Before the rise of real estate technology, it was hard to know a home’s value until a state-licensed appraiser visited the property and made an estimate, weighing pros like a chic patio against cons like a mildewy basement.
Today, artificial intelligence and neural networking can do the work of appraisers. Zillow’s free Zestimate tool is one popular option on the market.
“It’s always been this attempt at a starting point in home valuation for everyone who’s bought and sold and owns a home,” said Nicholas Stephens, director of product management at Zillow.
What Is Real Estate Technology?
Real estate technology comes in many forms, and it can be classified as any website, app or software used to find, sell or manage real estate. Real estate tech overlaps with proptech (property tech), which is typically used by real estate professionals, underwriters, developers, property managers, title companies and banks.
Zillow is a prime example of real estate tech. Since it debuted in 2006, the Zestimate’s internal algorithm has drawn on traditional real estate metrics (bedroom and bathroom count, square footage) as well as contextual data, like local tax records. When people list their homes for sale on Zillow, they upload pictures; the Zestimate can “see” these photos using cutting-edge computer vision techniques and factor elements like natural light and curb appeal into its estimates.
The Zestimate’s median error hovers just above 3 percent. In other words, half of its estimates are within 3 percent of a home’s actual selling price. That’s a massive improvement since Zillow’s early days when the Zestimate had a median error of 14 percent.
Zillow isn’t the only company that foresees a shift in real estate appraisal. The more powerful AI technology becomes, the more automated valuation models (or AVMs) sprout up.
Real Estate Technology Trends
Tech has fundamentally changed how the real estate sector operates. For one, it has sped up transactions. Discovering real estate listings and setting up showings used to take days. Today, not so much. On-demand information and services are standard in this hyper-connected era, and the real estate industry has responded to consumer demand for immediacy.
Redfin debuted Instant Updates more than a decade ago, and the feature has only gotten faster in the intervening years.
“People can sign up for notifications for the types of homes that they’re looking for,” said Jen Chao, vice president of engineering at Redfin. “We can notify our customers faster than anybody else, so they can be the first to find out about homes that are hitting the market or price changes.”
Real estate technology has also accelerated the booking process for viewing homes. Redfin’s “Book It Now” feature is just one example. The feature allows users to schedule a home tour in just a few clicks.
In fact, a recent trend — instant buying, or iBuying — extends this on-demand ethos to selling a home, a sometimes interminable-seeming process. But selling to iBuyers takes only a few days. The companies make prompt, algorithm-driven offers, pay in cash and sell homes themselves — often sprucing them up in the process.
Today, iBuying represents only a sliver of all real estate transactions, but that’s poised to change. In 2018, Zillow Offers bought fewer than 700 homes, according to the New York Times, but it expects to scale that up to 5,000 homes per month by 2024.
For her part, Redfin’s Chao sees proptech heading toward what she calls the “complete solution.” Redfin hopes to eventually become a one-stop shop, so it can provide a seamless home-buying experience. But this doesn’t mean real estate professionals and agents will be pushed out.
“Real estate is a highly personal service,” Chao said. “[We use] technology to streamline and get rid of the [tasks] that software can do really well, to free up time for agents to focus on the things that require the human touch.”
Real Estate Technology Companies to Know
Real estate technology companies are constantly growing and changing with the housing market. When it comes to staying up to date on major players in the industry, there are plenty to sift through. Here are some real estate technology companies to keep an eye on.
Location: Chicago, Illinois
Purchasing Platform connects property management companies with vendors. The company offers automated spend management technology that helps streamline procurement for property managers. Its offerings include a business-to-business marketplace and tools for vendor management and spend control.
Location: Denver, Colorado
FRONTSTEPS’ software platform is built specifically for homeowners associations, offering solutions for efficiently managing back-office operations, payments and security. The technology comes with tools for efficiently overseeing budgeting and financial reporting, for example, and keeping track of resident data.
Location: New York, New York
Valon says it aims to “bring simplicity, dependability and humanity to homeownership.” In the area of mortgage management, for example, Valon offers tools for an easy digital transfer process, instant payments and access to account insights. Valon also connects people interested in buying a home to its loan experts so they can initiate the process for pre-approval and streamline the home buying experience.
Location: Austin, Texas
CertifID has a suite of products designed to prevent wire fraud in real estate transactions. Its offerings cover identity verification, for example, and provide customers with a solution for securely sharing wire instructions. The company also employs a team of experts who specialize in delivering fraud recovery services.
Location: Fully remote
Cove develops technology for tracking and communicating about work orders, inspections and other elements of managing building operations, as well as creating optimal tenant experiences through features like amenity reservations and visitor registration. Cove’s offerings can be used for buildings in the office, residential, medical, retail and industrial sectors.
Location: New york, New York
EliseAI offers property management solutions through an AI-powered platform designed to handle engagement of prospective renters and provide support to current residents. The product’s features include an operations management hub, automated lease renewal reminders and capabilities for responding to leads via text, email, phone call and web chat.
Location: Chicago, Illinois
Neighborhoods.com is an online search platform that allows prospective homebuyers to search for homes for sale. The platform aims to help buyers understand the neighborhood a home is located in by providing school, walkability and local business data. The website allows users to create a profile and save homes, and entire neighborhoods, that they like. The company is also the parent of 55places.com, a real estate website specializing in retirement communities and offering mortgage options for buyers over the age of 62.
Location: Austin, Texas
Closinglock serves the real estate industry with fraud protection technology, helping law firms and financial service providers avoid problems like wire fraud and seller impersonation. Working alongside closing companies, property buyers and property lenders, Closinglock’s platform enables users to share wire transfer instructions with clients, collect electronic signatures and verify bank information.
