Digitalization in the real estate industry – opportunities and limits

Digitalization is playing an increasingly important role in real estate brokerage

In the past ten years, digitalization in the area of ​​real estate brokerage has accelerated significantly and led to a restructuring of the brokerage process, which is increasingly taking place online. This development is clearly reflected, among other things, in the growing number of large real estate platforms, the increasingly automated brokerage processes, the variety of new functions in the technology-based brokerage of properties and the amount of data that is available with just a few clicks.

The most important catalysts for this development are certainly the COVID-19 pandemic with its social and economic ramifications. Added to this are rising raw material prices, backlogs of approvals, increasing inflation and an ever-increasing need to evaluate and use huge amounts of data without delay.

In order to remain competitive in this disruptive market climate, more and more real estate agents are using intelligent systems that provide connections to customer software, between departments and to other companies in the real estate industry. Functions such as the following are used here:

• Condition analyzes and renovation plans
• Portfolio overviews and reviews
• Tenant overviews
• Mortgage overviews
• Building Information Modeling
• Prospect scoring
• AI-powered cross-selling and up-selling

Artificial intelligence is already being used in many of these areas today. Accordingly, the number of owners and interested parties is increasing who are wondering whether traditional brokers are still needed today or whether the brokerage cannot be handled entirely using software solutions. If you want an answer to this question, you first have to think about how useful brokers are in adapting their processes to digital structures and what added value they can provide that machines cannot.

The biggest challenges in implementing digital concepts

Technical aspects can only ever be part of digitalization. Before they can be used, corporate structures and processes must first be transformed according to a detailed strategy. You can quickly see which areas of the company can be digitized and where further personal support is required.

It is therefore important to first carefully analyze the needs of customers, partners and employees. Only based on the data collected can you make well-founded decisions about the technical solutions actually required. However, many companies only use a large number of inadequately coordinated individual solutions. This creates additional work instead of making work easier. But even beyond this, many challenges arise when implementing digitalization solutions.

Poor shared data models

If you look closely at digitalization drivers such as the EU's Green Deal with its goal of climate neutrality by 2025, you can see a typical implementation problem. There are no uniform models with compatible data that can be used across the industry to digitize processes. It is to be expected that software solutions such as SAP will become increasingly important.

Lack of skilled workers

Another major problem is the lack of skilled workers. Currently, few people have the knowledge needed to implement and appropriately use technologies and processes. Particularly worth mentioning here is the GDPR, with which many companies still have problems.

Lack of sensitivity to the limits of digitalization

What cannot be ignored in all current developments in digitalization is the human component. This plays a crucial role, especially when buying real estate. Ultimately, this is a far-reaching decision for which competent advice is essential. And you don’t want to see that replaced by a purely digital solution.

BETTERHOMES relies on a combination of digitalization and personal support

At BETTERHOMES we view current technologies primarily as supporting the placement process. At the end of the day, it's always about the personal network. This is the only way to create the necessary trust in transactions in the residential real estate sector.

That's why every new technological solution at BETTERHOMES is designed to fit the acquisition paths, 75% of which are still personal in nature. A good example of this is the BETTERHOMES online viewing. It has the advantage that interested parties no longer have to look at 20 – 30 properties on site, but can get a first impression with little effort. Properties that make it to the shortlist can still be viewed on site later. Here you can clearly see that technology enriches the process and does not replace it.

Conclusion

It can be said that complete digitalization of brokerage activities is neither desirable nor sensible. After all, real estate is not a homogeneous product. Rather, every object is unique and individual people interact with each other in every transaction. The wealth of experience of the brokers who accompany the brokerage process must be correspondingly large.