Editor's note: This story originally appeared in the November edition of DSNews, out now.
Innovation and disruption are the core tenets of the technology industry. However, in 2020, the entire world was disrupted by a novel coronavirus, the fifth global tragedy of the past 102 years. The global pandemic was a stress test for the real estate industry, exposing cracks, and revealing opportunities for positive steps that will prepare us for the future.
According to a Deloitte report on real estate predictions, consumers' expectations about service are driven by technology firms' standards. The real estate industry has long talked about how Amazon's customer-first model has impacted how the real estate industry views the customer experience. But 2020 pushed us all to transform rapidly and move to offer contactless, responsive service from virtual home showings to the ability to sign closing documents remotely. As Deloitte notes, "personal contact is no longer the major relevant success factor in many processes."
States Title recently sponsored an independent third-party survey of the real estate industry conducted by Researchscape. It revealed 59% of real estate professionals say that digital readiness is the number one critical success factor for surviving in 2021. Technology will not eliminate personal contact, but, ready or not, the time has come to adopt and embrace technological change.
Technology Becomes Essential to Safety
As we grappled with shelter-in-place orders and the disruption of business, technology not only became a lifeline but also a lifesaver. From Zoom calls to document management, technology allowed the industry to continue doing business without the risks inherent in face-to-face interaction. The recent survey of the real estate industry conducted by Researchscape showed 36% of real estate stakeholders felt their personal safety had been compromised in order to conduct a real estate business transaction during the pandemic. We saw evidence of this concern when notary availability dropped to an all-time low while the volume of mortgage applications increased. Although notaries were declared essential workers, some opted out of in-person signings to protect themselves and their families from the risks of contracting the virus.
As we have returned to face-to-face interaction, safety remains a concern. Our survey showed that 79% of real estate professionals believe that wearing a mask is a necessity, and they will not do in-person business without one. Those concerns make sense considering 39% of respondents said someone in their company has tested positive for COVID-19, 22% have been exposed to someone who has COVID-19, and 9% have tested positive for COVID-19 themselves. Safety was also the number one concern of buyers and sellers, with 28% of buyers and 33% of sellers citing safety concerns due to in-person contact during the home buying process.
Digital Readiness Is Finally a Priority
In response to the pandemic, 49% of survey respondents have new digital service offerings, and 46% are preparing more contactless customer interactions. Forty-four percent have most of their total workforce working remotely, and 19% indicated all their workers are remote. Yet, 30% cited figuring out how to use technology not used previously as one of the biggest challenges to their productivity or business success while working from home. COVID-19 forced rapid readiness. But, as you are equipping your teams with technology, be thorough in the process.
During the pandemic, we heard anecdotes about buyers and sellers asking for contact-free notarizations during closing. While Remote Online Notarization (RON) was available, many consumers were never offered an alternative to in-person signings. A crucial part of digital readiness is ensuring that the entire organization understands the technology and is empowered to optimize its use and adoption by all stakeholders. It is also critical to choose technology partners that will offer training and support so that systems are not only successfully installed but truly utilized. In large enterprises with multiple locations or a distributed workforce, testing new technology or systems via a pilot period can be more efficient. Embarking on a phased rollout can smooth the transition and develop internal champions that can support change.
The Pandemic Stressed Systems and People
COVID-19 was not only a stress test for the industry but its people. The recent States Title sponsored survey revealed that 43% of respondents said that the pandemic has "somewhat" or "significantly" increased their stress levels. Thirty-three percent said that loneliness due to lack of interaction with coworkers had impacted business success and productivity during the pandemic. Further, 34% said their work relationships with other stakeholders had been strained during COVID-19 due to pandemic-related productivity issues, slowdowns, and process inefficiencies.
While digital readiness cannot eliminate all stress, it can reduce tensions from inefficient workflows or outdated processes which are unsustainable given our new normal. Organizations must not ignore the needs of their teams. The survey indicated that the industry has, in fact, taken positive steps in protecting the well-being of its people. Forty percent of respondents said that their company leadership has been more empathetic than ever before. Further, more companies are offering new remote learning opportunities (38%), telehealth benefits (21%), and pay raises (14%).
Human Connection Will Always Be King
To truly transform the real estate industry, we need to adopt technology with a fastidious focus on people. Contact-free service may be here to stay, but human connection and engagement remain essential. As 47% prepare to adjust and or rework processes to support longer work from home success, we cannot forget the importance of connection. We can and should provide customers with a more seamless experience, but the absence of reams of paper and in-person services does not mean that we cannot continue to offer a people-powered connection.
Technology enables deeper human expertise to service customers, and along with that comes better service and relationships. Free from rote tasks and redundancies, professionals can put their focus where it should be - on the people they serve.
Building Toward a Digital and Resilient Future
As our industry seeks to manage the chaos, the good news is that Americans are still buying homes, building homes, and refinancing mortgages. Real estate professionals see many causes for optimism about the industry's present and future. Twenty-one percent of survey respondents said COVID-19 had prompted their businesses to embrace long-overdue innovation. Twenty-three percent pointed to the positive environmental impact due to less paper and more digital processes.
As grueling as this year has been, 17% said their workforce is more resilient than ever before, and a whopping 79% said despite the pandemic, they are committed to continuing their job/career in real estate. COVID-19 stressed our industry like never before, but it also illuminated the abundant opportunities to improve how we deliver service. As we embrace innovation and technology, we will not only survive but lead the way to a bigger, brighter future. One day, the world may be discussing the "real estate effect" and seeking to model how we conduct business.