High-tech real estate
Brokers say technology speeds transactions, but their jobs are not becoming obsolete
When brokers at Cushman & Wakefield|Thalhimer wanted to show potential clients what the view from the proposed Reynolds South Plant office tower on the James River would look like, they didn’t bother with conceptual drawings — they hired a drone.
“We had the drone go up to the height of 15 floors and spin around so people could see the views you’d have from that height of the river and downtown,” says Brad McGetrick, director of brokerage services for the Henrico County-based firm.
Like other industries, real estate has been transformed in recent years by the supersonic momentum of technological advances. From drones to smartphones, tablets, apps and online databases, real estate professionals and their clients have access to more information about properties than ever before — and it’s available almost instantaneously from practically anywhere.
“The speed at which we communicate now is just phenomenal,” says Jay Mitchell, vice president of the Virginia Association of Realtors and managing broker with Berkshire Hathaway Home Services Towne Realty in Virginia Beach. “Sometimes we’re negotiating contracts all by text. … I’ve known agents who have done deals, and they’ve never even spoken to the other agent involved — they’ve texted, they’ve emailed and they’ve maybe never even met [in person]. I’m not saying that’s great – I’m just saying it’s how some of it is happening now.”
So is less human interaction a good thing? Do residential agents and commercial brokers fear their jobs are becoming obsolete?
While technology has changed their jobs considerably, these real estate pros say they remain an integral part of the process. That’s because real estate is, at its heart, about relationships and insider knowledge.
Technology enhances the profession, says Deborah K. Stearns, senior vice president in JLL’s Hampton Roads office. Yet, “data alone does not answer questions or allow a user or tenant to make quality judgmental decisions about the property,” she adds.
Commercial brokers know their communities and can give clients information on such things as “whether there’s a new road coming up, whether there’s demographics that complement or don’t complement their business [and] any sort of zoning issues,” says Stearns. Then there’s the fine print of leasing and sales contracts, not to mention tenant build-outs, where clients need professional advice.
Many brokers also are knowledgeable about local schools, neighborhoods and politics — quality-of-life issues that can make or break a deal.
Mitchell likes to think that’s where Realtors earn their keep. “By really knowing the market, knowing the people and being able to guide their clients to properties they can’t possibly find electronically. I’ve been in Rotary for over 20 years. … I hear things from my Rotary friends. I know X house may be coming on the market. … That’s the kind of stuff you are never, ever going to get on somebody’s app. … That has to be relationship driven.”
Keeping a relationship focus while staying up to speed on technology is the new balancing act for real estate pros.
It’s not unusual for residential and commercial brokers to carry tablet computers that allow them to check property listings and emails, show clients videos and photos and get electronic signatures on contracts.
Smartphones are invaluable not only for texting but also for sending and taking property photos. Some professionals upload their own smartphone photos to real estate databases when they’re in a rush to get a property listed. Others tell stories about using Skype or FaceTime video calls to discuss real estate listings with faraway clients.
As for drones, they’re still viewed as experimental in the industry, but they’re also in wide use.
Richmond-based aerial photographer Richard MacDonald has been working for commercial real estate clients for 20 years and explains that drones have opened up new vistas. A photographer on a cherry picker or ladder can shoot at a height of about 30 feet. A helicopter flies at about 400 to 500 feet. Drones are filling the gap between the two with dynamic, high-definition aerial videos and photos that were previously impossible to get.
“Everyone’s excited about it. There’s no question about that,” says MacDonald, president and director of photography for Henrico County-based New Media Systems Inc. Renting a professional aerial camera and helicopter for the day can cost a client as much as $25,000, he says, while hiring a drone is a far more affordable option, with some operators charging $500 to $1,000 per commercial property.
MacDonald says he counsels clients to use drone footage and photos as one piece of the overall marketing package, including it in video and photo packages with ground-level photos and traditional aerial photos when necessary.
Drones provide images and data in real time. In addition to a photo of a property, footage from drones shows local infrastructure, roadways and a property’s proximity to competitors. Some also are used to take indoor aerial footage within large warehouse spaces.
These days one popular technological tool for commercial brokers is the online subscription service CoStar. It is a one-stop, Web-based subscription service that allows brokers to market and research properties as well as to obtain detailed market analytics. The data includes comparable sales, multifamily leasing rates, marketplace trends, demographic data and maps.
CoStar Group Inc., based in Washington, D.C., also owns LoopNet, a commercial real estate listing service that offers a more limited number of features that the public can search for free.
“It’s essential. They’re a monopoly,” says Stearns, noting that CoStar is both indispensable and very expensive. “They require all the agents [in a firm] to be licensed, and if you’ve got a big shop, that’s a lot of money.”
Property search begins online
On the residential side, perhaps the biggest change wrought by technology is how much data are available to the public. Websites such as Zillow and Trulia, which Zillow recently acquired, provide real estate listings, property estimates and neighborhood information.
Five to 10 years ago, it wasn’t uncomon for Realtors to perform all the detective work to assemble listings of available homes that met buyers’ needs. Now, “90 percent of the consumers have been online before they call a Realtor, which helps us. They have done a lot of researching prior to that,” says Bill White, president of the Virginia Association of Realtors, a statewide trade organization, and president/owner of Richmond-based Joyner Fine Properties. “Most people have been to at least two or sometimes three national [real estate listing] websites before they call us.”
In a recent report from the National Association of Realtors, 42 percent of a group of recent homebuyers said the first step they took in the home-buying process was to search online for properties while 14 percent contacted a real estate agent.
The upshot of all this research can be a speedier, better transaction. “Where in the past a Realtor may have spent an entire day driving all around town to see 10 properties, and a buyer really doesn’t like eight of them, they can go through them online, see the things they don’t like and spend less time on the road with fewer headaches,” says Rachael Joyner, director of relocation and e-marketing at Joyner Fine Properties.
Social media also plays a growing role in marketing properties. Clients often are engaged in marketing their real estate listings on social networks, using tools such as virtual tours, professional photos and Web pages provided by Realtors, Joyner says.
Consequently, the role of residential real estate agents has evolved more from research and marketing to analysis and advocacy. They still help people navigate through the complicated process of making what is typically one of their largest purchases. “We kind of moved to the role of lifestyle analysis as well as the brick and mortar analysis,” says White. “We probably ask more [quality of life] questions than we used to do … and do more counseling than we do selling.”
As for commercial brokers, they say their process is streamlined by technology as well, especially by CoStar. “Rather than spend a half a day driving around looking at office buildings and calling [phone numbers] off the signs, this is a ballpark way of seeing what’s available quickly,” says Matt Anderson, senior vice president with CBRE|Richmond. “It’s a very good starting point. From an efficiency standpoint, it saves a lot of time.”