Leveraging the Tech You Own

In response to the pandemic we have seen the real estate industry wholeheartedly embracing technology for the first time. Typically in the past, property management and homebuilding systems lagged behind other industries, including hospitality, manufacturing, and transportation. The prevalent practice for Property Managers remained to have rent collected by a manager and then driven to the bank for deposit. Homebuilders felt their systems were useful only in the back office, such as the Accounting Department.

Now homebuilding field operations and property managers are seeking to automate routine processes to reduce physical contact with the outside world. Property managers and leasing agents are posting virtual property tours online and conducting Facetime tours by walking applicants through available apartments while they watch from their smartphone or computer.

As for the builders, their prospects are shopping for options online, selecting styles and colors, tasks that used to be performed during onsite meetings in the builder’s design center. One builder shared with us recently that five homes were sold last month without anyone meeting the prospects in person. All options and upgrades were selected online during a Zoom appointment, and all documents were signed via DocuSign with no face-to-face interaction.

Most of the leading property management software systems offer an app for residents to pay rent and managers to submit repair work orders. These applications are moving forward at a fast and furious pace to provide additional functionality. We are also experiencing similar demands in the homebuilding arena. One key factor driving the market is Millennials and their dependence on their handheld devices. Prospects and buyers want to completely transact their business using their smartphones – with the expectation of instantaneous response to their questions. Homebuilding software vendors are moving quickly to maintain their stronghold in this ever-changing world of real estate technology lest they suffer the consequence of being left behind with no one to blame but themselves.

As a consulting firm, Cornerstone was recently engaged to review a builder’s operations and make recommendations for improving productivity. We noted a great number of processes that could be easily automated with their current technology at no additional investment. For example, buyers were complaining that builder-buyer communication after the ratification of the sale contract was minimal and sporadic.

Image of unhappy homeowner

We suggested that the owner set up standard system notifications at construction milestones. These notifications would be automatically sent from the system when superintendents checked off boxes when the work had been completed. No human intervention was required; the system was 100% responsible for sending emails to the buyers. For this particular client, the superintendents were also required to attach photos of specific milestones for the back office to monitor the building progress. These photos were also easily attached to the notifications. Of course this resulted in increased communications throughout and well after the completed sale.

All of this functionality was bought and paid for many years ago, but no one had turned it on…and this is only one example. We strongly encourage builders and property managers to set aside some time to invest a little effort to understand the functionality of the applications they already own. Determining how to fully utilize and configure the applications you own will improve productivity, your bottom line, and your overall customer experience.

100 yr old homes become Passive

Baxt Ingui, a New York City architecture and interior design firm, achieved a few modest (wink) goals so far: The first certified passive house in a landmark district, the first certified passive house in Manhattan (also LEED Platinum), and the first Passive Plus house in the United States.

These projects, and several others shown on their website, highlight their commitment to retrofit existing houses to “use a fraction of the energy that a typical residence consumes, have better air quality, and [be] more comfortable to live in.”

Check out the entire gallery on their website: https://www.baxtingui.com/passive-house/

Systems Selections Booming

We are almost through Q2 for 2019 and we can tell you that there is a definite trend afoot in the real estate industry. In the last six months, we’ve seen a surge in “system selection” projects. These are not small ancillary system projects, these are ERP projects all across the industry – including land developers, home builders and property/asset management companies.

Why this sudden movement? If you’ve been around as long as the Cornerstone team, you can recall how Y2K forced so many of us to upgrade our back-office systems. For many companies, that was the last time they took a hard look at the future of their systems. Folks, that was 19 years ago. To be fair, some companies did make changes in the last ten years, but that window is also aging out.

None of us want to upgrade or change systems. Yet, technology is moving so fast that many of those aging systems are leaving us. For example, if you are on SAP you will soon need to move to their new platform SAP S4/HANA. That will mean almost a full re-implementation for you. If you find yourself in that situation, facing full implementation costs and changes, it is incumbent on you to do your due diligence and include a comparison of alternative solutions in your analysis.

Many other real estate products have been on minimal support and don’t seem to be upgrading; some products have only one or two sources left supporting them. If this is the case with your system, you really need to look forward. Yep, pull your head out of the sand. Or, if you feel you are already above the ground, look around you…are you painting the organization in a corner because you’re waiting to address what you already know is coming?

Some of the products that we see as the “senior” of the “senior citizens” include not only the old SAP, but JDE One World, FAST, Trueline, a version of Builder MT and more. These products have served us well, but if your organization is counting on them, you need to take a serious look at “how much longer?” Not only are you missing out on new technology, features, and tools, but eventually something is going to give. For example, if you are on a product utilizing the AS400 and the hardware goes down, you will need to upgrade to expensive new hardware just to be able to hold on until you can complete a new system selection and implementation.

Don’t drag your company down into defensive mode, go beyond offensive mode and move into pro-active mode. Ask yourself the hard questions and start prepping your management and co-workers for change. Get on the next budget cycle early and make a solid case for necessary expenditures. Assemble teams and include a wide range of departments to build requirements, foster buy in, and ensure your selection is the best one for your entire company. And feel free to give us a call for help; as Cornerstone has done many, many of these projects (= we have the templates!)

Protect Yourself: the latest real estate scams

Want to learn more about the latest scams relating to real estate and home sales? Here are some great resources to get you started:

Tricks used by Mobile housing board email scammers exposed

lagniappemobile.com

This Sneaky Home-Buying Scam Is on the Rise. Here’s How to Spot It

time.com

Business E-mail Compromise: The 12 Billion Dollar Scam

ic3.gov

$12.5 Billion Lost in BEC Attacks, FBI Reports

wombatsecurity.com

Calls From Across the Nation for Affordable Housing

“We need more cities to address the shortage of new homes being built at the entry level. That will take forward thinking at the city level to address the lack of new development at the affordable end.” 

Read More at OCRegister.com: 208 new entry-level condos, plus shops and restaurants, coming to Stanton

“As [Millenials age], we’re going to need more single-family homes and we’re not building (enough of) them right now”

Read More at YakimaHerald.com: Audience at Yakima homebuilders meeting hears concerns over affordable houses