Levi Olmstead
Digital Transformation in Real Estate (+Examples, Challenges)
- Published: January 5, 2024
- Updated: April 26, 2024
Technology is deeply integrated within real estate, driving innovation and success. Cutting-edge digital technologies and tools are revolutionizing the real estate experience, from buyers to brokers.
By harnessing emerging technologies, real estate firms can boost efficiency, personalize services, and position competitively for the future. Digital transformation has redefining best practices and norms for how real estate will thrive.
61% of those who responded to Deloitte’s 2024 commercial real estate outlook admit their firms’ core technology infrastructures still rely on legacy systems, but nearly half are trying to modernize. That presents the question: what drives effective technology modernization efforts and how can real estate companies implement and integrate them into their business experiences, operations, and processes?
In this article, we’ll discuss areas where the real estate industry is embracing new technologies, explore leading examples and use cases of real estate digitalization, and share best practices on how organizations in the real estate industry can overcome various challenges presented by the digital revolution.
What Is Digital Transformation in Real Estate?
Digital transformation is the integration of digital technologies across the real estate sector. It introduces new tools like artificial intelligence and automation to redefine how real estate firms operate and serve customers, as well as how agents, sellers, and buyers interact. The goal is to boost operational efficiency, improve agent productivity, and keep clients (sellers and buyers) happy with a better experience that includes smoother service.
For professionals, emerging software and tech allow more targeted lead generation, informed market analysis, and streamlined transaction management. Tasks that are manual and time-consuming can be automated and optimized.
For buyers, virtual platforms and modern systems offer options to expand access and convenience. Buyers can dial in on their preferences and explore properties independently. It’s also easier for them to self-educate and prepare to engage with professionals throughout the process.
Core Areas of Digital Transformation in Real Estate
Leaders in real estate are focusing on gaining technological capabilities to streamline processes and add agility and resilience to their operations. But how does that digital transformation take shape in this space? Take a look at some of the areas that see its impact.
1. Customer Experience
Research shows that businesses underestimate how frequently customers encounter poor experiences and friction in buying and selling. This is a critical mistake because when a client or customer has a bad experience, they’re unlikely to recommend the business or return.
The good news is, there are changes you can make to improve the experience. Digital tools enable 24/7 self-service portals where customers can independently search for listings based on their preferences or schedule showings. This self-service paired with automated assistance is empowering. Meanwhile, agents can focus on nurturing relationships and minimize the number of issues or interactions that fall through the cracks.
2. Data and Analytics
Information is more accessible than ever, with the volume of data created worldwide expected to reach over 180 zettabytes by the end of 2025. While that’s a lot of data to manage, the real estate industry can benefit from this when the right systems are in place.
Digital activity creates data trails as customers browse online. Applying advanced analytics techniques helps real estate professionals spot promising opportunities and informs major decisions around investments and positioning.
Tracking customer digital footprints also enables personalized suggestions for individuals. Analytics plus automation delivers personalization at scale. Plus, the ability to make data-powered decisions gives real estate professionals an edge.
3. AI and Automation
In the not-so-distant past, “AI” was just a buzzword. Now generative AI is transforming real estate. McKinsey reports that the real estate industry will see a productivity gain of $110B to $180B, with most of the gain coming from automating real estate marketing and sales tasks.
Moving paperwork like contracts and listings to cloud platforms eliminates manual tracking and sharing of documents. Intelligent automation can also handle administrative tasks. This saves countless hours on repetitive manual workflows. With machines managing the busy work, real estate professionals redirect their energy to what they do best.
4. Business Model Transformation
41% of real estate companies say that they already use technology in redefining their processes. As they implement this technology, the way business is done also shifts. This is a significant change for a traditionally human-centric industry.
Digital tools reduce the need for in-person interactions and speed up various steps for professionals and clients. They also power collaboration between agents. That translates to lower overhead and higher cost savings.
9 Examples of Real Estate Digitalization
What tools and systems are behind digital transformation in real estate? Here’s a look at some of the tools that are modernizing the way the real estate industry operates.
1. Real estate CRMs
Real estate companies use enterprise CRM systems to enable agents and streamline managing contacts, leads, and client communications in one centralized hub. Integrations with sales prospecting, pipeline management, email marketing, and call scheduling tools allow you to track detailed history and interactions with prospects and existing clients.
You can also use this data to gain insights into past behaviors and trends to personalize and improve your service approach. Automated workflows based on behavior can also be set up to send follow-up campaigns to build relationships over time.
For example, by consolidating global sales, marketing, content, and operations on the HubSpot CRM Platform, brokers at Avison Young now have complete client information available in a single view, no matter the clients’ location. This allows them to have more informed interactions.
