VR is transforming the landscape of industries across the globe – the real estate industry is no exception.
Over the past few years, VR has become a topic of conversation among leading real estate brokerages. On the commercial side of the industry, VR has been most apparent in the retail sector. Brands like Tommy Hilfiger have capitalized on this technology to provide unique in-store shopping experiences to consumers, such as using Samsung Gear VR headsets to transport shoppers into the front row of a fashion show.
Although it has been less common, residential realtors have also recognized the potential that VR technology has to enhance the buyer’s experience. These early adopters of the residential real estate industry have already started to integrate VR into their marketing and selling tactics. Sotheby’s International Realty was one of the first major real estate brokerages to use VR to optimize the traditional experience of showing properties; for select luxury homes in Southern California and New York, prospective buyers were able to navigate around panoramic images and view the listings in an unconventional, digital manner (Fortune).
While there remain obstacles for VR to overcome before it can truly penetrate the residential real estate industry, it is likely to become more of a prevalent technology in the sector over the next five years. According to Property Guru, the use of VR in property is already a billion dollar global industry; Goldman Sachs estimates that this number is likely to triple before 2020, as this technology enables agents to sell and market properties in an undeniably unique and efficient manner.
The potential for VR to become a reckoning force in the industry is a reflection of the many opportunities this technology offers to residential real estate agents. Here’s three:
1. Early adopters of this technology will position themselves as modern brokerages.
According to National Association of Realtors, it is likely that “consumers will gravitate to VR in the next few years, making the headsets must-have devices and creating an opportunity for brokerages, especially those focused on high-end-properties.” The brokerages which capitalize on this opportunity earlier than their competitors will position themselves as industry leaders.
2. Enhance the marketing and selling process of properties.
When prospective buyers are touring a property using VR, agents have the same view as the customer; they can see which attributes customers are spending more time on, which allows brokers to hone in on those details when selling the property. They also have the ability to show properties before construction has begun. Companies like Virtual Xperience create custom-design VR spaces that transform empty spaces into fully furnished and stylized properties. While the product is not particularly refined or nuanced, it is expected that a “co-evolution of content and technology over the next few years will make the experience more realistic and relevant” (Curbed).
3. Eliminate geographic barriers to conducting business.
According to Weforum, hyper-connectivity is transforming the industry. Although physical location remains important, “the relationship and interdependence between physical and virtual spaces has changed drastically” with the age of increased mobility for brokerages and consumers. For clients that live across the country or overseas, brokers can create immersive content that can transcend geographic limitations, enabling them to tour a beachside Malibu mansion and hear the sounds of waves crashing on the sand all from their office chair in Milan or their couch in Manhattan. The beauty of VR is that this “technology brings your listing directly to your buyers, whether they live in Shanghai or down the street” (National Association of Realtors).
However, just as there are many opportunities that attract brokers to the idea of adopting VR technology, there are obstacles that brokers must overcome before adopting it. One main concern that brokers have when considering the adoption of VR technology is that the price point is simply too high. VR tours and models are expensive, as Matterport and other big providers charge a few hundred dollars just to capture a typical home. However, there are less expensive VR alternatives, like Google’s low-cost, mobile based VR solution. According to National Association of Realtors these lower-cost alternatives are “driving the expected boom..as VR headsets become more available to consumers” (Realtor Mag).
Another common concern among agents is that VR will lessen the importance of agents’ roles in the process of marketing and selling properties. However, embracing the unique opportunities that VR provides agents will only enhance personal engagement. According to Hood, buying a home completely in VR might be possible, but it is decades away from being a reality. In the meantime, “there are complications involving homes that require expertise and continue to require third party involvement” (Fortune). The traditional broker might be on the decline, but the modern agent is more relevant than ever in the marketing and selling of residential properties.
While the use of VR technology is currently restricted – for the most part – to higher-end-properties, there is undeniably a revolution underway. The future of the residential real estate industry has arrived – how will you take part in it?