Unfortunately, the real estate industry is home to a few bad-faith or outright deceptive actors – no one can refute that. As long as humans have traded property, dishonest people have been keen to capitalize on inexperience, incapacity or disenfranchisement.
The good news is that things are improving, thanks largely to technological advancement. Innovations in matchmaking algorithms, Artificial intelligence and immersive technology are helping keep the industry honest by facilitating transparency. And although there’s still a way to go, modern consumers have never been safer or more in charge.
Let’s take a closer look.
Competitive Online Marketplaces and Consumer Empowerment
People tend to consider fraud the preeminent source of dishonesty in the real estate industry. But realtor dishonesty (including misrepresentation, puffing, review-hiding, sales history opacity, etc.) is probably more rampant. According to tech innovator Regan McGee, “Antitrust laws have been applied against organized real estate 11 times and have been successful every time.”
McGee’s company aims to stop all of that. Nobul, McGee’s open real estate marketplace, offers consumers a transparent overview of their realtor options. The platform’s proprietary algorithm recommends relevant agents (based on consumer-offered criteria), but it’s ultimately the consumer in charge. The open marketplace spurs competition, which, in turn, drives agents to be more honest and consumer-centric.
As McGee told BNN Bloomberg, “With our competitive marketplace, agents that want to charge 5% can – if they justify their 5% through their reviews and their service proposition. If they’re doing something that’s more like a 3% job, then that will come out as well. It’s really about consumer choice.”
Artificial Intelligence and Fraud Detection
While McGee asserts that “AI-driven fraud detection technology is still in its infancy,” he admits it’s a promising concept. And recently, the concept got a significant bump as top multinational companies (like IBM, Deloitte and PwC) announced they would leverage AI against lease and title fraud.
Fraud is still an unfortunate blemish on the industry. While it’s typically not as rampant now as in past decades, very recent reports indicate that title fraud is on the rise again. Capitalizing on AI’s ability to accurately detect patterns may significantly reduce – or altogether eliminate – fraud in the coming decades.
Immersive Technology and Safer Remote Sales
Remote buying used to be a high-stakes gamble, leaving consumers open to all sorts of dishonesty. An agent might misrepresent a sight-unseen property to a client. Or a seller might fail to disclose information. And there was little a remote buyer could do to ensure they were receiving transparent information.
Immersive technology is certainly helping mitigate the issue. With the skyrocketing popularity of 360-degree photography, drone footage and virtual reality house tours (attributable to a spike in sight-unseen sales during the pandemic), a prospective remote buyer can enjoy functionally the same viewing experience as an in-person home hunter. Most brokerages now offer at least one of these immersive experiences, a further sign that the industry is moving in a consumer-centric direction.
Thanks to innovative tech mavericks, big companies embracing new ideas and brokerages accommodating new kinds of buyers, the real estate industry looks a little more honest in 2023. It still has its issues, but technological advancements have made significant inroads in the once tech-phobic industry.