2. Online self-service lending
Tap into modern borrower expectations with user-friendly, self-serve loan and mortgage platforms that enable homebuyers to complete applications, upload documents, view eligibility, and secure pre-approvals at their own pace.
Increased transparency around rate and fee comparisons may help with their decision-making, while integration with your back-end systems powers efficient processing and status tracking. The result is a smoother experience and more loans closed.
For example, M&T Bank uses Blend’s Mortage Suite. The bank has received positive customer feedback about how easy the application process is. Since implementing the solution, completion rates have been higher, they’ve cut down the time it takes for a pre-approval, and their Net Promoter Score increased.
3. MLS database integration
Using a multiple listing service (MLS) creates exposure for real estate agents and their property listings with a system that allows individuals to search for properties that match their specifications. This boosts buyer awareness and ensures all parties access the most up-to-date information.
That said, some legacy systems aren’t as intuitive as their newer counterparts. User-friendly MLS platforms make it easier to dial into attributes like acreage, school districts, and neighborhood trends that are critical for listings and buyer representation.
For example, the Bridge API makes it possible to request and manage data access from numerous Multiple Listing Services in the United States and Canada and take advantage of additional datasets like public records.
4. Paperless transactions
Printing, managing, or losing track of documents can drain productivity. Accelerate closings by adopting document management tools with electronic signatures and storage. Clients can securely access materials remotely while e-signatures support complete digital workflows.
For example, Camden Property Trust has seen significant savings in time, cost, and effort With DocuSign. Before this solution, a change order was a two-week process. Now, the average time for a document to be signed and completed has decreased by six times, from nearly two weeks to two days.
The security of having digital audit trails on documents can also be important. Consider the role of smart contracts. A property owner can use blockchain architecture to bypass intermediaries and register their properties on a public ledger. They can also sell their properties in a transparent and immutable way to save on transactional costs.
5. AI-powered property appraisal and valuation
Figuring out a property’s value is a moving target that follows market trends that constantly shift. Agents look at many valuation factors to optimally price properties, such as:
- The unique traits of that particular place.
- How popular the area is.
- What price similar homes have sold for in recent months.
By using C3 AI Residential Property Appraisal, Riverside County, California has seen an improvement in the accuracy of appraisals while reducing the complexity of the appraisal process. Now this process is 40% faster.
Supplement your expertise with data-driven valuation tools leveraging advanced algorithms to weigh factors like market trends, days on market, and property attributes. Then take it one step further by identifying a listing price to maximize buyer interest. Ongoing monitoring makes it possible to adapt to market conditions quickly.
You can learn more about AI to value property from Sean Dobson, CEO of real estate investment group Amherst, in the video below:
6. 3D tours and virtual staging
According to the 2023 Home Buyers and Sellers Generational Trends Report, 96% of home buyers used the internet to search for homes. Buyers most often walked through the home they viewed online, before taking the next step to find the real estate agent.
Allow potential buyers to explore listings through 3D walkthroughs and interactive floorplans digitally. You may even take it up by leveraging augmented and virtual reality to showcase properties staged with custom furnishings and decor. This “try before you buy” experience builds excitement and emotional connections that can influence decisions.
Cityscape Realtors used Montuem Virtual Tours and quickly saw business value. The volume of tours skyrocketed, while overhead costs decreased. The agency also reported a 35% increase in sales conversions.
7. 24/7 lead engagement
Conversion rates are eight times higher in the first five minutes, so it’s best to respond to potential clients as soon as possible. However, it can be challenging to keep up and respond to every message right away.
Royal LePage used rlpSPHERE to elevate their professionalism and better meet expectations. This solution allows a broker to generate leads, and then track and service those leads throughout their entire lifecycle, from inception to close.
You can also meet today’s on-demand expectations by implementing AI chatbot technology on your website. This can give home searchers instant access to answers on listings, neighborhoods, and the transaction process at any time of day.
8. Personalized real estate marketing
Research shows that 71% of consumers expect companies to deliver personalized interactions. And 76% get frustrated when this doesn’t happen. Personalization is powered by all the data we access in this digital era.
Increase relevancy by serving buyers customized property recommendations aligned with their preferences and search history. AI algorithms can analyze criteria against all available listings to show the best options automatically.
Strong Analytics worked with a large real estate company. Using data science and AI, they targeted the right audience and optimized marketing campaigns. The result was millions of dollars of incremental revenue.
9. Real estate transaction fraud protection and verification systems
Now that more information and interactions are online, fraud is a more significant threat than ever. However, 74% of cybersecurity breaches are caused by human error. Implementing technology can help you reduce many mistakes and stop fraud.
