Have you ever sat back and thought about the future? SingularityHUB posted an article recently with 8 Predictions for the Next 10 Years in which they made some pretty bold predictions about technology.
In the article the author predicts that there will be 100 billion connected devices with over a trillion (1,000,000,000,000) sensors gathering data. “We’re heading towards a world of perfect knowledge. With a trillion sensors gathering data everywhere (autonomous cars, satellite systems, drones, wearables, cameras), you’ll be able to know anything you want, anytime, anywhere, and query that data for answers and insights.”
All of this future talk got me thinking about the future of real estate in this insanely fast moving technological world.
One of the biggest problems in the real estate game, in my opinion, is the lack of information. In a residential real estate transaction, the seller is typically responsible for filling out a disclosure checklist to tell you everything they know is wrong with the property. Can you imagine how inaccurate many of those disclosures are? In a commercial real estate transaction, there isn’t any disclosure required. Essentially the buyer is entering into the purchase with only as much information as they can gather in their due diligence period.
Imagine with me for a minute how the idea of a trillion information gathering sensors will effect the real estate industry.
Every property has a physical address today. In the future, it is feasible to imagine every property having a digital address too. Why? Because all of these “smart” things we have will be collecting data all the time and they will be able to store information about the houses and their relationships to other things. The house will be able to answer many questions like:
- Who’s my owner?
- Is the house owner-occupied, tenant-occupied, or vacant?
- Who lives here?
- Who are my caretakers (landscaper, repairmen, pest control, housekeeper, etc.) and what is their reputation?
- What is the historical electricity usage?
- How is the HVAC system working or in need of repair?
- What is the repair history?
Having answers to these questions and many more, will fundamentally shift the way buyers feel toward buying a house or commercial property.
OFFER TO BUY
Now let’s imagine you have found the house you love and want to buy. All you would have to do is look into the chain of information the house has provided to really determine if this house is worth your time and investment.
Once you have determined that this is the house you want to buy, it’s time to make an offer. Are we going to need realtors to act as middlemen? There is a technology that is being developed called “Block Chain” that could potentially eliminate the need for intermediaries in many industries, but real estate is on the top of the list.
Just to imagine for a minute, let’s walk through the offer to buy this house. You’ve been pre-approved for a loan, but not by using your FICO score. Instead your bank has been able to use your financial block chain to demonstrate your financial health.
Now it’s time to submit your offer, but instead of writing out a lengthy and confusing paper contract, everything is completed digitally. You are able to submit your earnest money electronically and all of the information is instantly delivered to the other party. Inspections are a breeze because you are able to find reputable inspectors in the area through the data provided by all of the other properties in the block chain.
Once your purchase is complete, you are the proud owner of your dream home and the cycle continues with more and more information being gathered for the next person to use when purchasing from you.
What about the NEIGHBORHOOD?
Now that you’re settled into your new home, you want to participate in all of the neighborhood activities. Just as your house has a digital identity, your neighborhood has a digital identity too. You can begin to participate in your community by simply being part of it. Can we actually begin to develop more neighborly neighborhoods and develop trust in our community?
The lack of information and mistrust in the current real estate transaction causes some pretty severe emotional stress in such an important life event. Will the future be any better with more information? This depiction of a home buying experience is just the beginning. We didn’t even touch on how the future could potentially change for commercial real estate, but the premise should be the same.
Do you agree or disagree with any of these points? What other areas do you think could be affected by the changing technology of the future? I’d love to hear your thoughts in the comment section below.