Location: Seattle, Washington
Redfin is an online platform that allows users to find and post listings for rentals and homes for sale. The platform allows users to filter options by offering landing pages for listings by state, city and listing type. The company’s website also features a mortgage comparison tool that allows prospective homebuyers to enter a desired location, home price and down payment to see the rates of different loan companies.
Location: New York, New York
Bilt Rewards offers a rewards program for renters, allowing them to redeem points for travel, shopping, fitness, rent payments or more after paying their rent. Renters can also save up their points for a home down payment. Bilt Rewards also offers a credit card solution for renters who don’t reside in one of its two million participating properties to access the same rewards while improving their credit.
Location: Santa Monica, California
Ylopo brings together marketing expertise and engineering proficiency to deliver digital marketing solutions for the real estate industry. Its offerings include lead generation solutions, conversational AI for voice and text communication with prospects and web design services. The company also offers webinars and other training resources.
Location: San Francisco, California
Trulia is an online platform that allows users to see homes for rent and for sale The company also features a neighborhoods platform that showcases resident reviews, photos and comments. Trulia also offers tools to make finding a mortgage more streamlined, such as an affordability, mortgage and refinance calculators.
Location: Denver, Colorado
Homebot’s real estate platform helps loan officers and real estate agents connect with, engage and retain clients. It provides homeowners with detailed, accurate information and insights about their properties and the equity they hold. The company says its tech empowers them to make better real estate decisions.
Location: New York, New York
Findigs is a digital platform for rental real estate. It uses underwriting technology to serve renters by allowing them to file one set of application documents that are automatically vetted and submitted, then automating the response process. It also serves property owners and managers by providing a verified pool of applicants and eliminating the legwork of chasing documents.
Location: Fully Remote
Endpoint is a real estate fintech company that handles property closing processes and transactions. The Endpoint Platform brings together the buyer, seller and both parties’ agents so that everyone can view and sign digital title documents and securely transfer escrow funds in one transparent location. Endpoint also offers the Jot signing platform for fast and easy notarization of documents.
Location: Boston, Massachusetts
Hometap makes home equity investments so that homeowners take advantage of the future value of their property. The company says its strategy allows homeowners to access up to $600,000 without taking out a loan or dealing with the burden of monthly payments. Hometap has investment operations in more than a dozen U.S. states.
Location: Denver, Colorado
AIR Communities is a real estate company, holding and operating a significant number of multifamily apartments across the country. Properties such as the beachfront Ocean House in La Jolla, California and prime-Manhattan Milan Apartments in NYC are managed through a combination of white-glove professional staffing and centralized technology protocols that standardize processes such as rent collection and lease renewals.
Location: Los Angeles, California
Crexi is a software company that focuses on commercial real estate. It operates an online platform that facilitates property transactions, allowing users to list properties, identify listings that meet their needs and evaluate potential deals based on data and property records. Crexi provides tools to buyers, brokers and tenants and has helped close billions of dollars in property transactions since the company’s 2015 founding.
Location: Santa Clara, California
Realtor.com provides homebuyers and sellers with a marketplace platform of for-sale properties. The company also equips users with the information, tools and real estate expertise needed to assist them through each step of their home journey. Through Realtor.com’s website and apps, the company helps people make valuable connections while confidently navigating their real estate process with insights and guidance.
Location: Fort Collins, Colorado
TurboTenant is a real estate software company that makes property management products geared toward second-income landlords. By providing professionalized, and often automated, processes for collecting rent, marketing their property, screening tenants, accounting and document filing, the software streamlines the work of property management.
Location: Seattle, Washington
Although Zillow’s Zestimate tool is one of its most popular features, the platform also offers users options to search for real estate for sale and for rent as well as offering its own home loan service. The platform also allows users to find local real estate agents, list rentals and sell homes directly through a Zillow agent or post a listing for free for homeowners selling their own homes.
Location: San Francisco, California
Opendoor is an iBuyer that simplifies the home buying and selling process, making it “as easy as buying and selling cars,” according to The New York Times. The company buys houses in cash, typically closing in 10 to 60 days. Then it resells them via the Opendoor app, backing sales with a 90-day guarantee: if the buyer doesn’t like it, the company will buy it back. Currently, Opendoor buys and sells homes in more than 35 cities across the United States.
Location: New York, New York
Perchwell makes software and data solutions for real estate professionals. Brokers can use the Perchwell platform to unify data from multiple sources, and the technology lets users complete tasks like making changes to a property listing via a desktop computer or mobile device. The platform also comes with an AI tool for efficiently producing and optimizing property descriptions.
Location: Fully Remote
Buildout operates a platform for commercial real estate brokers. They can build individual landing pages automatically populated with their existing listings to capture client contact information and initiate deals. The platform includes a CRM with property data, call and task lists and analytics on deal cycles. It also offers branded marketing materials like brochures and flyers, centrally housed in the platform’s Docs section so they can be easily edited and reissued.
Location: Boston, Massachusetts
Stavvy is a digital mortgage platform that replaces paper documents with digital versions in the real estate space. It allows lenders, notaries, buyers and other entities to collaborate securely on documents, increasing efficiency and cutting down on paper waste. Its eClosing product facilitates the fast closings that are becoming more typical in today’s fast-paced real estate market, while its foreclosure and loss mitigation products allow legal teams to speed up tedious processes.
Location: New York, New York
VTS’s commercial real estate investment platform helps with four categories: asset and investment strategies, online leasing, tenant experiences and digital marketing. Each category harnesses real-time first-party data that helps fuel investments. VTS Platform can be used by agency brokers, landlords and tenant representatives.
