Real Estate Going Digital In The Boonies

For many years real estate has been done manually. Real estate agents would have catalogues. Catalogues would then be shared real estate agents. Real estate agents then would form an association. The associations would then have catalogues. Catalogues would be shared between associations, which would go from local level, to municipal level, to state level, to national level.

From paper catalogues to online listings

These catalogues would then be amalgamated into an online platform which connects all of the properties owed by realtors into one central database which would list all of the homes for sale by all of the realtors. This approach has created real estate giants such as realtor.ca, Zillow, and other online conglomerates which now provide access to a centralized listing database coming from tends to hundreds of MLS listing sites. The data can then be used to provide analysis of home trends in the industry, such as what is the expected resell value of a home.

The rise of for-sale-by-owner sites

As of 2016, this is the defacto technological advancement when it comes to online home sale and purchase technologies. However, there are new entrants into the online real estate technology sites but they are gaining small amount of market share. These are generally for sale by owner sites, or FSBO sites. The for sale by owner sites are generally community based and target smaller communities with the hope of taking over an area. However, the home sale process is not simple and generally cannot be done 100% electronically, so such companies are restricted to smaller geographical area.

For example, thunder bay houses for sale are listed on FSBO sites more often than their equivalent homes on the city of Toronto. The reason may be in the location.

People in the city of Toronto are generally busier than those that live in rural areas. They are more highly paid and educated and as such are more reluctant to undertake activities which require manual work, such as going to create a home sign, printing brochures, and taking photos on their homes.

People in the rural areas generally have more time and as such are more likely to undertake such activities. Of course, FSBO websites automate a lot these activities through variety of features such as integration to social media, digital brochures, and other similar activities.

Regulatory hurdles for digital real estate

Automation of real estate processes has been an ongoing process but generally speaking many states do not provide for the appropriate legislation to allow real estate transactions to take place electronically. Furthermore, state by state or province by province have different rules and regulations, further requiring real estate technologies to be specific to a region.

Within the region properties for sale usually tend to cluster around real estate agencies which operate in the area. Digital marketing takes a big role for an individual trying to sell his or her home but for the real estate agents the competition is for a zone.

In the meantime, real estate technologies continue to draw more and more investors, and regional populations grow, real estate technologies are expected to take a larger and larger role.

Summary

This article traces how real estate moved from shared paper catalogues to centralised online listing platforms such as Zillow, and how newer for-sale-by-owner (FSBO) sites have since gained a smaller foothold, particularly in smaller, rural communities. It notes rural sellers are more likely to use FSBO sites than busier, higher-earning city dwellers, and that inconsistent regional regulations still limit fully electronic real estate transactions.

Questions this article raises

• Why are FSBO sites more popular in rural areas than in big cities?
• What specific regulations are holding back fully electronic property transactions?
• How much market share have FSBO sites actually gained from traditional listings?