Going Virtual: How VR is Demolishing Model Homes

VR is Changing the Classic Real Estate Sales Market, Here’s How:

In the past twenty years, the real estate sales approach has superficially undergone significant change. Online listings, digital profiles, even texting have all influenced how the real estate industry sells its homes, but this is all on the surface. The sales model itself, whether it’s condos in Vancouver or entire neighbourhoods in the outskirts of Toronto, has remained startlingly similar for over a century.

The basic sales approach goes like this: build an expensive model home, advertise the development, and wait for people to come to the model home for the sale. It’s a tactic that’s seen great success, but it’s also starting to affect developers’ bottom lines, and their ability to sell people new homes.

One of the reasons model homes are becoming more and more obsolete is because of the technology they’re linked to: the automobile. As the popularity of the personal vehicle grew, the chance to drive to a show home to “get a feel” for a development became more popular. The rise of the suburb was similarly linked to the car, and the show home approach perfectly suited that period in time. Digitizing supplementary material even gave it new life in the 21st century but, the core is relatively unchanged. And, just like the idea of a personal car, the show home approach is increasingly disparate from what the modern consumer considers interesting and pertinent.

There is, however, changes already underway in the way we sell homes, ones that digitize the model home itself and engage directly with the buying habits of the modern home buyer. It’s called virtual reality and in real estate it’s already revolutionizing the show home sales model in a number of key ways. Here are just a few:

1. Model Homes are Expensive and Time-Consuming

Most immediately, virtual reality (VR) model suites helps developers save time and money. Physical model homes vary wildly in price, but they’re all extremely convoluted endeavours. From filing the permits to pouring the foundation and setting up the utilities, an average model home takes months to build and hundreds of thousands of dollars in labour and material costs.

Comparatively, a fully interactive virtual reality experience, one that can be experienced online and in a much more cost effective sales centre, costs a fraction of the price. Development can take as little as six weeks. Plus, consumers are already interacting with potential homes in digital spaces, mostly in the forms of live-action videos, to inform their decision. Which brings us to the next point:

2. Virtual Reality Seamlessly Integrates with the New Way of Buying

According to comprehensive studies conducted at Google, 81% of consumers start their buying process with online research, 61% actively read online reviews and consider them part of the buying process. This includes small purchases, like a new TV, and large ones, like a house or condo. People aren’t using their cars to buy homes, they’re using the internet, and that means your internet presence and impression must be memorable, reliable, and able to reach these clients in more ways than asking them to get in a car and drive.

Research also shows that people have changed the devices on which they locate listings, with smartphone and tablet searches accounting for 59% of searches that aren’t during business hours. Such a shift in technology presents a unique opportunity for real estate developers to bring awareness about their projects online, where people narrow down which sales centers they will visit while house hunting. With VR model suites, you’re providing an experience designed for mobile platforms and a brand new way of engaging with those potential smartphone buyers. VR is an experience people want to have, and one that’s shown to change people’s behaviour.

As listings have become more and more accessible, VR offers developers the chance to differentiate themselves from the competition. VR provides that memorable engagement at the fraction of the cost of the traditional model home.

3. Model Homes are Great… for Local Investors

Today’s world is one that relies on the digital, not the mechanical, which means our listings and sales practices need to move beyond where we can physically travel. Compared to even a few decades ago, buyers are more likely to live in another city, another country, than within driving distance.

The sales model needs to adapt to these absentee buyers. Virtual reality tours and 3D modelling offers something simple videos and pictures of a development can’t: a first-person, realistically detailed replica that buyers can fully explore and interact with. This can be done anywhere in the world as well. Virtual reality equipment has never been cheaper, often only requiring a smartphone and a virtual reality headset that can cost as little as five bucks.

4. Millennials are Finally Looking to Buy, and They Buy Differently

While the millennial generation has been slow to get into the real estate game compared to previous generations for a number of reasons, but they’re now starting to buy. Just like everything else they do, millennials buy things differently than those who came before them. They’re leading the changes in the buying process, including the switch from desktops to smartphones and tablets.

Millennials are also cautious buyers. They spend more time researching their purchases than generations previous and are more likely to adopt other technologies to enhance that purchasing process. A VR model home engages with the new generation in technology they understand and love, and helps them gain research information that they value in their decision-making process.

5. VR is the Green Alternative

Another aspect of VR that millennials love is the green angle, which is good for developers’ bottom lines and wooing a new generation of buyers. The traditional show home uses a massive amount of materials to build, and plenty of energy to run, but often has two fates: demolition after the sales cycle, or sold off at an extremely low price point.

Model homes are increasingly becoming a wasteful expense. In fact, most townhouse and condo model homes are simply demolished after the sales period, which discourages today’s green-conscious buyer. By forgoing the model home in favour of VR and 3D modelling, your development can be a leaner, greener experience.

Virtual reality is not going away, it’s increasingly becoming part of the way people experience the world and make buying choices. It’s set to be the next major change in how the world works, just like the automobile and the smartphone. Not only can VR and 3D modelling save significant amounts of time, money, and resources, it actively engages with the new buying method used by more and more people every day. So rather than enhance the traditional sales model, why not create a wholly new experience? One that’s cheaper, more environmentally friendly, and works.