Guard clients against potential real estate transaction fraud with advanced verification systems. Multi-layered options can authenticate documentation while detecting abnormal activity. This systemized approach provides peace of mind to both buyers and sellers.
Anywhere Real Estate uses CrowdStrike Falcon Insight XDR for endpoint detection and response and CrowdStrike Falcon OverWatch Elite for 24/7 managed threat hunting. There have been zero breaches since the implementation of this solution.
Digitalization Challenges Facing the Real Estate Industry
Once you understand the benefits of digital transformation and the tools that make it possible in real estate, there’s another question. What are the potential roadblocks and how do you overcome them? Be aware of these challenges.
1. Digital upskilling for real estate professionals
Analysis from the National Skills Coalition finds that 92% of jobs analyzed require digital skills.
Still, previous NSC research found one-third of workers don’t have the foundational digital skills necessary to enter and thrive in today’s jobs. This is further compounded in the real estate sector, with the average age of a real estate professional being 54, older than other industries with a younger, more tech-savvy workforce.
Successfully upskilling real estate professionals requires assessment, training delivery, and reinforcement of a continuous learning culture.
First, evaluate current staff capabilities around digital adoption for your existing technologies and software applications. Identify specific skills gaps limiting progress and recognize that those less familiar with technology may have a more challenging time adapting to some systems. From here, you can figure out what to prioritize.
Then, provide educational resources and training for any new tools or capabilities. Complement this with readily accessible support resources that provide performance support to all technology end-users, in the flow of work. This can be accomplished with contextual in-app support that provides nudges, tips, and resources at moments of friction.
With in-app guidance and embedded performance support, real estate professionals are empowered to fully utilize new software in the flow of work, removing barriers that hinder productivity and technology adoption.
Finally, embed digital literacy as a part of ongoing professional development, rather than a one-off training initiative. Patience and commitment to upskilling is a requirement for organization-wide adoption and optimization.
2. Data migration From legacy systems
Transitioning from legacy databases and software platforms to modernized real estate information systems is a challenging feat. Especially when you need to consider the data you already have, plus how you’ll handle the continuing influx of new data.
Your first steps in legacy application modernization should include documenting field definitions, workflow configuration across processes, mapping business processes, and integrating touchpoints between software systems. Account for all reporting and analytics dependent on your current datasets. This process will allow you to get a sense of the current state of your data.
You’ll need to standardize your data sets to capture essential records from multiple legacy environments before converting. Then, methodically test conversion accuracy before moving your data and transitioning away from legacy systems. Enlisting the help of a digital transformation consulting company for migration can make the whole process smoother, and help you complete your transformation journey faster.
3. Breaking down data silos
Large organizations use an average of 367 different software tools, creating data silos and disrupting processes. This makes it difficult for workers to collaborate within their teams and with those in other departments.
A complete view of real estate operations requires bridging the gaps between data and departments. To achieve that, you must make integrated data management a priority across the organization. Create clear policies and standard operation procedures (SOPs) for data access, security, and retention.
On the technical side, bringing all data into unified systems is crucial but challenging. Consolidate the underlying infrastructure, so everyone works from a common starting point. Your goal should be to put systems in place to reduce these silos and increase transparency.
4. Providing contextual end-user support
If you don’t have assistance when adopting new applications, technologies, or processes, you will be unable to maximize the value of your digital investments. There will always be a learning curve to help new users. Still, with a contextual end-user support strategy, you can provide real-time assistance that enables your agents without hindering productivity.
Set up a help desk so end-users can access troubleshooting guides, submit tickets for help, or start remote assistance sessions for on-the-spot solutions. You can supplement this with online courses, in-app tooltips, forums, and other self-service options so your team can avoid the sense of overwhelm.
Then do some digging into support requests to understand user proficiency levels. Some need technical guidance, while others have basic “how-to” questions. You aim to catch tech adoption barriers for your team and your clients or customers.
With a digital adoption platform (DAP) like Whatfix, real estate organizations can enable their end-users to fully adopt new technologies, follow complex digital workflows, and achieve heightened levels of productivity through a mix of in-app guidance and contextual support.
Whatfix’s Visual Editor provides a no-code solution to create and launch in-app experiences and elements that provide contextual guidance and support to end-users in the flow of work, like interactive walkthroughs, new user checklists, tooltips, field validations, and embedded resource centers.
5. Ensuring compliance and data security
Failing to implement rigorous data protection safeguards and compliance can expose all parties to significant financial and reputational risks. Still, implementing new security measures can be complex, hindering productivity if you don’t handle it with care.
Have a process to monitor regulatory policies around privacy, record retention, and data handling to maintain compliance. Conduct recurring audits internally and via third parties to certify defenses stay resilient as threats evolve.
