Not long ago, a real estate agent in Singapore pocketed US$132,800 of a client’s money and used it to renovate his own home. He was caught and jailed for it, but such cases have, unfortunately, occurred more than once in the city-state’s property landscape.
This is obviously a cause of concern with genuine homebuyers. If one wishes to transact through an agent, how would clients find a trustworthy broker?
This is where proptech comes into play.
Digital brokerage models such as Redfin (United States), Lianjia (China), and Bluenest (Singapore) bring greater efficiency and transparency to their respective property markets. These platforms blend technology with the expertise of local real estate agents to organise workflows and reduce information asymmetry.
How proptech bridges the information gap in the market
For example, US-based Redfin displays data on their agents’ property transactions as well as customer reviews. This way, clients need not rely solely on the word of friends or family to gauge whether an agent would be a good fit for them.
Redfin also pioneered map-based property searches in the US, allowing buyers to view key data points about each property and even compare shortlisted units side by side.
Closer to home, Bluenest uses an AI platform to generate indicative price estimates for properties, giving buyers and sellers more accurate information to begin their transaction journeys. The agency has also come up with a commission model that pegs agent compensation to customer satisfaction, incentivising agents to work in their clients’ best interest.
What else does it bring?
At this point, property agents are independent contractors who have to handle the entire transaction process from start to finish. But up to 80 per cent of their time can be spent driving to different viewings, marketing properties, and sourcing for leads.
This is an inefficient process – and the costs are generally passed on to the end-users.
Proptech resolves this in a few ways:
Better data and control
By aggregating property listings on just a few platforms, digital real estate brokerages can provide more detailed metrics about the performance of property listings. Clients have easy access to this data, which grants them more control over the transaction process.
Also Read: Thailand’s proptech FazWaz secures pre-Series A funding from undisclosed Singaporean group
More choices
Instead of relying primarily on information passed on from their agents, clients have the freedom to browse through and shortlist property listings on their own.
Less time spent travelling
Virtual listings and 360° online tours enable users to view properties from the comfort of their own homes. This eliminates one of the major headaches in the house-hunting process: being stuck in traffic. Traffic congestion is a real problem in Southeast Asia, with one study finding that the average Filipino loses 16 days a year to it.
Greater exposure targeted marketing: By outsourcing marketing to the digital agency’s operations team, property agents can help their clients list their properties on all the major portals quickly and effectively. Agents can then focus on advisory, leading to a higher-than-average closing rate for their clients.
The end result? Agents help their customer’s close deals faster, and clients save a significant amount of commission.
Also Read: Proptech is changing the face of real estate in Asia Pacific
Such technology will take precedence over the traditional ways of doing things in the coming years. Internet penetration in Southeast Asia may only be at 65 per cent today, but we are expecting double-digit growth year-on-year.
New adopters will quickly adapt to existing tech in the property market, further leveraging on it to resolve issues such as:
- The fragmented real estate market (i.e. inaccurate or simply a lack of information). Good governance and support are required for a successful transformation to take place. Back at home, the Singapore government launched the Smart Nation Initiative, which includes a “Real Estate Industry Transformation Map.” This map established a workgroup to focus on creating and streamlining standardised processes by 2020, including the implementation of digitalised contract templates and checklists.
- Lengthy transaction times and inconsistent user experiences. Today, we can easily shop online and check out with a single click. In the same vein, we should expect the convergence of proptech so that customers can purchase their ideal homes with a few clicks.
With technology already revolutionising fields such as transportation, commerce, agriculture, and even construction, it was only a matter of time before the property scene caught up.
And it is sorely needed, too – consumers are becoming more and more discerning and will demand no less.
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