The Geographic Information system is a new technology whose invention heralded a new dawn for the real estate industry. (Wofford 8) says problem solving in the real estate industry is especially a big problem as it is often known to be complex, uncertain and dynamic. In the traditional way of doing things, solving problems in real estate often involved deductive reasoning and decision making. However, a company that has embraced the GIS system will not have to use these complex and tiring methods. Incorporating the GIS system in decision making steps and prediction simplifies the process to one achieved by a mere click of the button. Real estate analysts who access these GIS packages can perform complex spatial analysis and prepare maps in seconds thus making it extremely cost effective (Fryrear 4). Their colleagues, who have no clue on this technology, will take hours or days to do the same analyses. A good GIS system is one that can process geographic data from as many sources as possible (Robbins 56). A GIS which is up to date may come with extra packages which may include maps, graphical representations and allow zooming in all angles the map databases should also not be limited to the ones from public or government institutions. The use of global positioning system is another plus that allows maps to have coordinates.
Real estate companies in the U.S are continually using GIS technology in their prediction analysis. Trulia has developed a new technology that helps them determine the estimates of U.S homes in the short run (O’Connell 6). The technology is aimed at providing leading indicators on prices of homes as well as rent in the U.S. the technology also helps them determine the trends in rent prices for houses in the same areas or in similar localities. On the purchase of homes, the technology can predict the prices for a few months down the road for homes in a given city (Shankar 89). Some of the reasons that make the GIS system a catch in the industry are the reduction in price of the product since its invention in the mid nineties. Another factor is the fact that computer technology has improved. Computers now have fast processing speeds, bigger memory, and more computing power (Zeng 53). To process the large amounts of data in a GIS, power and speed are important. Computers have become easy to use thus not limiting use on account of user friendliness. The third factor is the rise in the number of engineers who are developing software for use in all kinds of business. Finally, there has been an increase in the availability of data, especially from private vendors who sell this data at low costs. Government and state agencies are also displaying more geographical data (Simons). Real estate industry is one industry whose full adoption of this technology.
The location of a certain property is always very important. Before the introduction of the geo based technology, it was impossible to do certain tasks. To date, players in the real estate industry who have ignored this technology operate in a manual world and lose a lot. Today’s GIS system are very much automated thus perform spatial processes automatically (Abukhater 2). The distance from a house to the nearest metropolitan area e.g. a city has often been used as guideline in understanding the effects of various attributes on the price of houses. Traditionally, the straight-line distance from the house to the metropolis has used as a proxy for transport costs. GISN can easily produce a variable that identifies all properties that border a certain property that meets a certain criteria. To do such identification would take days and cost a lot in terms of hiring labor. The other major technology under GIS is the predictive analysis. This is a technology meant to give an insight or foresee market trends, identify risks, and balance the location strategy. Predictive analysis may play an important part in determining the best investment for a player in the real estate market; this is done by identifying future potential areas. The technology here is statistical in nature and it involves getting information from different sources and using the information to foresee and predict future trends. If GIS were combined with all information to do with land, it would produce an array of information affecting the property, environmental state of the land, and the level of preference (Heppleston). If we were to know what happens in future, we then would be able to do something today. Some of the advantages such a model would give is the ability to preserve the environment. For example one can ensure the new building coming up is in a position to maximize use of renewable energy sources. Buildings should produce efficient energy. Ensure that the building has access to a transport system e.g. railway or good roads. Ensure that the house structure is one that helps in the preservation of water. The real estate expert would also evaluate waste disposal techniques so that the property future desirability is not destroyed by the dump sites. All these analysis are based on the demographic and census figures suited for the wishes of the client. Other than the risks from the environment, this technology helps investors mitigate the financial risks (Von 7). With a good insight, investors can tell which areas are showing hope, and which areas are bad for business.
The use of the GIS system in the real estate industry presents a clear break from the past and offers a path in to the future away form the traditional manual systems that often cause the buyer stress and uncertainty. Local-Insights has developed this phenomenal system which, if funded, will provide immense benefits as the future approaches. The fact that the method can codify expert knowledge mitigates the risk of lacking data in the industry. Thus, the method is not only convenient for the real estate brokers and home owners but most importantly, it provides an opportunity for buyers to get value for their money without unnecessary fatigue
John had just finished law school and landed a job as a lawyer in one of the corporate firms Washington DC. The company offered a good salary, with a car and a mortgage on top. The student loans were no longer bothering him and one day he decided it was time to buy a house. With a $200000 mortgage, he was sure to get a pretty decent house and preferred one in a quiet neighborhood. Given the huge number of hours that the lawyer was required to be in the office, he hired a real estate agent to help him with the search. After explain to him the details of his house, he paid a fee of $100 dollars with a promise of another $500 once they found a house. After three weeks, he had only got two options, both of which did not have what he was looking for, either being way beyond his loan or simply in the wrong neighborhood. It was then he decided to try online searches. In one of the websites, he signed in but another three weeks passed without any communication. It was while he was surfing for other options that he found out about the Geo based technology. After his call we immediately booked him for an appointment during which we explained to him how we do our thing. We logged his data and in less than two minutes, john had a choice of four houses that fit his choice. Soon, john had moved in to the house as one of the houses pleased him and was well below what he had averaged!
