There has been much ado about how real estate is an industry ripe for disruption, and a lot of speculation as to exactly how it will occur. Yet companies across the country already have boots on the ground, clearing a path for disruption to follow. It's no surprise that in 2016, 235 real estate tech companies received VC funding, compared to just 72 in 2012.
Three tech developers out of the Midwest have realized the opportunities in a data-driven industry like real estate, yet sought to solve three different problems. Along the way, each have overcome obstacles of an industry slow to change, much less adopt new technologies.
1. Breaking down property data.
Property data, the backbone of the real estate industry, has steadfastly remained resistant to disruption. This is largely due to the fact that each piece of data is stashed away under lock and key across 700 regional databases. These databases are known as multiple listing services. An MLS aggregates all property data for a particular area for real estate agents. Tech developers have been hungry for access to this data to populate their platforms, much like how travel sites Kayak and Orbitz populate from airline and hotel websites.
Currently, if a developer wants to sell software that uses MLS data, she must acquire a license and download the data to a locally hosted database. Do this 700 times and it's easy to understand why the process would not only be a major headache, but also a hindrance to developers hoping to enter the real estate tech space.
Realtors Property Resource, a parcel centric database covering more than 160 million residential and commercial U.S properties, is the champion of a new tool intended to break down the barriers between MLSs and tech developers. RPR's Advanced MultiList Platform™ (AMP™) reimagines the architecture of the modern MLS by providing technology that opens the databases to access for both input and retrieval of property data. The platform expands the type, quantity, and quality of tools and applications that can be offered by both large and small MLSs to their subscribers.
"If you are an independent developer, your opportunities [with AMP] are unprecedented," said Bob Bemis, VP of business development for RPR. "Hundreds of possible markets will soon be open to you and your team, which where previously totally inaccessible."
2. Appealing to Millennials.
The emergence of Millennials as homebuyers and renters have had real estate execs scratching their heads for years. In 2013, Realync founder Matt Weirich noticed a key problem in the real estate industry: lack of convenience.
"As Millennial and Gen Z consumers become the majority of renters in the multifamily industry, we have seen property managers recognize the need to change how leasing teams interact with prospective tenants," said Weirich.
Realync enables live virtual tours and open-houses as well as pre-recorded video to allow for the convenience that Millennials crave. The cloud-based, mobile platform is a departure from real estate's traditional reliance on listing photos and in-person showings. Realync's technology allows agents to prioritize the convenience of their clients and break down the geographical barriers that were once an obstacle to the buying process.
"Real estate technology is an exciting and hot space to be in," said Weirich. "The industry is finally starting to adopt new technology to make every inch of the process easier and more efficient for everyone involved."
3. Moving data from paper to the cloud.
Because real estate has dragged its feet to adopt new technology, it's no surprise that many processes are still weighed down by paper. No one knows this better than Keith Kleinmaier, CEO of CRE software company Tenant Tracker. Kleinmaier has seen commercial real estate in its many forms, spending a large portion of his career as an investor, broker, developer and property manager. He determined through his experience that reducing critical dates and timelines to spreadsheets was eating away at commercial real estate executive's productivity.
"As a CRE broker and local developer, I can attest that our industry has been historically slow to adopt technology," said Kleinmaier. "However, over the last three years, more tech startups have emerged to solve something in the process that is broken or inefficient."
Tenant Tracker takes these processes to the cloud - and then some. The software allows for reporting and automation that is otherwise impossible. Using the software, team members are able to track all of the critical dates, timelines, contacts and process from Letter of Intent to a tenant opening for business.
Disrupting an industry is not without its challenges. "Externally, we are working with clients as they are forced to change their habits from paper or spreadsheets to cloud based software." said Kleinmaier. "Internally, we battle the desire to 'do more' with our software and try to provide solutions to every problem. To scale, we have to stay laser-focused on our clients' main pain point."