Real estate: coronavirus crisis has accelerated the digitalization of the market

Real estate digitalization
Real estate digitalization

The Corona virus crisis and lock down measures have forced the real estate digitalization at a faster rate. If start-ups are a step ahead in this area, historic players are catching up quickly.

If it’s still too early to discuss the impact coronavirus on property prices, one thing is certain. Many promoters are encountering difficulties, in particular at the conclusion of the transactions which were in progress. To continue their commercial activity, these professionals and real estate agencies are betting on digital.

Electronic signature, videoconference and online estimation are the new drivers

Before the crisis, thousands of start-ups were already offering plans of virtual visits to properties on sale. Of course, it wasn’t really necessary for regular sellers. It was more a marketing tool for luxury properties dedicated to foreign investors or tailor-made homes or offices.

Now, even the oldest real estate agencies are trying to generalize this process to all their properties!

If some of them were already using electronic signatures for mandates and sales agreements, corona crisis accelerated the digitalization of core services: real estate advisors’ price estimation by videoconference.

“Since the beginning of the lockdown, our experts have brought together sellers and buyers to carry out remote visits, using applications such as Zoom or WhatsApp. Given the context, we had to revisit certain old methods and to adapt to customers”

Yann Jéhanno, president of Laforêt real estate agency, France

If only 40% of real estate agencies are equipped with secure videoconferencing facilities, this advantage encourages players in the sector to move forward, but while remaining cautious: all the digital tools that are available to buyers will not replace the physical visits. It’s highly recommended for those who wanted to sign a digital sales agreement to insert in the contract a specific withdrawal clause allowing the buyer to withdraw if, by visiting the property, the latter no longer suits him.

A real acceleration in activity for real estate digital start ups

Just like zoom and other digital industry players, real estate digital startups have known a double-digits growth of their sales only in a few weeks.

The health crisis has had a catalytic effect on a trend that was already very present in property development. Promoters are looking for solutions to help them immediately continue their sales, and they are aware that digital is an alternative that allows them to pursue their sales remotely. Therefore, the number of real estate programs digitized have known an increase of 25% in two weeks.

These innovations will remain in place after the crisis and will undoubtedly call for others. Unlatch, leader in France in digitalization of real estate, has for example just extended its solution to older properties.

The future real estate agent: a hologram?

Real estate is an important sector and it was difficult to take the digital turn. Thanks to the lock down, no more choice now … Users have changed their habits and they are more and more asking for digital … This has put a spotlight on some start-ups models that are designed to achieve 100% distance selling!

Pre-Covid, these new players had already sold some properties without asking the buyers to visit by using photos, virtual visit, etc.

It may seem surprising, but if tomorrow the need to move physically is no longer be a golden rule, so the real estate agent of tomorrow may be a hologram: it will move through a property but digitally!

Coronavirus has some negative but also positive influence on the real estate sector. Whether it is the construction methods or the marketing process, we are only at the beginning of digitalization.