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Shopping for a new home today is daunting. Mortgage rates are rising. In many markets, supply is so scarce that bidding wars are the norm.
Uncertainty – and stress – abound. Can I afford this home? Will I be happy here?
But the homebuying process is changing rapidly. And two new tools in particular – artificial intelligence and augmented reality – are poised to make it a better experience. By reducing unknowns, these technologies can save buyers money and alleviate anxiety.
Take one of the most vexing questions home buyers face – is the property worth the price? Traditionally, answering that question has required time-consuming, hands-on research into what similar homes have sold for, as well as factors like the home's condition and emerging market trends. The answer was a matter of informed but subjective judgment.
Today, though, AI-based software can eliminate much of the labor and guesswork. These programs gather massive amounts of data and use algorithms to generate valuations that are much more accurate than what humans can come up with on their own. This helps create a more efficient and transparent market – one in which both buyers and sellers can have confidence that they're getting a fair deal. Realtors® are already using AI-powered valuation tools from companies like FoxyAI and Kukun to help their clients.
AI-based software also has enormous potential to simplify the due diligence process, accelerating everything from land surveys to title searches and helping buyers quickly identify any problems with a property.
Of course, choosing a new home is about more than market analysis and due diligence. The final decision usually comes down to unquantifiable factors such as how a home feels. New technology can help in this area, too.
Virtual home tours – the most basic of which show 360-degree images on a two-dimensional screen – have been around for a while and got a boost during the pandemic when people couldn't commingle.
But they've struggled to gain traction among home buyers. According to research by the National Association of Realtors®, only 39% of buyers who used the internet to shop for a home found virtual tours "very useful."
That may soon change. Tech platforms like Infinityy are making virtual tours more immersive – and thus more valuable to buyers and sellers alike.
Most of us don't have a designer's eye to re-envision a space. So, when we see an empty room – or one staged with the sort of furniture we dislike – it's hard to grasp the possibilities. But AI-driven design platforms like REImagine Home, RenovateAI and Virtualstaging AI are making it easier for homebuyers to envision what they could do. Upload a photo and let the software generate dozens of designs, which can make it much easier to know if a space is right.
And now, Realtors® are using augmented and virtual reality to supercharge home tours.
Augmented reality – the technology used in games like Pokémon GO – layers digital images over the actual physical world. It can help would-be homebuyers make more informed decisions, for instance, by adding a piece of artwork or desk to a room, a wraparound porch to a house or a pool to a yard.
Nothing can take all the stress out of buying a home. It's the biggest purchase most people make, and buyers still must contend with mortgage rates and negotiating a final deal.
But these emerging technologies, which are increasingly part of Realtors'® toolkit, promise to remove much of the guesswork and inefficiency from the process. And while home prices may fluctuate, having confidence that you've made the right decision will never lose its value.
Dan Weisman is Director of Innovation Strategy within the Strategic Business, Innovation & Technology group at the National Association of REALTORS®. He researches technology and strategizes on what it may mean in the future and builds relationships with tech leaders to better understand and drive innovation in the real estate space. Weisman organizes NAR’s iOi platform (ioi.realtor), which accelerates and fuels real estate technology, and contributes to NAR’s Emerging Technology Blog (nar.realtor/blogs/emerging-technology).
