Gone are the days when property buyers bought the weekend newspaper just to take a look at the property guide. Gone are the days of making a special pit stop at the real estate agent’s office just to gaze through the glass at the A4 print-outs of the latest homes.
Property, like almost everything else in life, has gone digital. Whether buying or selling, your first port of call is inevitably the screen of your computer.
And the digital revolution has been an overwhelmingly good thing for both buyers and sellers. It offers choice, convenience, value and effectiveness. It allows you to choose your own path, rather than being entirely reliant on your local agent. It helps to paint a better picture of the market as a whole, allowing you to understand exactly what you should be buying or selling a property for.
But this digital revolution is far from over. In fact, it’s hardly begun. Sure, we have sites that offer up almost every house in the market in one handy location, but these have simply taken on the role of the weekend paper. And yes, we converse with our agent and send documents via email, but this isn’t anything that a letter couldn’t do. The real revolution is still to come.
The new digital world of buying and selling
What form might this revolution take? Here are the new technologies that promise to make a real difference to the way Australians buy and sell property.
Targeted social selling: From a fun way to post thoughts and poke friends, social media has transformed into a marketing colossus. We happily gave (and continue to give) these networks a wealth of information about ourselves, and this enables advertisers using the platform to hyper-target individuals.
Is your home situated in the catchment area of a distinguished school? Is it the perfect size for a young family? Targeted social selling can identify people who not only fit that young family mould, but that are in your immediate area, and are perhaps even actively looking for property. With traditional forms of marketing, finding a buyer was a matter of shouting out into the ether in the hope that the right people would hear. Targeted social selling, on the other hand, lets you whisper in the exact ears you need to. Buyers win too, as they are served up bespoke ads for homes they’re more likely to be interested in.
Virtual reality: The handful of grainy photos in a newspaper ad were superseded by the crisp and plentiful images on a property site. These were then superseded by YouTube walk-throughs, offering a potential buyer a far more tangible view of the property. Now comes the pièce de résistance – virtual reality.
VR enables you to offer an almost real-world look at your property to any buyer who can’t make an open inspection, whether because of time or distance, and all from the comfort of their own home. Interstate or overseas buyers will be far more excited by your property if it can be toured with VR, and happily this technology already exists. The fact that VR is still fresh and exciting will likely work in your favour too, as it may entice buyers who wouldn’t have otherwise given your property a second look.
iBuying: A buyer who is ready whenever you are. That’s the pitch of iBuying, a new concept that has been making major waves in recent years. The idea is that you offer an iBuyer (one of a number of heavily backed start-ups) your home, and they send you back an offer – sometimes in just minutes, other times in a day – without so much as a sideways glance at your home. And there you have it – your asset is instantly liquefied.
Unsurprisingly, you’ll pay a premium for such a swift and painless service. While the likes of OpenDoor say they offer ‘a competitive rate,’ it’s unlikely you’ll be getting market value for your home. Currently iBuying is a service for those who need cash fast, and it remains to be seen whether it can truly disrupt the real estate industry. It is gaining a foothold in many markets already though –4% of Florida properties are already sold through iBuying, for example.
Fixed fee selling: Agents work on commission, right? Not in the case of fixed fee selling, where an agent sells your property for a predetermined fee. This model probably has more chance of disrupting the Australian real estate industry than iBuying does, although it has already been around for a decade, having been brought on by the real estate industry’s transition to the World Wide Web.
Fixed fee companies will usually offer a service that is cheaper than hiring a traditional agent, but this model comes with some asterisks. The ‘local property expert’ allocated to you by the fixed fee agency may not be particularly local, and contact with them can be limited. You can also be forced to forfeit your fee if your property doesn’t sell within a certain timeframe.
Shared Investing: Many Australians have a dream of investing in property, but in recent decades the property ladder has become difficult to simply get on, let alone climb. Companies like BrickX feel they have the answer: shared investing.
Shared investing allows anyone to buy a tiny fraction of a house – quite literally bricks at a time – opening up property investment to all. BrickX, for example, divide their properties into 10,000 pieces, with investors able to buy as few or as many pieces as they’d like. The pieces of the property then act much like shares in a publicly traded company; the value of the property grows, rental income might be paid out as dividends, and capital gains are earnt when the pieces are sold. Like the technologies above, it remains to be seen whether this idea is truly disruptive, but if property values continue to rise, it could well be.
The fun thing about crystal-balling the future is there’s no way to know whether the predictions will be right or wrong (until we get there at least). One thing that we can say for sure is that technology will continue to evolve in property sales, and the buyers and sellers who adopt disruptive tech early will be the ones that will benefit most.