Will AI, VR, and AR Change The future of real estate?

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Qualitative research addressing open-ended questions gathered from 20 participants in the process of trying to buy a home was used to show how AI, AR and VR impacted their decision-making process. It also considered the stages that were affected in the process. By ‘stages’ this refers to four well-known consumer decision-making models (EKB, Howard & Sheth, etc.,) developed by researchers in the field of consumer behavior. However, since the five-stage EKB model is considered the most applicable to consumer purchase decisions, the research was applied to this one more. Although qualitative data was collected from real estate agents in high-demand housing markets across the USA for this scholarly article, a limitation of it being used for this research is that it only focused on VR and AR digital technologies. 

AI and machine learning are also changing the consumer purchase process and should be explored for future research. Another limitation is that lower-demand housing markets weren’t factored in the research which generalizes the data that was only collected in the USA and high-demand housing markets. The research provides insightful conclusions about the upside and downsides that the homebuyers felt about the two technologies. 

Impact from the homebuyer's perspective

Virtual Reality and other digital technologies enable buyers to:

• walk through and explore a property as though they were taking a physical tour
• imagine a home that's still under construction
• view an empty space staged with furniture
• imagine what it might be like to actually decorate and live in the space

Impact from the Real Estate Agent's perspective

Real estate agent’s saw many positives about using VR and AR to help them market homes, give them a competitive edge, and take prospective buyers through the home purchase process; however, there are also things they should consider such as controlling the cost of using VR by considering the stage of the sales process where it would be more practical to incorporate it and managing buyer’s expectations by taking steps to ensure that virtual tours are as realistic as possible.

"63% of 2020 Home Videos are a great lead-generator and listings that have a great one will outperform those that only have pictures. Since videos are more engaging, consumers tend to stay on a website longer when they're used to display real estate inventory. The pandemic changed how people buy, sell, and rent property. "I've seen that some consumers actually prefer less engagement from salespeople until they're ready to make a decision," stated  Salpoglou, CEO of BostonPads.com

According to Forbes.com (Demetrius Salpoglou. 2021, March 22) since the pandemic happened, the way that real estate agents and investors interact with sellers and buyers has changed. It has caused many real estate professionals to leverage digital technology to stand out in the marketplace.  They are reducing the number of face-to-face interactions in four ways:

Video Marketing:  Videos are a great lead-generator and listings that have a great one will outperform those that only have pictures. Since videos are more engaging, consumers tend to stay on a website longer when they're used to display real estate inventory. The pandemic changed how people buy, sell, and rent property. "I've seen that some consumers actually prefer less engagement from salespeople until they're ready to make a decision," stated  Salpoglou, CEO of BostonPads.com 

Companies will need to create impactful virtual tours and use video-sharing apps like Tik-Tok, YouTube, Twitter (now known as 'X'), Reddit, and their local channels.

Social Media Marketing: Facebook Marketplace, Instagram, and other social media channels have also become great lead generation tools for real estate marketing. Facebook Marketplace can  provide a better visual experience and more potential to gain the trust of customers through social proof. 

By creating local groups and pages on Facebook, real estate sales agents can curate their listings and content to a specific local audience. They can also have a wider reach through Facebook Messenger and use the app to communicate instantly with prospects.

Proptech: The property technology industry has grown tremendously since 2012 when it raised $221 million in capital to $23.75 billion in 2020. This has resulted in new tools like apps to help create 3D tours, minimize contact for digital signing, document storage, and more. 

Leveraging data: Real estate companies that are able to provide easy-to-understand data for consumers will be able to compete better in their local market. It will be crucial to guide buyers, sellers, and renters based on real-time market conditions. Real estate agents will need to operate from a data-driven approach instead of the traditional one that's based on a gut feeling. 

This means that a real estate agent will need to use the digital marketplace to write blogs that provide impactful content and establish yourself as a leadership authority. They can also maintain a competitive edge by using data and local neighborhood trends to create hyperlocal content that others can't match. This will help to increase the trust factor among consumers.