Guest column

Houston expert: How COVID-19 fast-tracked real estate technology

For better or for worse, COVID-19 has increased the need for technology in real estate. Getty Images

COVID-19 has impacted every facet of our lives, and the housing market is no exception. The majority of real estate, for better or worse, relies on in-person interactions.

Things like wet signatures, home tours, inspections, and appraisals all require physical attendance — making it difficult to create digital alternatives.

Although many of these disruptions are a hindrance this unique time also presents an opportunity for the real estate industry to showcase its ability to grow and adapt to the digital age.

Technology's grand entrance into real estate

As a people-first business, real estate has always been based on relationships and face to face interactions which make transactions amid a pandemic excruciatingly difficult. Although technology and real estate are not completely foreign with companies such as Zillow and OpenDoor having established their niche, many of the more traditional real estate companies had yet to fully embrace the reality of technology's arrival. The thought was a real estate transaction must be sealed with a handshake, a wet signature, and a bottle of champagne.

Upon the onset of COVID-19, many quickly realized that technology was no longer an option but in order to endure this crisis adoption of disruptive innovations was a necessity. Moreover, with millennial homebuyers being the most active clientele the industry needed to meet them where they are — online.

Although there is nothing like the personal touch of a guided tour, home showings had to adjust to adapt to COVID-19 by embracing and utilizing 21st century technology. This was achieved through videos, high quality images, and innovative staging posted online for potential buyers to take 360-degree tours. Rather than sacrificing nuances such as a well-staged home, which has shown to have the potential to increase a home's sale price by up to 6 percent, real estate agents crafted innovative ways to digitally put a home's possibilities on display for buyers to see.

Another impediment created by COVID-19 was the way people close. Many documents require wet signatures. Fortunately, remote closing technology has improved over the last decade and COVID-19 increased the adoption rate of these platforms by individual states and lending institutions at a much quicker rate than would have been otherwise.

Some examples of these useful tools are remote online notarizations (RONS), mobile closings, and electronic signatures. While these tools are extremely helpful there is still much in the way of mass adoption before the industry can be as nimble and adaptive to not experience large stalls in the face of this sort of unprecedented pandemic. In time, as we dive deeper into the digital age, it would seem that these options would become more widely accepted throughout the industry.

The dangers of tech and real estate

As new digital adaptations increase, so do the risks. Although the introduction of new technology has enabled the industry to continue operating, it also increases the already prevalent risk of cyber security threats.

Phishing attempts and cyber-attacks are on the rise. Hackers are trying to capitalize on increased exposure from employees connecting on home devices. Simply educating employees and clients of the dangers associated is the first line of defense. Internally and throughout the industry, we have seen companies who are committed to ensuring each transaction is done safely and securely through VPNs, and other programs that guarantee the protected transfer of funds.

As a company, we have made cyber security a top priority by requiring multi-factor authentications, third party wire verification services through a company named CertifID and implementing consistent training on how to spot malicious phishing attempts.

What's next for the Houston housing market?

Consumer confidence is key to the success of the housing market. As Houston's economy begins to reopen, we have seen a substantial increase in transactions being finalized and consummated through closings. Both refinances and purchase transactions are on the uptick at the moment and that is encouraging. However, as new waves of the virus roll in there is always the chance that business slows, and the idea of buying a house fades.

As we wait for consumer behaviors to stabilize to the new normal, savvy buyers and borrowers have the opportunity to capitalize on a unique opportunity by taking advantage of low mortgage rates for increased buying power or to lower payments on existing mortgages. Transactions beget transactions and the more movement there is the better for the industry.

Lastly, as with all disruption comes opportunity and opportunity abounds because of COVID-19. With so many companies being forced to adopt new ways of operating due to the pandemic the real estate industry has a chance to adopt a more advanced foundation based on available technology which will help insulate it from future disruptions. With some innovation, a simpler, more efficient overall experience can be created for customers.

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Eric Fontanot is president of Patten Title a full-service closing company with locations in Houston, Austin, and Dallas. Patten Title's technology-enabled team of title and escrow professionals continue to provide real title solutions for customers in Texas.

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Building Houston

 
 

During a crisis, it's easy for startup leaders to panic and make things worse. Here, we'll discuss how staying grounded will get you through a crisis. Miguel Tovar/University of Houston

The great pandemic of 2020 has brought to the surface the issue of crisis management. Especially with nationwide business shut downs in the last eight months, many companies are on a rocky road of uncertainty. Entrepreneurs are unsure of what the future holds after seeing revenues slow or halt in some cases. Layoffs, RIFs, budget cuts, departmental downsizing; all inevitable.

Way too many startup founders aren't equipped or experienced when it comes to crisis management. "In order to keep your startup going, you have to know how to identify a crisis before it spreads like a cancer and how to make big changes and big decisions fast and often," says Gael O'Brien, the ethics coach for Entrepreneur.com.

"Any time in which the world stops functioning in a way we're used to, a deviation from the norm, that might be the biggest early sign of a crisis about to rear its head," she continued.

Admitting you have a problem

O'Brien stresses that a leader should create an easy process whereby one can identify a crisis in its infancy. The key here, she says, is to make sure to recognize a crisis before it starts to consume your company. You'll have to learn how to contain the crisis by leading the charge in rapid decision making. Many entrepreneurs simply refuse to admit there's a problem at hand. Many times, admitting there's a crisis means admitting one was wrong. It also means they may have been wrong for years.

These entrepreneurs that refuse admitting there's a crisis often do so with common refrains like "I didn't want to scare anyone" or "if I admit I was wrong this whole time I'll lose respect."

"Great leaders aren't afraid to put their company first, even if it means a blow to the ego. These leaders are not afraid to inform everyone that might be affected know there is a crisis," O'Brien explained.

"They contain the problem and prevent it from becoming unmanageable. Good leaders don't opt for a temporary Band-Aid-like fix either. They aim for a permanent solution."

Casting for a crisis management team

There are two common mistakes startup leaders make when it comes to crisis management. The first is that they can miscast a crisis management team. Meaning, they put the wrong people in decision-making roles. You want people on your crisis management team who are not going to feel they will be blamed for a crisis or for controversial decisions.

When one is afraid of being blamed for something, they are more likely to obstruct and lie so that the team's focus is diverted. "These are people that will omit objective and relevant information if it means saving their own reputation or job. You want people that put the team first," said O'Brien.

Communication during a crisis

The second common mistake startup leaders make during a crisis is that they tend to under-communicate. It becomes habitual to keep things close to the chest. To become secretive during a crisis. Managers might feel that the less people know, the less chance there is of panic. However, doing this opens your company up to wild speculation among employees. Assumptions. And these assumptions are never good.

"You have to be forthright. It's not just that people have a right to know what's going on in their own company. It's also that if you leave yourself up to speculation, people will grow frustrated and worse, scared. Scared people make crises worse," said O'Brien.

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This article originally appeared on the University of Houston's The Big Idea. Rene Cantu, the author of this piece, is the writer and editor at UH Division of Research.

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