Virtual reality is becoming an important marketing tool in more and more industries. In real estate, it is the up and coming product for advertising homes and showing properties. Homeowners looking for new avenues to advertise their properties can turn to virtual reality to reach buyers in far away places. Virtual reality also calls attention to high end properties. This new technology is an excellent way for a homeowner to make their property stand out from the competition.
But is virtual reality a realistic advertising tool today? Real estate professionals who want to utilize VR must give consideration to the many limitations that come from using any new technology. Namely, many people do not have virtual reality technology in their home. Producing virtual reality tours is not free, and real estate professionals will need to determine how they will get a return on investment when adding virtual reality to their offerings.
Infrastructure is needed to make virtual reality a more useful tool in real estate. Here's what the industry needs to consider when thinking of implementing virtual reality in their practices.
How Is the Data Stored?
Virtual reality tours are much bigger files than photographs. Real estate professionals who plan to post virtual reality tours online must ensure that the places where the listing will be housed can support such a large file. Different real estate listings will have different limitations. As time goes by and technology (also investment in technology on the industry's part) improves, this may be more accessible - but agents should not assume their current infrastructure can handle this on a scalable level.
Knowing in advance how much space is allowed for each listing on each online service is important. This will help the seller and real estate professional decide whether it is worthwhile to make a virtual reality tour.
Who Owns the Head Set?
Studies show that many people in the United States do not have virtual reality headsets. As of June 2017, only 5% of households had a headset. Others planned to buy headsets, but the percentage of people who own VR headsets is likely still small.
If the buyers don't own headsets but want to view the VR tours, the real estate agent should have a plan for ensuring that the tour can be viewed somewhere. This could require an investment from the real estate agent/brokerage, who may need to buy a headset to keep in their office. One option - for high cost transactions with buyers from afar that cannot view the property in person - might be to ship the headset to the buyer for a set amount of time so that they can inspect the property "in person". This would not function to replace a professional inspection that may identify issues a tour may not highlight, of course, but it would provide an avenue for certain agents/brokerages to rent out a handful of headsets in certain valuable instances.
Who Will Pay For It?
Virtual reality tours cost money. A typical service may charge approximately $350 to create the tour. This varies by company and by location. Some areas may have a higher cost than others, depending on the remoteness of the home and the presence of competition for virtual reality tour businesses. In an area where there are not many companies that provide this kind of service, the costs may be higher.
Someone must pay these fees, and it's up to the real estate professional to decide who. Real estate agents who think the cost is worthwhile may decide to include the virtual reality tour in their package. This may only be worthwhile for high-end homes. In other cases, the homeowner will have to pay for the service themselves, if they think the price is worth it.
What is the ROI?
The final question to consider is whether virtual reality tours have a return on investment. It's hard to gauge what the ROI of a VR tour is, because the technology is so new. That said, there are some statistics that suggest that virtual reality tours are worthwhile.
Real estate listings with a virtual tour get 87% more views than listings that do not. In addition, virtual tours can keep viewers looking at a listing for up to 10 times longer. Being able to "stand" in the listing may increase these numbers even more. This could easily translate to a faster sale, more competition for a property and bigger offers on a home.
Sellers who want to make their home as competitive as possible should look at all the tools in their arsenal and decide which ones are right for them.
How to Proceed
There is a place in real estate for virtual reality. VR technologies make it possible to view homes from long distances. VR tours can also attract attention to a real estate listing, thus making one listing stand out over neighbors and comparable properties in the area. In the future, homeowners who want to use VR will go to real estate professionals who have experience with the technology.
Real estate professionals who want to remain competitive should be open to using VR. Before suggesting VR technology to sellers or buyers, real estate professionals must:
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Have a plan. Know what will be involved and how to solve problems relating to the newness of the technology.
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Know the limitations. Understand that not all clients will be able to use virtual reality, and that not all buyers will be able to see VR tours.
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Be up front with the client. Virtual reality is not the silver bullet, and clients must have other marketing plans in place to ensure their house is sold.
If you're a real estate professional, study up on virtual reality to stay competitive. Virtual reality has its limitations right now, but as the technology advances, it will likely become more accessible and popular.
Author: Chip Glennon
Owner, Chip Glennon Real Estate Experts
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