Technology Empowers Buyers To Expect More

Written by Posted On Friday, 27 January 2023 00:00

Real estate is being digitally transformed. Buyer behavior, driven by the current online shopping boom and its technology, is changing the real estate market—finally!

“It’s no secret, real estate is one of the largest assets, if not the largest asset globally—finance being right there behind it,” said Moderator and ULI Icon Sponsor John Cecilian, CEO and Co-Founder of Cecilian Partners, as he introduced the Urban Land Institute (ULI) Fall 2021 Meeting Session “Proptech Catchup: How Data, Technology, and People Are Changing the Face of Production Homes and Community Development,” simultaneously held virtually and in Chicago during early October.

“This notion of Fintech [financial technology]...and this concept of Proptech [property technology] coming together is why it has so much allure, so much excitement, and so much growth.”

Technology provides home buyers with access to more knowledge and information than are available to them during the traditional “buyer beware” sales process.

“The bottom line is—and Covid has only accelerated this—our industry, the real estate industry, is not trusted,” said Alan Klassen, Chief Experience Officer of Brookfield Properties, speaking to ULI-member real estate executives and professionals. “Customers are demanding to be trusted first, before they’ll trust us. That’s a paradigm shift….Our research is saying that you need to be able to be transparent...Authenticity—this is the top driver behind driving the customer.

“It was cloak and dagger. Hide it, build it, and they will come—those days are gone...being transparent online, providing that kind of trust, being vulnerable is what customers are looking for….I can’t wait for the [heated] market to go back down…this market, right now, is hiding what the [home-buying] consumer is actually demanding.”

Laura Cole, Senior Vice President, LWR Communities, stated that, even though we are all shopping online now, in the community development sector, the consumer shift to widespread online shopping has been ignored.

“We put so much emphasis on the human experience,” said Cole explaining the mindset buyers encounter when they visit a traditional sales center. “As a sales manager, I am going to give you the information I know you need to know and craft the message around what I think you need to know and not a whole lot more. Transparency was completely missing in the process.”

Cole heads the residential arm of Florida-based Lakewood Ranch, overseeing a 16,000-lot residential portfolio under active development by 20 builders with +2,000 annual sales.

Cole stated that the shift in buying involves customers adopting technology to make better real estate decisions.

“As a community developer, I see it as an opportunity to ask ‘how will this person live in our community’,” said Cole. “Our data sees into people and what they like. We look into this from a business perspective.”

In the past, Cole explained that developers left as soon as the people moved in. Now, Lakewood is involved long term. At 27 years in, Cole feels they are not finished yet. She says the community is more like an economic development model, continually changing and evolving with new revenue streams emerging.

Panelists Cole and Klassen, with moderator Cecilian, peeled back the traditional sales process for selling production homes and lifestyle communities to reveal to ULI members the potential of a technology-nurtured buyer experience.

Referring to a recent McKinsey study, Cecilian demonstrated the dramatic shift in consumer online behavior during the pandemic with a significant statistic: “75% of online shoppers in 2020 literally engaged new brands for the first time. They did not step foot in a grocery store...they did not step foot to buy a new car. They bought, they experienced...75% of those surveyed said they want to have those brands be part of their life in 2021 and beyond.”

New home buyers can expect to engage with increasing numbers of real estate companies with forward-thinkers who embrace the new transparency and control that consumers should experience as they buy—but are not sold—new homes.

“We don’t want the skeptics of new home construction, production home building, and community development,” said Cecilian. “We don’t want there to be any more laggards. Our worry, our fear, based on the very real market trend of how consumers engage with brands today across industry has to make us rethink about how we engage, how we talk to, how we create a sense of ‘place’ for all those aspiring home buyers or future residents.”

Home buyers are usually given attention as ‘customers’ once the sales process reaches the contractual stage. Now, when prospective home buyers visit a real estate website they become customers and enter the customer experience. As buyers, you have the attention of the builder or developer much earlier in the process. What are you going to do with it?

“The whole sales experience is being disrupted,” said Klassen. “It’s becoming ‘a buying experience’….The customer is coming through with so much more information and so much more knowledge. It’s really, really imperative—customers that are knowledgeable do not want to be sold. They want to be helped, to be supported, to be understood. They want advocacy right from the very beginning. Our industry is archaic….That’s the big shift!”

When you go to a sales center or shop online for a new home, ask yourself, “Am I in the right place?”

• How is my trust affected if there is an abrupt difference in communication between meeting the company online and actually visiting its model homes?

• Am I being sold instead of having my questions answered specifically and transparently?

• How do I balance construction quality with the buying experience I prefer?

• Will I be distracted from the quality of my new home by the online buying experience and what is promised post-move-in? 

• Will I ignore a new home opportunity if I am forced to buy through a traditional sales process?

‘Buyer beware’ remains the buying directive no matter how much fun you are having or how special you feel during the buying experience!

Extra Resource to Broaden Your Real Estate Perspective:

Emerging Trends in Real Estate® 2022" is a trends and forecast publication, now in its 43rd edition, produced jointly by PwC and the Urban Land Institute (ULI) to provide “an outlook on real estate investment and development trends, real estate finance and capital markets, property sectors, metropolitan areas, and other real estate issues throughout the United States and Canada.”

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