The Impact of Technology in the Real Estate Market
In real estate, one of the main deal breakers has always been the length of time it took to close a deal. This was the same for both residential and commercial properties, but because of the nature of the beast, Commercial Real Estate, CRE, could take months to agree on a selling price and finally close the sale. There is so much to do and so many calculations to make that most contracts were often sent back and forth for revisions between the seller’s broker and the buyer’s broker. Unless you’ve been in the business or ever been party to a sale, you’ll never know just what an amazing impact technology has made on real estate for literally everyone involved.
Immediate Comparables from the MLS
Can you imagine just what the development of the MLS, Multiple Listings Service, meant to agents and brokers of the day? It was amazing finally being able to log onto a computer platform where properties were listed, and all the information was included so that agents could either list or show those properties to prospective sellers and/or buyers. However, brokerages often had to log on via telephone connections to access the MLS central database.
You can think of this kind of platform as the grass roots of what has led to the development of cloud computing. Anyone from anywhere could access the listings, but they had to have a license to access the listings and software that ran the program on the agency computers. Today’s commercial real estate brokerages have the advantage of automated underwriting software which we’ll look at next.
AI in the World of Real Estate Today
In the early days of the MLS, agents spent hours, if not days, sorting through listings and analyzing comps before writing a contract or listing a property. It was a time-consuming process that often kept them from serving other clients. The calculations were often difficult and human error was an ongoing concern. This was especially problematic in commercial real estate where those figures were pertinent to the ROI. Commercial real estate deals often took months to close and if the buyer was unable to find financing or backed out for any other reason, other prospects were lost to other sellers.
Today, those deals are being closed quite quickly due to automated underwriting software for CRE. Where it took agents days on end to locate comps and then do the ROI calculations, AI technology in automated underwriting software can literally spit out results in mere minutes. That’s how far technology has come in real estate within just a few short years!
Time Saved Offers Greater Opportunities
No matter what industry you are in, there is no question that time saved is like money in the bank. Since quicker results can be obtained, this frees a worker to move onto the next task. In real estate this would be in terms of serving buyer or sellers. The time an agent can save on all those financial calculations can be spent finding and serving other clients. Advances in CRE technology have not only saved time and money analyzing data on the MLS but it also all but eliminated errors as well. In a nutshell, that’s the impact of technology in real estate and what an impact it has made.