The thought of buying a house without stepping inside was once inconceivable for most people, and agents. But the COVID-19 pandemic forced us to change how we think about viewing and inspecting real estate., and that necessity gave us a taste for sustainable possibilities.
In Melbourne, the spring 2021 selling season was curtailed by a ban on private real estate inspections, while in Sydney only one-on-one inspections were permitted for months. But despite restrictions, Domain recorded an 18% increase in virtual tours in August 2021 compared to the previous month.
Increasing property prices, particularly in Melbourne and Sydney, were also driving buyers to make an offer on homes they’d not seen in person. The Guardian tells the story of 35-year-old Erin Lyall and her partner who made an offer on their first house in South Melbourne that "they had seen only through photos and videos" and a pest inspection.
A tight market means buyers are motivated by a fear of missing out, combined with rapidly increasing prices. Buying a property unseen feels like less of a risk than waiting a few months and potentially paying hundreds of thousands of dollars more.
It might be a controversial view, but we believe the popularity of virtual inspections should be encouraged now restrictions are lifting. They may not replace open homes entirely, but there’s an argument to be made that they’re an overdue essential to the real estate campaign, both for sales and rental markets.
Clever virtual reality and artificial intelligence (AI) tools available now can analyse and compare images of specific areas in a rental home, for example, to determine wear and tear on carpet over time, or identify new marks on walls, based on photos sent by tenants for mid-lease inspections.
Why are virtual home inspections popular post-Covid?
Obviously need drives demand, so with lockdown it forced people still seeking a new home to try virtual inspections without a sense of missing competitive advantage. But once real estate agents start standing at front doors with their clipboards again – the length of physical line waiting to go in should no longer be an indicator of demand.
Put simply - physical inspections give agents and vendors a sense of momentum and demand, while virtual home inspections put people first.
Virtual home inspections are:
More time efficient: people can inspect a property at the time that suits them, not when it is scheduled. They also don’t need to feel rushed to get through within 15 minutes before making such a significant life decision.
Less travel: buyers and tenants don’t need to battle traffic (or fly interstate or even internationally) to inspect a home in a different area to where they currently live. This is more convenient for people, as well as better for the environment.
More considered: it’s easy for homes to all blur into one and for features to get mixed up in the buyer's mind. Virtual real estate tours mean people can go back and view again, check and compare features and feel more confident that a home will meet their needs.
COVID-safe: ongoing restrictions in many LGAs across Australia mean that open houses are simply not possible. For others one-on-one inspections need to be booked. This can be time-consuming for both agents and buyers.
What makes a good virtual real estate experience?
Of course, it can be hard to fully capture a property in a virtual format and some buyers and tenants will always want to complete an in-person inspection. However, it can streamline the selection process and ensure that any one-on-one viewings are already for engaged people who are at the point of actively considering an offer, or being ready to move, rather than just assessing options.
Trends in North America suggest that “tire kickers” are inspecting properties virtually, and then only physically inspecting once a buyer is ready to sign.
To provide a comprehensive virtual inspection experience, there’s a lot of elements to consider, including:
Video tour: Showcasing key elements of the property.
3D walkthrough: Giving people the potential to get a sense for the flow of the home, even possibly using virtual reality tools
Drone footage: This can be used to move through the home, as well as any outdoor space and potentially showing the surrounding neighbourhood.
Artist impressions of potential renovations: For properties that are ripe for renovation, virtual tools can be used to show how potential extensions, renovations or even brand-new builds could come to life at a site.
Virtual staging: It can be hard to showcase an empty home or one with dated furnishings. Most people these days opt to sell a home staged. But virtual staging is a cost-effective alternative, especially when buyers are only viewing a property remotely, saving time and effort for vendors and agents – and opening up interior design possibilities that would be out of budget for most people.
It’s important to remember that virtual marketing strategies don’t have to fully replace what you do as part of a sales campaign. They are simply additional tools to help you meet the needs of clients (buyers, tenants and vendors) in an ever-changing market.
What about for property managers?
As well as the potential time savings for sales agents showing properties to prospective buyers, there are significant other benefits from a property management perspective.
A Propic time and motion study of property managers in 2021 found that more than 20% of their time is taken up by routine inspections, final inspections and travel time. Using video and Artificial Intelligence (AI) tools (like Amazon Rekognition that uses machine learning to analyse and compare images), property managers can take video of a property before and after and use the AI functions to identify things like new marks on the wall.
Property managers are being asked to manage larger portfolios each year. Automating time consuming functions like routine inspections means they can increase their focus on value-adding tasks like building relationships with landlords and tenants.
It can be argued there’s even more of a benefit to virtual inspections for property managers than sales agents. Rental inspections are usually shorter than open homes for sale (typically 15-20 minutes rather than 45 minutes to an hour), with both tenants and property managers needing to race around to meet inspection times.
Virtual inspections mean that more potential tenants can view a property (especially when it’s important to consider COVID-safe measures and limit the number of people on-site) and streamline the process.
Are you excited by the rise of virtual tours? Or is it an inadequate substitute?
The real estate sector has traditionally lagged on technology adoption, but change is coming. Virtual home inspections mean you can open a property to new buyers and tap into new markets. Virtual rental property inspections means you can save time and money for landlords while having a digital record.
What thoughts do you have on how virtual tours can give home seekers a real feel for a home? What positive experiences have you had or heard about?