The Internet has had a profound effect on the real estate business. It has steadily eroded the human factor which, in earlier years, was almost total throughout the search-to-purchase process
With the advancement of the Internet and e-commerce, the ‘human touch’ and ‘face-to-face’ interactions are on the decline. Hand-written letters and postcards have gone the way of the dinosaurs, and even e-mails are rapidly becoming passé as the world shrinks into smartphones and messaging apps replace almost all other modes of communication.
The way we shop has definitely undergone a massive sea-change over the past few years. Less than five years ago, ordering food, groceries, clothes, furniture and a whole lot of other commodities and services with the click of a button would have seemed like far-fetched science fiction, but it is a reality today. And it’s not only in shopping where the human touch faces obsoletion, but almost all forms business.
The Internet was not the only factor involved in the ‘dehumanizing’ process. As an asset class, real estate had become increasingly commoditized and home purchase became more of an investment play done purely for financial gains. Thankfully, the slowdown in the Indian property market put paid to the extremely damaging speculative activity that drove up prices and created a staggering burden of unoccupied homes held solely for capital appreciation.
Still, it cannot be denied that the Internet has had a profound effect on the real estate business. It has steadily eroded the human factor which, in earlier years, was almost total throughout the search-to-purchase process. Considering the specific characteristics and quantum of investments in real estate transactions, digitization of all ‘stages’ of this business seems far-fetched. However, a closer examination of these stages reveals that the human touch is diminishing – probably for good.
As the visual shows, human involvement in the search and discovery phase is almost negligible today. Home buyers can scout for projects on various property portals, and these searches are ‘location agnostic’ as they can happen from a desktop/laptop, mobile web or an app. In the search and discovery phases, there is almost no need for human interactions for home buyers who are digitally savvy and equipped.
There are several portals that help in comparing identified projects on various parameters such as budget, size, accessibility, and availability of social infrastructure. However, the ‘compare’ stage has not totally shed the need for human involvement, as a home buyer’s social network still plays a major role in India. Prospective property options are still discussed with his friends, family, and colleagues – although online forums definitely also play a part.
The last two stages of a home buying process – finalizing the property and closing the transaction – continue to be heavily dependent on human involvement. After property comparison and shortlisting, the home buyer typically interacts with a real estate consultant and/or developer to get vital ‘last mile’ information on the property to validate the final purchase decision. This is the first point where a home buyer shifts completely out of the e-world and into human interaction mode. Of course, if any doubt exists, the prospective buyer will go back to the previous stages.
Considering that the quantum of investment is considerable and that real estate purchases are emotional decisions for end-users, interaction with a knowledgeable real estate consultant is more or less indispensable. The final purchase decision cannot and is therefore usually not based solely on the inputs of a developer, whose personal bias towards his own project does not provide a reasonable comfort level to the buyer.
The last stage wherein the home buyer closes the transaction is obviously heavily dependent on human interaction, as it involves a lot of paperwork and in-person appointments with the registrar. With the beefing up of the regulatory environment surrounding property purchases, real estate transactions have become increasingly complex and a significant amount of hand-holding is required throughout the final transaction process.
In short, while the e-commerce and the virtual world have doubtlessly reduced the involvement of real people in a large part of our transactional existence, the most critical stages of the real estate business will continue to be people dependent. In other words, the human touch in the lifetime purchase which lies closest to the hearts of most Indians cannot become obsolete. Real estate remains ‘real’ and will not be entirely reduced to ‘virtual’, now or in the future.