Artificial intelligence (AI) is the buzz these days, impacting many industries in a transformative way. The real estate industry is no exception. There’s most certainly a lot for us to unpack pertaining to all the possible applications of this new and rapidly evolving technology.
While AI is taking the world by storm, it is unlikely to replace real estate agents completely. Instead, AI seems poised to become an incredible tool that agents can, and likely should, use to enhance their services and provide even more value to their clients.
Here are some ways AI can be used as a tool
Real estate agents can use AI for its predictive analytics. AI algorithms analyze large amounts of data to identify trends and patterns to help agents make more informed decisions about many important topics, including pricing, marketing, and property valuations.
It can help agents provide more accurate and timely advice to their clients and clearly outline numerous potential scenarios (short of predicting the future) so that agents can more effectively foreshadow and guide clients through many things to expect on a transactional basis.
Consider, as well, the inevitable evolution in automated valuation. Further expansion and integration of artificial intelligence into automated valuation models (AVM), algorithms allowing for controlled user data entry into the front end, would likely be a game changer in expanding the usefulness and the ever-elusive accuracy of these already popular tools.
Another way AI can be used in real estate is through natural language processing (NLP) and its application in chatbots and virtual assistants. These tools can provide 24/7 customer service to clients, answering questions and providing information about properties.
This can help agents save time and capture more opportunities. Chatbots that we, as agents, often integrate into our websites and social media accounts take a long time to program. They require a decision tree.
Building out a decision tree is time-consuming and can be costly. But, using NLP, AI algorithms can help chatbots understand, interpret and respond to a wide range of user questions and prompts in a more human-like and intuitive way.
Additionally, AI can be used to enhance the homebuying and selling experience — taking things further into the 21st century, so to speak. For example, virtual reality (VR) and augmented reality (AR) can be used to create immersive experiences for clients, allowing them to view properties remotely and get a better sense of what a property looks like before they visit in person.
In terms of the enhancement of personalized virtual tours, AI can create personalized VR touring experiences for each buyer based on their preferences and interests.
How AI can be used for analyzing data
By analyzing the buyer’s search history, previous interactions with the agent and other data, AI can create a customized set of tours highlighting the most important features to the buyer.
It can also analyze data from previous home tours to recommend similar properties that might interest the buyer. By suggesting other properties that match the buyer’s preferences, AI can help buyers find the perfect home more quickly and easily.
Regarding augmented reality, AI can be integrated to create interactive experiences that allow buyers to explore properties in more detail, perhaps even with their own furniture placed exactly where they desire.
For example, AI can enable buyers to move chosen furniture around in a virtual space or change the color of the walls to see how different designs would look in the space.
We will likely see these new technological developments help to take not only buyer engagement but virtual staging, property marketing and even property development to a whole new level.
Overall, AI has the potential to revolutionize virtual home tours by creating more personalized, interactive, user-friendly and engaging experiences for buyers. By leveraging AI-powered tools, real estate agents can provide a more efficient and effective way for buyers to explore properties remotely, saving abundant time and energy.
So, why won’t AI replace real estate agents?
All algorithms and computer-based programs are subject to the “garbage in, garbage out” (GIGO) rule. AI is no exception. This is probably the number one reason why AI will not completely replace a human being, as it means that if the input data to an algorithm is flawed, incomplete, biased, or incorrect in any way, the output of the algorithm will also be flawed, incomplete, biased, or incorrect.
For example, suppose an algorithm is trained using inaccurate or flawed data that is not representative of the real-world data it will encounter in practice. In that case, the algorithm will produce inaccurate or biased results when applied to new data.
Similarly, if an algorithm is fed incomplete or inconsistent data, it may produce inconsistent or unreliable outputs. So who or what will be the backstop to make sure that the necessary information is accurate to begin with?
The real-world scenarios that the AI will encounter in the world of real estate are specific to the individual buyer or seller and specific to property and location. In our realm, as far as real estate advice, one shoe never fits all.
We see this concept now, along with the inherent flaws, with automated valuation models; it’s why different models typically report a large variance in valuation and why they can be, and are, largely inaccurate. AVMs are a user tool and not an oracle, and this is certainly true with AI, as well. At least for the time being.
While AI can be an incredibly powerful and useful tool, it is important to remember that it is only as good as the data and the algorithms. Using the tool without the human operator (in this case, an experienced real estate agent) would be a mistake.
The real estate agent, though, as the operator of the tool, applies their own expertise and experience, monitoring the data as well as the output to ensure the best possible outcome and desired result for each individual client.
Overall, while AI has the potential to automate and certainly enhance many aspects of the real estate industry, it is unlikely to replace human agents completely anytime soon. Instead, AI is likely to become a valuable tool that agents can use to enhance their services and provide better value to their clients. It’s probably time to get on board.