Property appraisals drive real estate transactions. Accurate assessments determine value, loan interest rates and tax rates. Inaccurate appraisals can harm affordability and equity. The evolution of digital technology in mortgage lending and appraisals has helped the industry streamline the appraisal process and eliminate errors.
Virtual reality (VR) and analytics driven by artificial intelligence (AI) help real estate professionals by efficiently studying properties, sale prices, locations and demand to automatically compute figures, providing end-users with objective, data-driven decisions to boost efficiency and deliver reliable mortgage services for lenders and clients. VR technology can save time and travel expenses by reducing the need for physical site visits. This also provides faster turnaround times.
Enhanced technology has mutually benefited buyers, sellers and real estate brokers. As the real estate market continues driving economies, modernized technology such as virtual reality, analytics and AI provides this lucrative industry with critical resources for sustainable revenue streams and optimization of operations.
Limiting bias
This technology can improve the efficiency and accuracy of property valuations by enabling appraisers to tour homes virtually, giving them a more immersive experience than traditional photos or videos, especially if the properties are located in remote areas. VR appraisals may also eliminate subjectivity and appraisal bias, which has often negatively affected property values in minority neighborhoods.
The Federal Housing Finance Agency (FHFA) believes virtual appraisals may limit potential racial or ethnic bias when evaluating a home. There are challenges to using VR for property appraisals, including the cost of the equipment and the hesitancy of some professionals to adopt the new technology.
There are also concerns about the accuracy of the VR experience, which can depend on the quality of 3D scans and the equipment used. Virtual appraisals also face different regulations in each state, which sets the guidelines for their use.
Virtual reality is not limited to property appraisals. It has revolutionized property staging for real estate agents. VR technology has significantly enhanced this crucial step in enticing buyers and expediting sales. Its popularity continues to grow, with Goldman Sachs predicting the real estate VR market to reach into the billions by 2025. VR’s ability to create immersive realistic experiences is critical to its success.
Immersive experiences
Realtors can leverage customized 3D virtual reality tech to allow prospective buyers to explore multiple properties in simulated environments. VR proved invaluable during the height of the global pandemic, which limited open houses. Without geographical boundaries, Realtors could now access new markets and elevate their listings, enabling prospective buyers to gain a genuine sense of property scales and spatial relationships for accurate insight without visiting the home.
The National Association of Realtors reported that 20% of buyers’ agents experienced increased sale prices by up to 5% compared to similar properties that were not staged. Leveraging VR enables endless design possibilities for prospective buyers, bringing creative visions to life and creating personalized experiences.
Realtor.com reports that industry professionals who stage properties up to 2,000 square feet can incur expenses of up to $2,400 monthly. VR staging can decrease staging expenses by up to 70% compared to traditional physical staging, offering a significant cost-saving benefit that can reassure industry professionals. Leveraging virtual reality for property appraisals and viewings has revolutionized the real estate industry by providing prospective sellers and buyers with more accurate valuations and immersive experiences. This transformative technology should unlock new revenue streams and expedite the completion of more accurate property appraisals. The future of real estate is looking strong, and utilizing today’s advanced tech resources ensures that the industry can facilitate sustainability, even during sharp market changes.
