As 2021 draws to a close, Ali Safavi told I’m constantly being asked what the future of real estate is going to look like. What will 2022 bring? What the next 5 or so years might usher in? It’s the sort of thing that makes you really take notice and not only analyze and speculate on tomorrow, that truly audit today — after all, you can’t glean insight regarding what might be unless you take a long hard look at what is. In this article, we’re going to break down the future of real estate, or at very least the near future. What trends, I imagine we’ll see, what financial changes might be coming our way.
H2: Technology today.
The future of any business is intricately tied to the current technological wave. What pressures tech has on the business and whether the business model is willing to adapt to it. If the COVID pandemic taught us anything, it is that businesses unwilling to change, to be flexible, to adapt to the breakthroughs offered by technology simply cease to exist.
According to Ali Safavi, when lockdowns started to siege this nation, most businesses had no other choice but to finally bulk their infrastructure into the net. Something other firms had long ago done. They were in fact merely playing catch-up — incorporating basic e-commerce platforms and protocols in order to stay alive. Those that refused, those that were unwilling to transform, simply went the way of the do-do. They are now extinct. This is the power of technology. Sooner or later you will have to succumb to its power. Whether it is because of outside intermission – the case of 2020, the pandemic – or on account of your competitor’s can-do attitude and much more friendly demeanor towards it. You will have no choice but to accept technology if you want to survive.
In real estate, our practices are somewhat archaic. Yes, we’ve accepted some technological features, but in general, we still prefer the old methods. The brick and mortar are obsolete and today it’s all about convenience. The convenience of service, the convenience of showings, convenience of alternative financing.
H2: The not so convenient truth
The reality is that real estate, along with most other businesses will have no other choice but to bend to the power of technology and shape their infrastructure and manner of operation. In what way? Let’s take a look at how technology will affect the world of real estate in the next decade.
H3: The power of blockchain
Yes. We’ve heard the term blockchain but most of us associate it with bitcoins, with the volatility of cryptocurrencies. We’re not exactly sure what it is, nor are we aware of why there is such an uproar about it. What does blockchain have to do with insurance companies, banking, politics, law enforcement, retail, and real estate?
Blockchains are digitally secure, almost unbreakable, ledgers. What we fail to understand is that most cryptocurrencies aren’t cryptos at all but tokens. What does this mean? A crypto, like bitcoin, is an asset. A token is something that legally represents an asset. In other words, crypto is a digital banknote. A token is something similar to a stock, or a share. Blockchains help secure and manufacture these representations by way of smart contracts.
Do you know what else these tokens can represent? That’s right, properties. Real estate. These tokens can represent tangible assets, and can represent a home. Imagine what that means for the whole process of escrow, loans, deeds, closings? Imagine what incorporating blockchain into real estate might mean to the way we operate?
H3: Smart contracts
What are smart contracts? They are legally binding agreements whose conditions are coded into their makeup, and they are auto- executable on account of this. For example, you’re making a closing, to finalize it, different conditions were inserted into the contract or sale’s agreement. All these conditions had to pass by multiple middlemen; lawyers, other realtors, banking agents, financial institutions, etc. And for that, once more, every middleman has to sign off on it. Subjective POV is injected into the whole infrastructure, double guessing, biases, stall-tactics, think of all the hassle a closing might come with. Now, erase that. Erase every single one. How? With a smart contract. One that releases the funds once its pre-programmed algorithm determines when conditions are met. One that’s secure, that can’t be reprogrammed or hacked. One whose AI interface, depending on how it was coded between both sides – buyer and seller executes the closing — releasing funds in less than a day to the seller and signing over the deed at the same time to the buyer.
Crowdfunding in real estate has become stable in the business. Nonetheless, thanks – once more to blockchain take and its ability to weaponize or tokenize equity – this old methodology is about to super-charge. How? The biggest problems that crowdfunding had were:
- Trust between entrepreneur & investor.
- Choosing the right crowdfunding platform — since 2009, there have been over 8,000 crowdfunding models.
- Realistic targets and interest rates.
- Project fulfillment.
With blockchain, all these issues become a thing of the past.
Virtual reality, meta-universe, however, you want to call it is coming. It’s coming and there’s absolutely nothing we can do about it. Our whole business model will have to flip and incorporate it. Right now, we can give people virtual tours, thanks to our cameras of a home. Imagine if we could make those tours immersive. Customizable. Unique. Imagine if someone could see their future purchase, with a 360 degree POV. A home that they can set up, right before the viewing with their furniture, future purchases, design features. You’re no longer just showing a property, with an idea of what a home might look like, but an actual home.
H2: The future today
These are just some of the things as realtors that we will be forced to incorporate into our business. Maybe not right away, but sooner rather than later. That’s why we must start to envision them. I’m going to expand on each and everyone in the coming weeks. Give you a detailed look at how they are here to do a clean-sweep of the real estate model and give us new opportunities. New clients. New avenues to grow our business.