Real estate agents, hold onto your hats! The industry is on the cusp of a technological revolution, and it’s being led by none other than artificial intelligence. From lead acquisition to property valuation, paperwork to property search, AI is set to shake up how things have been done for decades. The impact of AI on the real estate industry promises to streamline operations, personalize the customer journey and, ultimately, make businesses more efficient and profitable. In this article, we explore some of the ways AI is already changing the game and how it will shape the future of the real estate industry. For the past 20 years, proptech has been developing fast, and AI is something no one can afford to ignore.
AI’s Impact on Lead Acquisition
Leads drive the real estate industry. Those leads may decide to buy real estate, sell real estate or even join a brokerage as an agent. Leads are influenced by economics, legislation, life events, relationships, employment, communication and sometimes, the weather. The red-hot market we saw in 2020 and 2021 led to the creation of countless technologies designed to measure, influence, funnel, sort, categorize, inform and eventually sell to those leads. The introduction of AI may disrupt all of it.
Lead acquisition is often the most focused-on activity for any brokerage or agent. AI promises to change what this looks like for nearly every business with a digital presence. First, ads are about to get much more advanced. Behavioral learning engaged in by AI technologies will begin mapping aand filtering micro behaviors and qualifying leads. Finally, we may be headed to a place where we can guarantee the quality of a lead based on the measurement of micro behaviors.
We are going to see much less effort required to create effective ads. Give AI access to sales and communications data, and you have a system capable of delivering new leads and their likelihood of purchase based on past results. AI can create communications along the customer journey to maximize these possible purchases. It is a close step from here to imagine AI making the entire customer journey individualized for each lead and communications fulfilling that individual lead’s needs. What could happen here is automated and individualized customer experience from top to bottom of the sales funnel. These leads won’t need to be categorized, they just need to be plugged in.
AI’s Effect on Property Valuation
Real estate valuation might be one of the most heavily impacted parts of the industry. Knowing how to evaluate real estate is very much an art. Agents who have honed their ability to price real estate accurately are in high demand. Their listings sell faster and they negotiate much better terms on behalf of their clients.
As most real estate professionals know, Zillow estimates can be very far from accurate. It is not a far stretch of the imagination to see AI creating more accurate property assessments than anything currently on the market. Real estate’s value can be subjective when considering home improvements like granite countertops or land improvements such as timber stands. AI is already creating unique art by referencing and recognizing existing images. It is not very far down the road that the unique and subjective becomes identifiable and quantifiable by an AI system. Identifying countertop material, flooring, paint, roof quality and even cabinet design could be quantified against desirability and past sales to create highly accurate assessments. Satellite imagery can be scanned to show crown spacing in trees, combined with current weather patterns and soil samples, past sales and harvest data, and pulled together into increasingly accurate pricing for timber or farm crops.
AI’s Impact on Paperwork
Paperwork has always been burdensome, especially for unique real estate. Forms have to be created according to legal specifications and each individual is different. The paperwork must work for everybody, so there are increasingly more complex options to fit all circumstances. Sometimes there are no suitable options. AI will be able to create simple and individualized legal documents to purchase and sell any good or service. This might be as simple as answering questions on a recording, the system recognizing vocal answers and the automated generation of a signed document. This system might even be equipped to answer any questions regarding the contract. Advanced AI models may be able to participate in negotiations with a table of participants, auto-generating new conditions for the contract in real-time as they are agreed to.
AI’s Effect on Property Search
Property search is one of the most valuable pieces of the real estate market. Zillow, realtor.com and Redfin are the most well-known sites dedicated to real estate search and we are all aware of the significance of these companies. Hundreds of sites are devoted to real estate search with varying amounts of success. Imagine if one of them is beating the industry to the punch with AI support. These sites sometimes limit what real estate is being shown based on how much realtors pay them to show it, which does not benefit the consumer. One of these companies will invest in AI that pulls in every available option and allows unlimited enhancements to the search based on the user’s inputs. These inputs might be as simple as saying, “I don’t like that property, but I like the house color and the horse stables at the neighbor’s place.”
Linking MLS feeds to your website can take a lot of work. MLS feeds vary greatly; some haven’t been updated since the early 2000s. AI is now generating custom code from scratch based on the language used between two communicating sites. We can anticipate technology emerging quickly that can link up two pieces of software with minimal error.
The Future of AI in the Real Estate Industry
The real estate industry is poised for a significant transformation with the introduction of AI, which promises to streamline lead acquisition, personalize the customer journey and improve the accuracy of property assessments. It can also simplify paperwork and enhance property search capabilities. While some may be apprehensive about the impact of AI on the industry, it is clear that AI technology has the potential to revolutionize the way the real estate industry operates. Real estate businesses that embrace and integrate AI into their operations will likely benefit from increased efficiency, accuracy and profitability, ultimately leading to a more dynamic and competitive business.
These are only a few ways AI may impact the real estate industry. Most of this is low-hanging fruit that is likely in the works as you’re reading this. Over the next 10 years, AI will become second nature to our existence and we will take this wonder for granted as we fear its evolution.
