One of the most popular memes to circulate through social media is the “expectations vs. reality” meme. Everybody’s had that crushing experience of being excited to get something, only to get a disappointingly poor substitute. Similarly, many homebuyers feel less than pleased after realizing that a certain property is different from what they imagined based on blueprints and description on fliers. As a real estate agent, you’d probably know the easiest fix for that is to arrange an open house or home viewing to let the client inspect the actual space. Unfortunately, that’s not always possible. Scheduling can be really difficult, and getting the client to visit the property itself can be challenging. If you’re struggling to arrange viewings for prospective property buyers, a virtual walk-through just might help you get a real edge in real estate sales.
Pro: Reduce Risks and Costs of Construction
The biggest challenge with the traditional walk-through is that it needs to happen in an actual physical space. That means the space has to be built first, and that can cost a lot of money. It’s not unusual for companies to burn through a million dollars just to create a model unit for a luxury space, which they do by buying china cups from Tiffany & Co. and blankets from Hermes. Clients may need to get a feel for when the home is fully furnished and finished, but it doesn’t help cut costs. Another issue is the fact that real estate agents don’t know what homebuyers will like. What color will appeal to buyers the most? What window designs would be most ideal? What type of cornice would give the room the right look? Similar concerns arise for when you’re trying to convince them that a fixer-upper has potential: people don’t get convinced until you show them a clear picture of what’s possible.
With VR, real estate agents can show their clients a model of a certain place even before it is built. Sage Realty Corp., a New York-based real estate company, works with a 3D graphics company to create models of commercial space that they can show to prospective tenants. Virtual staging elements can be done to show spaces with carpeting, furniture, and all the works. Commercial spaces can be laid out as restaurants or as offices, and A/B testing can be done to determine which layouts are most appealing to homebuyers. Jade Signature, a Florida-based company, is shipping Samsung S6 Edge Smartphones and Samsung Gear VR goggles to vetted prospective buyers, allowing them to see simulations of high-end development units, which would be sold for $14 million each.
Pro: Take Real Estate Property Sales beyond Borders
Global property investment is becoming more common. With improvements on travel technology, international communications, and the expansion of many commercial brands into emerging markets, more people are becoming interested in buying properties outside their home country. Consider the case of China. In recent years, luxury brands have decided to enter the Chinese market since it’s among the world’s largest economies. More affluent Chinese consumers have since developed a taste for those products, and guess what? Now they’re actually buying properties in Europe and the US. The challenge for real estate agents is to reach out to international clients and try to sell high-end properties. Similar challenges exist for companies who have to relocate their employees from one area or region to another, and therefore have to help them find suitable housing.
Virtual reality is a literal game-changer for property sales. When clients can tour a listing without even walking through the front door, it’s a big deal. International and other long-distance buyers won’t have to fly in just to view one property. Other experience-based elements can be incorporated through 3D video: a 360-degree shot of a development, complete with a soft breeze blowing through the outside landscape or sunshine streaming softly into the condo unit, will give prospective buyers a clear view of what everyday living in the unit can feel like. Simulating the experience will stimulate excitement, upping the chances that they’ll sign that lease or buy the property outright.
Pro: Save Time for Both Yourself and Your Client
One other problem arises when real estate agents want to show prospective buyers multiple locations. Sometimes they aren’t in the same neighborhood, and the trips they’d have to take to go from one place to another add up. This would be a major hassle for property buyers. It’s especially bad if you’re trying to do it during rush hour, and traffic jams are just everywhere. The worst case scenario is you get thrown completely off-schedule and have to postpone showings for another day. If a property the client actually wants is sold to another person who was able to view it first, it’s a lost opportunity. Current VR-based real estate technologies allow firms to take 360-degree scans of a property. This makes it possible to take scans of multiple properties for VR viewing, schedule a time for the client to visit the office, and just have them take virtual tours so they can choose the best one. Video tours are also possible via smartphones or tablets, but virtual tours are usually better because they give the viewer more control. Viewers can “move” around in the space and explore as they please, and they can ask questions about certain areas.
VR technology is also a potential time-saver in the context of restorations. Sometimes, people purchase a less-than-ideal property so that they can “flip” it—that is, they can restore it and sell it for a healthy profit. However, such restorations may not go smoothly; the owner may change their mind about one aspect of the project mid-restoration, forcing the project to be halted and potentially be set back for months. With VR modeling technology, it’s possible to visualize different ways a renovation project can turn out, so decisions about appearance and design can be finalized, reducing costly and time-consuming do-overs.
Con: High Costs Associated with Creating VR Models/Simulations
VR may make the real estate landscape better overall, but don’t go writing odes to glorify it just yet. Sure, the technology is expected to experience increased adoption among consumers (VR viewing tech is becoming more widespread, ranging in price from less than $50 to as high as $800), but that’s only one part of the process. Computers that can smoothly render the virtual spaces for viewers are limited in supply, and they can be quite expensive. Scanning a property to turn it into a virtual listing will take a sizeable chunk of change, too. Matterport, a VR technology company, manufactures 3D scanning cameras specifically for real estate applications, and each unit costs $4,500. For those real estate companies that can’t afford to buy a camera, they’ll have to pay to have properties converted into virtual listings, which can cost hundreds of dollars each. Virtual listings for more high-end locations, such as Manhattan apartments, can even reach $15,000 in total. VR simulation models can be really pricey too: a model of a one-bedroom NYC apartment can cost up to $799.
Those prices are of course still better than paying millions of dollars to build a physical space, but they’re still pretty steep, and selling real estate is quite risky. That’s why most firms that use VR technology are involved in selling high-end residential spaces or commercial spaces. The costs simply can’t be justified for general purposes–yet.
Con: Concerns about User Experience
One other concern with using VR technology is user experience. The expectation is that virtual reality will take users on a smooth, seamless journey to another space: they can see the vision behind certain property developments, or visualize moving through a space that they can’t get to. However, the reality is that not all users may be able to handle the experience of VR. Moving too fast through the virtual space can be disorienting and might cause some people to become nauseated. The feeling of disorientation from “moving” through a virtual space while actually standing or sitting still can be too much for sensitive clients. Clients who can’t get used to the VR interface quickly may end up just “bumping” into virtual walls the whole time. Plus, if the headsets are used and reused by different people, and they aren’t sanitized properly, users may end up catching contagious diseases like pinkeye. Of course, these are relatively minor issues when compared with the different ways virtual reality is changing real estate marketing, and they can be easily fixed.
VR technology is generally seen as a way to improve the entertainment experience. True, video games can be so much more awesome if you’re playing in a Tron-like environment, but the technology has so much more potential than that. It could be used to educate children about cultures from around the world (how much more awesome would documentaries be through VR headsets?), it could help aspiring medical students learn by giving them a first-person, full-perspective view of a major operation, and it could help in major financial decisions like whether one should buy a house. Still, there’s a wide gap between “could” and “will.” So while some may see the use of virtual listings and simulations as a virtual certainty, we may have to wait and see before VR’s potential is realized.