In terms of internal security, establish data loss prevention controls blocking unauthorized access. Encrypt stored assets and securely transmit documents. You may also perform routine penetration testing to locate technical vulnerabilities before hackers can exploit them.
With a DAP like Whatfix, provide in-app Smart Tips at key moments to end-users for compliance reminders and data threats. You can also enable end-users with Field Validations to keep data entry standardized and in the right format.
6. Using data to optimize processes
Tapping into real estate data to grasp performance, pinpoint problems, and uncover improvements is vital to keeping up. However, this reality is still out of reach for many firms who don’t know how to make the most of their data.
You can start by compiling listing details, contract templates, and consumer engagement metrics into unified databases. When organizing your data, consider your existing workflows and how connecting different puzzle pieces can improve them.
Whatfix’s Analytics empowers IT and product teams to analyze their digital workflows and end-user behavior across internal applications used by agents and customer-facing experiences used by buyers and sellers to identify areas of friction, allowing them to address these trouble areas with new in-app support and moment-of-need guidance. This creates more contextual experiences for different end-users, optimizes workflows with the most efficient processes, and drives overall software adoption.
7. Driving end-user adoption of new technologies
Motivating agents, clients, and partners to adopt new tools can be tricky. To get people on board, you must show how new tools and systems will support workflows without causing significant disruption or compromising quality.
For agents, showcase tools that speed up day-to-day tasks automatically—for example, notifications, file-sharing, and status transparency. Appeal to brokerages by quantifying efficiency gains, faster deals, and added capacity.
Consumer-wise, lean into the convenience of self-service. This means things like instantly discovering or viewing properties instead of needing to wait on an agent’s schedule. Support their informed decisions through interactive pricing models. Show them how to navigate the process at a time and place that works best for them.
As people begin to learn about the technologies that are part of your digital transformation and have success, share their stories. This kind of social proof can go a long way to help those who are hesitant to embrace the change. Understanding metrics to keep an eye on and tracking user adoption can help you determine if you’re on the right path.
Software clicks better with Whatfix's digital adoption platform
Enable your employees with in-app guidance, self-help support, process changes alerts, pop-ups for department announcements, and field validations to improve data accuracy.
Real Estate Technology & Software Clicks With Whatfix
Accelerate your real estate digital transformation by enabling your employees and customers with contextual in-app guidance and real-time support with Whatfix’s digital adoption platform (DAP).
Whatfix enables real estate enterprises with its no-code Visual Editor to create in-app, moment-of-need support and contextual guidance. This reduces time-to-proficiency and achieves new levels of productivity and proficiency through better software adoption. It also provides customers with self-service, personalized, and guided user experiences.
Whatfix empowers a data-driven approach by analyzing tech experiences with end-user behavioral analytics and event tracking. This identifies areas of friction in your digital processes and tech experiences, allowing you to create optimal, contextual user journeys across various end-user segments. Use Whatfix’s Visual Editor to overcome these friction areas with additional in-app guidance, nudges, queues, and support.
How does it work? Whatfix empowers real estate organizations to:
- Create in-app Flows and Task Lists that guide employees and customers step-by-step through digital processes and applications.
- Enable end-users with Self Help, providing a searchable help wiki that connects to all your help and support documentation, FAQs, help desk articles, and more – that overlays on your digital UI.
- Notify end-users of application process updates, compliance changes, company announcements, and more with Pop-Ups and Beacons.
- Provide contextual Smart Tips that enable end-users with timely information that nudges the to take the correct in-app action.
- Use Field Validation to ensure data is entered in full, in the correct format.
- Collect end-user feedback such as NPS, training and onboarding feedback, and bug identification with In-App Surveys.
- Analyze end-user behavior with User Actions and Enterprise Insights by tracking custom in-app events to optimize user journeys, segment users into cohorts, identify areas of friction, and more.
With Whatfix, you can understand how technology is being used and what is being underused. This makes it easier to adjust software training and adoption strategies. All to empower agents, brokers, and clients to reach new levels of success with digital tools.
Real estate software clicks better with Whatfix. Request a demo today.
What Is Whatfix?
Whatfix is a digital adoption platform that provides organizations with a no-code editor to create in-app guidance on any application that looks 100% native. With Whatfix, create interactive walkthroughs, product tours, task lists, smart tips, field validation, self-help wikis, hotspots, and more. Understand how users are engaging with your applications with advanced product analytics.
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Software Clicks With Whatfix
Whatfix's digital adoption platform empowers your employees, customers, and end-users with in-app guidance, reinforcement learning, and contextual self-help support to find maximum value from software.
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What Is a Digital Adoption Platform?
DAPs enable technology users with contextual in-app guidance and real-time support to guide them through business processes and to learn in the flow of work.