real estate transactions, even the final phases of the process — escrow and closings — can be conducted remotely.
Emerging platforms like Earnnest are facilitating secure digital payments and allowing for digital transfer of funds in real estate transactions, says Stinton.
In addition, virtual closings, or e-closings, are becoming more common. Fully remote closings, which make use of video conferencing tools like Zoom or Skype, are not yet available everywhere. But they are gradually being legalized across the country.
“Title companies are seeing tremendous growth in the efforts to conduct digital closings, where home buyers and sellers can e-sign remotely,” says Gelios. “This will be a continued area of growth.”
While plenty of real estate technology existed before the pandemic, its challenges made these digital approaches more popular and widespread. Nearly every step of the home buying and selling process has begun integrating high-tech tools.
“The pandemic increased adoption of these tools at a rapid rate,” says Stinton. “We have witnessed an eagerness to continue to leverage them to evolve the transaction and make the process more efficient, for agents and consumers alike.”