Proptech is on the fast track to transforming the real estate industry for all stakeholders involved. According to estimates from JLL Technologies, there was over $9.7 billion in funding for real estate technology startups during the first 6 months of 2021. Proptech funding is also expected to grow substantially this year thanks to increasing demand for virtual home viewings and automated property management solutions.
From helping first-time homebuyers navigate the process to improving the home building process for developers and their customers, here is how proptech is changing the housing market.
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Landlords: AI And Online Platforms Mean Quicker Tenant Checks And Safer Rentals
A notable area where proptech is making strides in the real estate industry is in helping landlords and tenants better navigate the renting setup. One way it is doing so is by simplifying the tenant check process for landlords and real estate agents. Proptech like Flatfair can also help landlords track and manage rent arrears from tenants.
Their online platform Resolve, allows landlords to set up payment plans with their tenants. For landlords new to the rental market, The Badi Platform can help them vet check their tenants and ensure the safety of themselves and others.
Potential Homeowners: Making It Easier For Buyers
Thanks to low-interest rates, it is a great time for a new home purchase. The number of iBuyers has steadily increased in the last year. According to a report by Redfin, the number of iBuyers has not only returned to pre-pandemic levels but they are also reselling their inventories within 13 days- all with the help of proptech. Also known as instant buyers, iBuyers are also playing an increasingly substantial role in home cash purchases by providing cash to the buyer to make an offer.
One example of that is OpenDoor’s cash-backed program. The program allows potential homebuyers more time to arrange a mortgage while still providing enough for a cash-backed offer. If the buyer finds it difficult to secure financing, OpenDoor holds the property for 120 days in exchange for a 1 percent fee of the home purchase price.
The program can also help potential homeowners sell their old property quicker, and be able to move onto their new homes. The amount of iBuyers (those who purchase properties without seeing it) is set to increase in the future too. According to an OpenDoor survey, 7 in 10 consumers say they would consider buying a home on an app.
Housing Developers And Contractors: Connecting Buyers To Builders For Their Needs From The Start
67 percent of potential homeowners say they are considering new construction. However, because of the roadblocks many of them face 48 percent of them end up buying an existing home in the end. The task of weaving through pages of potential builders in their area, going through past portfolios, and finding a contractor to suit their budget can quickly become tiresome. Then there is the time-lapse when choosing a new build. According to the U.S. Bureau of Statistics, the average time for a new build home is 7.7 months.
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Buyers also spend an overwhelming amount of time looking at visual assets on their ideal home. Emerging property technology like HomLuv gives buyers the chance to view images and rank their tastes. Enabled by AI, HomLuv can then connect new home buyers to builders. According to Jeffrey Mazer, CEO of KB Homes, Homeluv is helping home buyers “better decide what they want in their dream home, and we can partner with them to bring that home to life.
The use of proptech has not stopped there either. Virtual reality in real estate has continued to establish its place in the industry and with startups like No Letting Go, buyers and sellers alike can now enjoy a 360 virtual tour service within 24 hours. What is certain, however, is that proptech will continue to revolutionize real estate- for everyone involved.
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