By Elizabeth Young, Reonomy,
Member of Real Estate Services Alliance
Over the last few years, technology has revolutionized the real estate world. The market has changed from a Caveat Emptor (buyer beware; the seller may not be telling you everything) to Caveat Venditor (seller beware; the buyer knows everything about you).
This shift of transparency is solely due to technology and the easy access of information it has created.
Investment in real estate technology shows how rapidly this space is growing, and reflects its demand. In 2015 alone, venture capitalists invested roughly 1.5 billion dollars. Brokers and investors are hungrier than ever for tools to gain new clients, get increased transparency, prevent fraud, and improve daily efficiency.
Brokers and lenders are utilizing these tech offerings to further prep themselves on all levels of business, from conversations with landlords to the negotiation of deals. As the real estate space increasingly becomes more cut throat, everyone is looking to gain that competitive edge, which will set them apart. The answer for many: technology.
Technology can take many forms but the most prevalent is the democratization of data. Before the millennium, people had to rely on direct communication with others in an effort to attain information. The most powerful weapon in a lender’s arsenal was his rolodex and research team.
Things have certainly changed. Today, there are several companies providing data on every building, owner, and developer in New York. Lenders no longer need to worry about whether they can trust the details of an opportunity; they can find all the major financials out themselves.
They are empowered to source opportunities on their own, using technology to find the right properties that fit their niche. Not only has external data become easier to find, but internal data is now easier to manage.
Technology is affecting these areas:
- Client Relationship Management – More companies are abandoning the stone age of excel. Client relationships require a system that tracks leads through the sales process and helps maintain healthy relationships, ultimately creating more repeat and referral business.
- Prospecting – There’s still a level of respect for the rolodex, but there’s another more efficient way to prospect and build your network. More brokers are using tech tools that help them prospect buildings that fit their niche.
- Opportunity Data and Market Trends – This industry is becoming more fast paced and lenders simply don’t have time to wait for the research team to verify the value of an opportunity. Technology allows you to do your own due diligence with access to a property’s building, sales, and debt information.
- Financing- Increased competition from nontraditional sources such as crowdfunding has led to exploration and the innovation of new financing products.
- Crowdfunding- Companies such as Fundrise, pull investments from a large number of investors, offering attractive returns.
No matter what technology you implement, look for it to fit a need and not just a want. Technology should not be treated as a silver bullet to company problems, but an enhancement to an already existing process. It is important to choose technology that is right for your company and its specific needs. Keep the focus on solving the problem in front of you, and you’ll have a much higher chance of adoption.
This editorial is part of a frequent collaboration between Real Estate Weekly and Real Estate Services Alliance (“RESA”). RESA is a group of best-in-class service providers who service New York City’s, as well as National, leading principals and corporations.