Known as ‘PropTech’ for short, these innovations in property technology are helping improve the speed and efficiency of the real estate industry, says Duensing, principal of Duensing Law.
“The scope of PropTech innovation into the real estate process is boundless,” he writes in the online legal publication. “Leveraging tools such as big data, connectivity and mobility, can feed into the client’s desire for efficiency, speed, personalization, independence, control and transparency.”
Duensing says there are many examples of innovation in real estate technology, including the use of:
- online algorithms for automated home valuations versus hiring an appraiser
- virtual reality technology for house tours and walkthroughs
- communication bots to more quickly answer client questions about properties
- “push” applications to provide notifications regarding available homes nearby
- social media to push personalized advertising
- predictive data analytics to more accurately personalize the search process for buyers
- remote smart lockboxes to help control who enters homes for viewings
- technology to simplify and enhance the purchase and sale process, including to allow sellers and buyers to track the negotiation process in real time
- blockchain technology to transfer assets
- crowdfunding to purchase real estate
- and creating more effective search engines to generate better results for clients looking for things like wheelchair-accessible or green housing or zoning information
Duensing writes that the rental industry “has already thrown open the doors of innovation with the introduction of [short-term rentals]. Innovations abound for the construction, real estate management, flexible workspaces and commercial real estate markets …”
“Interestingly,” he says, “the government of Ontario opened up the potential for innovation in 2015 by removing the restriction against the use of electronic signatures for documents that ‘create or transfer interests in land and require registration to be effective against third parties’ (i.e. an agreement of purchase and sale) in its Electronic Commerce Act, 2000.
“Technologies guaranteeing a reliable, encrypted digital signature … are now available to innovative realtors to streamline the process of purchasing a home. Online technologies for the issuance of transactional documents, such as condominium status certificates, are now prevalent.”
Duensing says PropTech or REtech (real estate technology) is “poised to become the next big thing” and investment in the area has exploded. He says, according to one industry report, $12.6 billion was invested in 2017 by venture capitalists.
“As abundant as these opportunities are,” writes Duensing, “the legal implications are rarely considered at the point of innovation. Many potential PropTech innovations have issues concerning security, marketing, advertising and privacy that should be investigated as they evolve and might lead to increased regulation.
“There is also the question of whether the booming PropTech market will be able to weather the slowing Canadian real estate market. Smart innovation might, in fact, save it,” he says.