What Virtual Reality Can Do For Real Estate
Miranda Crace5 MINUTE READ
May 31, 2021
According to a Goldman Sachs report, by 2025, the virtual reality (VR) market will be worth $80 billion. $2.6 billion of that worth will be located in the real estate sector, and 1.4 million realtors will be using the technology. Currently, VR is just beginning to make waves in the real estate world. Most homes worth more than $20 million are listed with VR tour options, but for mid-range homes, it’s just beginning to take off.
In this article, we’ll take you through the current trends in virtual reality real estate and point you toward the next steps to take if you want to take advantage of them – whether you’re a buyer, seller or real estate agent.
Property Showcases: The Most Promising Frontier In VR Real Estate
VR is enabling real estate agents to create 360-degree walkthroughs of their client’s properties. These videos can typically be watched without a VR headset, but the full immersion that a headset brings provides the best experience. Once adoption of this practice is widespread enough within a local housing market, home buyers will be able to come to their real estate agent’s office, put on a VR headset, and blast through multiple showings via VR. The time saved promises to be substantial, and the convenience of avoiding having to coordinate schedules is certainly a selling point.
With COVID-19 making showings more difficult, more sellers and real estate agents are investing in VR property showcases. VR property showcases can also have environmental benefits, as they’re likely to reduce the amount of driving that real estate agents and buyers need to do to assess potential homes.
How To Take Advantage Of This Trend
Since the trend of virtual reality property showcases will have different impacts for several different groups, we’ve broken down the path forward by role in the home buying process. Although you likely won’t find yourself in all of these roles at once, you may want to read through this section in its entirety to get a full picture of the trend’s impact on all involved parties.
Seller’s Agent: If you’re a seller’s agent, we suggest jumping on the trend of VR showcases as soon as possible. Doing so will differentiate you from your competitors and put you ahead of the curve. And you’ll be an old hand when your colleagues are just beginning to fumble their way toward VR capability.
You’re going to want access to a panoramic camera, but it’s also possible to create virtual tours using the Matterport iPhone app. You’ll have to familiarize yourself with the technology, regardless of the tool you choose, but we recommend using hardware tailor-made for professional-level 360 capture. You’ll need to make an important decision going forward: Do you want to provide interactive visits or guided visits? Guided visits take the viewer on a 3D journey through the property, but they don’t allow viewers to choose their own points of interest to interact with and explore, while interactive visits do. Guided visits typically take only 1–2 hours to create once you’re experienced with the technology, while interactive visits will likely take twice the time.
Buyer’s Agent: If you’re a buyer’s agent, you should have a VR headset ready in your office so that your clients can conduct VR tours. It’s wise, though, to keep abreast of your local market; 360 capture may not yet be popular enough for this to be worthwhile.
Seller: If you want to market your home with VR technology, the easiest path is to find a real estate agent who’s comfortable with VR and offers the service. You could also consider providing 360 capture yourself. It’ll likely cost you around $200 and several hours of your time to learn how to create the capture, but if you’re in a buyer’s market and looking to give yourself an edge on the competition, this investment could be well worth it.
Buyer: If you’re in the market for a new home and don’t have a VR headset yourself, you’ll need a real estate agent with access to a headset. You’ll also want to find an agent who knows how to find properties that offer VR tours. As this technology takes off, finding these resources will get easier and easier. (In some markets, VR may not yet be popular enough for this to be feasible.)
Other Uses Of VR In Real Estate
Although we find virtual reality showcases to be the most promising use of VR technology overall, for some demographics, VR could have great potential in other ways. Let’s outline a few more boutique uses and discuss their advantages and challenges.
Virtual staging is another promising avenue for VR. Some current forms of virtual staging simply use altered photographs, but VR offers the opportunity to create a 360 panorama that includes furniture not currently in the home. You should take note that full VR stagings can be expensive to create, and it may inspire anxiety in some buyers who may feel that what they’re seeing is deceptive. Many buyers will want to pair a virtual tour with an in-person showing, and it’s a risk to leave a home bare and rely on virtual staging to fill in.
Although familiarity with and trust in virtual stagings may rise in the future, we think that for now virtual reality property stagings work best for large commercial properties, where the staging can be customized to fit the client’s intended use for a space.
For Airbnb property owners, VR is a big potential time saver. If you run an Airbnb property, just imagine cutting out the need for in-person tours by filming a VR tour of the property. Your virtual tour could include explanations of how to use any tricky features in your space, such as an unusual shower mechanism.
Just note that depending on your circumstances, the overhead involved in purchasing and learning how to use this technology could render going virtual less than practical. But, as VR technology becomes less expensive and more widespread, that could change – so you might want to keep an eye on industry trends and consider the upgrade down the line.
Commercial Real Estate
Many of the same advantages of VR home showcases we’ve discussed are present for commercial real estate. However, this market is actually a little ahead of the residential real estate market in its adoption of this technology. Major commercial real estate companies such as Cushman & Wakefield and Colliers International have already embraced VR to market high rise office buildings to potential tenants across the globe. If you’re interested in buying or selling commercial real estate, make sure to see what your local market is doing with VR.
Visualize New Constructions
VR tours of homes that haven’t been constructed yet do wonders for buyers. They can see the home in a way they couldn’t otherwise. If you’re struggling to decide whether to buy or build a new construction home, be sure to look into whether a VR rendering is at all possible. Seeing what you could have could allow a new build to compete with an existing property. If you’re selling a new construction, don’t miss out on VR visualizations – you could be leaving money on the table.
The Bottom Line: Virtual Reality Is Poised To Transform The Real Estate Industry
Looking ahead to the future is often the best way to differentiate yourself from competitors. If you’re a real estate agent or a seller, we highly recommend getting on top of VR trends. If you’re looking to buy, seeing what’s available virtually could save you time and effort – and help you find an agent who’s ahead of the curve. Of course, not all markets are ready for VR right now, so you should keep this in mind along your journey. Why not talk to a Rocket Homes® Verified Partner Agent today to find out what your local market looks like?
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