Adam Clay had just returned from china where he had worked as an executive in one of the firms. He had returned too the U.S.A with the aim of investing in the real estate industry. He wants to invest in the top metro market, the top ten foreclosures in the top market, as well as the local markets. He had approached a real estate agency recommended by his bank. Anxious about new prospects, he hurriedly booked an appointment. The agency informed him that they would need at least a week to send message to their agents in the field. Later, while reading the business paper, he came across a story of an investor who was lamenting about the lack of data on the prospects of different markets in the recall industry. The paper had also included an analyst’s opinion who had recommended the Geo based system. Clay called Local-Insights. At local insight all we had to do is log in the local are a he with the highest activity to attract real estate investors and in seconds, w had our information. Clay was not only able to identify the local area that had the best prospects in the next two years but we were also able to locate the top 10 market closures by a mere click of the button.
Home Brokers is a real estate agency in Colorado. The company has been experiencing difficulty as the cost of living has risen and paying agents has become expensive. The company decided to increase the commission to meet the operational costs. However, the company has been having difficulty getting new business. With the use of a Geo based search system has realized it will no longer need as many agents as it has had.
Truck-Movers have been growing in the last three years and needs to relocate to more expansive premises. The company has hired agents to look for a convenient property but the property they are getting is way above the rates in the market and they cannot afford. While the operations manager is surfing for alternatives he learns of Geo based Information that is used to help real estate users locate property that best suits their business. The company decides to contact Local-Insights. It takes the a few seconds and though the price is a little bit higher than the former agents, the company manages to relocate in one week.
Housing and Décor is an investment company that constructs houses for sale. The company would like to know the best places to buy property to develop luxury apartments. However, the only Geo based information they are getting does not provide a predictive model, it also limits its data to the one available in the public domain, and the data is not visualized. Local-Insights ahs developed a new product that provides all these details.
In the real estate industry, value and potential of property are mainly determined by the location. GIS would definitely aid in the making of such decisions. For home buyers, this system can help them determine where to buy property. When a home owner decides to buy a house or any other property several questions come in mind. Where do I buy? And what kind of a house do I want. In the former question the buyer is wondering about the location. The later question refers to the taste and preference that the customer has in mind. In terms of location, the determinant to this would be where the customer works, the income, and proximity to a metropolitan area. A god property that suits the buyer should be affordable, or in the range of current market prices. It should also have positive prospects of gaining capital. As discussed before, the location is another key determinant. It is basically the dominating factor. To determine a good location, one can use a geo based system. The real estate geo information system (REGIS) performs two key roles: it analyses the physical and social environment in the potential area and mapping it. In determining a prime location, there are several basic factors that should be considered. One is the environment. Is it a slope? How is the vegetation? How are the parks? Is there a river? Are there dumpsites that can cause pollution? These questions define the environment. The other determinant is the social environment. These include the availability of shops/malls, railway stations, institutions of learning, noise from industries, population, and price of homes. The other important factor is the personal factors. These include the client’s income and budget or the size of the housing loan, the place of work of the client, location of friends and family, the size of the client’s household e.g. staff and kids, and the client’s preference in population groups.
The GIS can be incorporated so that it has tools to analyze physical and social factors and to come up maps that point to the strategic areas. The system uses complex algorithms and fuzzy theories and once completed, they are changed systematically to become guidelines that can them be used in filtering out areas that meet the client’s expectation. Optimization is then carried out. In a nutshell, this system takes in to account the major factors: personal preference, physical environment, and social factors. This method when cross checked is in the range of up to 97% accuracy. If a buyer were to use the traditional way of doing things, searching for this property would take weeks and cost the client time and money, not to mention the stress that comes with such a process. It is also important to note that buyers are largely inexperienced in the world of real estate. Hence, they would have limited knowledge, or non at all in terms of determining the effect of physical environment on property value. This method, on top of being fast also helps the buyer to get expert knowledge and avoid potential mishaps. The method has another major advantage In that it can process both incomplete and non defined criterion. Such a criterion may include expert knowledge and obvious knowledge. Definitely, buyers who fail to use the method often will suffer from lack of data. The property price is a factor that should also be noted. Through a model known as the Automatic Valuation model which is incorporated in the Real Estate Geo Information System, one can tell if a property is worth the asking price. The Automatic Valuation model analyses, through mathematical and statistical methods, and then compares the values of property based on the similarity in the attributes of the property. These attributes may include the age of the house or the number of rooms.
This technology however, is not limited to buyers. Real estate investors who come to Local-Insights are assured of the best predictions in the next one to two years. By monitoring local area action, we are able to tell which markets are best to put investment. The same applies for real estate agents. We can put local area action on your website which will enable you to know areas where business is good and save you on operational costs. From our discussion you can learn that the Local-Insights presents the most accurate and real-time market information in the real estate industry. we have critically developed our technology and the software is definitely one of the best. With these tools we are able to do the best analysis in the market. Our technology has no limits to the country, state, or county as we will go down all the way to the block you desire.