GMO Globalsign Holdings and e-Seikatsu, released the results of a joint survey on real estate consumer digital transformation needs on October 27th. 

GMO Globalsign is a digital document signing service similar, but not related, to Docusign.  

e-Seikatsu provides CRM and white label SaaS services to the real estate industry.

The online survey was conducted between October 8th and 18th of 2021.  Respondents were 500 men and women between the ages of 22 and 60 who are considering buying or renting a property.

When respondents were asked if they would like to utilise digital contracts, 28.8 percent said they would like digital contracts for both the rent and purchase of property, 27 percent said they would like to utilize for purchasing only and 26 percent said they would like to digitally sign for rental contracts only.

Put together, 81.8 percent of respondents want some kind digital contract signing ability offered to them. 

Traditionally, real estate in Japan is a very paper based industry so the results highlight a broadening gap between consumer needs versus what the industry can actually provide.

When asked if respondents wished to use a real estate company that enables clients to complete the entire process from viewing to contracting online, they favorably answered "yes" (16.6 percent) and "most likely yes" (46.0 percent), totalling 62.6 percent.

Turning to contract signings, 15.6 percent of respondents had heard of and experienced digital explanations of important matters (in Japanese, the 重要事項説明) for themselves.  30.6 percent said they heard of the practice but never had direct experience. 

Put together, this means 47.4 percent of respondents having awareness that contracts could be signed online.

The explanation of important matters is a legally required step renters and buyers must sit through prior to signing a real estate contract.  This explanation must be performed by a licensed realtor.

As a legally mandated part of the process, the realtor must present their photo based, government issued license so the buyer / renter can confirm the person who is executing the transaction is the same person sitting across the table from them.

This means that traditionally, everyone needs to be in the same room to sign contracts but as the survey results show, the industry must modernize to match consumer demands.

Regarding virtual tours, 19.2 percent of respondents heard and had relied on virtual tours when choosing their property.  47.4 percent of respondents heard about the practice but never relied on them when choosing a property. 

Focusing on those who had not relied on virtual tours, 72.2 percent of this segment said that until you visit the property yourself, there are some things that can’t be understood about the property.

For the respondents who did rely on virtual tours, they were asked what they liked about the practice.  71.9% of this segment said they liked being able to view property from the comfort of their own home.

The results were split between whether the respondents thought real estate documentation should go completely online or if, to some extent, it should remain paper based.

43.6 percent said data only was better compared to 31.8 percent favoring paper based transactions.

Is the real estate industry ready to meet this increasing demand for digital contracts?  Japan has a lot of catching up to do. 

Most agents are not fluent with collaborative drive sharing technologies like Dropbox, Google Drive or Office 365, let alone being able to adopt digital signature practices to meet increasing consumer demand.

For contrast, the National Association of Realtors’ “Real Estate in a Digital Age” published in September of 2021 reported that 86 percent of residential firms use or encourage their agents to use e-signature tools (page 19).

Additionally, 73 percent of American agents foresee utilizing e-signatures leading their technology use over the next 12 months, 20 percent higher than expected social media usage (page 31).

That said, while Japan does take a long time to decide things, when the need is clear, the speed of implementation can be breathtaking. 

So there is hope; if the Japanese consumer continues to discover the ease and safety of digital signatures for real estate, then transactions can one day match the smoothness enjoyed by their American peers.

Further Reading

GMO Globalsign Press Release (Japanese only; October, 2021)

NAR “Real Estate in a Digital Age” Report (September, 2021)