Special offer

AI and VR and the real estate end is near

By
Real Estate Agent with The Virtual Real Estate Team 104556

OK, that was an exaggeration but for those who plan on being in this business for the next 20 to 30 years the end is near may not be so far fetched. In my last two posts I gave opinions on the extreme surplus of REALTORS® we have as well as the war for data supremacy. What I want to do now is give what I think will eliminate at least 50% of the real estate agent population and it will be here before you know it and it starts with artificial intelligence.

Besides movies like 2001 A Space Odyssey with an AI computer gone amok, we have the earliest real example with IBM's Newton. Even in the infancy stage of machine learning, Newton could win at Chess and jeopardy against the best, and it is now composing music based on mood. This is not quite HAL 9000 but it starts to get a bit scary to me. Newton has also been transformed into Einstein for the SalesForce CRM and it can adjust how you are working with your target market and past clients faster that hiring a human. I have a lot of Facebook IT engineers as investors and they will caution to not get ahead of ourselves, humans still are involved with adjusting the algorithms but more is being doen by the silicone based life form and they will tell you this is moving quickly. In the next paragraph I want to revisit the 5 main parts of a transaction and to give an opinion of what we will see in the next five years.

Data, Prediction, Judgment, Action, and Result are the five and here is how the first three will be taken voer from agents and how even the last two could be handled by AI. AI takes the big data and it analyzes numbers, pictures, history, location, amenities, market forces, drive times, schools, amenities and well, maybve the kitchen sink. This is why the war for data is so important. It is kind of like the novel Dune, he who control the spice controls the universe. The big the data the more powerful the controller is, so size does matter. The agent who drilled down into the AVM prediction to produce a hyper-local judgment is far less accurate the AI which doesn't throw into the mix a stone age brain beset by non-rationality and subjective opinion. Hence the price of the house becomes very specific and AI could make even further judgments about why it is not selling and adjust from there.

Now we add in augmented and virtual reality and let's not get hung up on the Oculus Rift because this is not what will make the biggest difference. Google Earth going VR is where combining with AI will make the greatest disruption. Let's take my business model which is out of state investors and apply AI and VR. AI has analyzed the data and given a price on a home which means the investors need to have an 8% cap rate, 13% cash on cash, and in an area of appreciation. The Investor in Palo Alto wants to take it a step farther and say let's tour the neighborhood without me coming to Oklahoma City. We get on our Google Earth VR program and our avatars are shaking hands in front of the house and we decide to walk around the neighborhood to see what other homes look like and are people taking care of their yards. Satisfied the investor ask for a ride in our virtual car to see what Monday morning traffic is like in taking a child to school at 7:30 AM and along the way see some close by amenities. Now here is where my business gets a massive adjustment, AI can now write the contract, choose the best lender and insurance, and knows where to close. We have now gone from through all five steps. Yes I am someone in there but my role has now changed drastically.

I have one more post in this series where I want to try to define the REALTOR® of the future but I want to summarize where I think we are now. The modern agent has been able with what we have now to quadruple their production in less time and with lower expenses just in the last decade. Adding AI and VR this way will put an even greater strain on surplus and unneeded agents because now I am doing 8 times the production with AI and VR. How soon do I see this becoming more than a new trend? based on who I talk to five years and in ten years it can take over much of what we do. With this development you can see why Zillow is forcing brokers and MLS systems to give them more data. No they don't want to be a broker but could they ever be the funnel for everything, you bet. In the next post I will go into the importance of RPR in this data war and also what I think the REALTOR® of the future needs to be. Spoiler Alert! We will still need real human beings!

 

Comments (9)

Hannah Williams
HomeStarr Realty - Philadelphia, PA
Expertise NE Philadelphia & Bucks 215-820-3376

Joe Pryor  information is fine but seeing the property in real life is different .  Walking inside and getting that feeling --   a computer  cannot replace that   

Jun 03, 2017 01:40 PM
Joe Pryor

Yes it can and in many cases it will.

Jun 03, 2017 03:18 PM
Kasey & John Boles
Jon Gosche Real Estate, LLC - BoiseMeridianRealEstate.com - Boise, ID
Boise & Meridian, ID Ada/Canyon/Gem/Boise Counties

Joe Pryor  - I have not read your other blog posts but I am going to go back and do so.  I love your forethought on these subjects.  I have been thinking about VR technology and it's place in real estate a lot recently.  We work with many out of state clients as well and VR Google Earth along with Matterport type 3-D virtual tours and a generation of people who are used to and trust technology and I absolutely see that as the way of the future.  I hadn't thought of the AI piece, so that is an interesting side to think about more.  I'm afraid that agents need to not have their head in the sand with these advances in technology and will have to have foresight and the ability to adapt or they will be left in the dust. -Kasey

Jun 03, 2017 03:31 PM
Anna "Banana" Kruchten
HomeSmart Real Estate - Phoenix, AZ
602-380-4886

Joe the entire industry is surely going to look totally different within 20 to 30 year.  Just go back 5 years and it's incredible how fast it's all moving - and it will only speed up faster and faster - and more efficient.

Jun 03, 2017 04:15 PM
1~Judi Barrett
Integrity Real Estate Services 116 SE AVE N, Idabel, OK 74745 - Idabel, OK
BS Ed, Integrity Real Estate Services -IDABEL OK

The whole business is undergoing a fast paced change and has been for a while, it just seems to go faster and faster.

Jun 03, 2017 05:36 PM
Myrl Jeffcoat
Sacramento, CA
Greater Sacramento Realtor - Retired

I've been licensed since 1981.  I've seen a lot of changes in the past 35 years.  I look at where I think the future is going, and I'm glad I'm near the end of my real estate career, rather than at the beginning of it.  I feel for those who planning real estate careers in the future.

Jun 03, 2017 09:13 PM
James Dray
Fathom Realty - Bentonville, AR

Good morning Joe.  I've read all of your previous posts however, this one makes sense.  I feel you are not far off target.

Jun 04, 2017 02:47 AM
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Joe, those REALTORS thinking they can only put forth SOME effort will be out of the business quickly.    Those of us with a good database taking care of our clientele will do fine.    I think the computer still will not sell homes.

Jun 04, 2017 07:25 AM
Roy Kelley
Retired - Gaithersburg, MD

This is very good reading for those who plan to be in the real estate business for many years.

Jun 04, 2017 09:44 AM
Mark Loewenberg
KW of the Palm Beaches - Palm Beach Gardens, FL
KW 561-214-0370

yes it will cost more to grow more in the near future.. but get on that bandwagon before it turns into a spaceship!

Jun 07, 2017 06:03 PM