Transforming Real Estate: The Impact of Artificial Intelligence
Artificial Intelligence (AI) is a rapidly evolving technology that is changing the way we live and work. It has the potential to revolutionize many industries, and real estate is no exception. AI has the ability to analyze vast amounts of data and provide insights that would otherwise be difficult or impossible to obtain. AI is already enabling self-driving cars, early-stage detection of cancer cells, smart identification of retail store locations, and voice-activated home systems that self-set alarms and thermostats.
Many believe this is all new to us but, it’s not. Remember ‘Heat Maps?’ Many of us set up our websites based on data generated from previous website visitors. That data was collectively analyzed and we were told what should be ‘above the fold’ and what should be on the left side of the page vs. the right. That is one of the first ‘cool’ artificial intelligence tools I can remember.
One of the key benefits of AI in real estate is its ability to streamline and automate processes. For example, AI can help real estate agents and brokers automate tasks like lead generation, scheduling, and follow-up. This allows them to focus on more strategic tasks like building relationships with clients and closing deals.
Another application of AI in real estate is predictive analytics. By analyzing historical data, as in the heat maps, AI can predict future trends and help real estate professionals make better decisions. For example, AI can analyze data on property values, rental rates and other market factors to help investors identify opportunities and make better investment decisions.
AI can also be used to improve the customer experience in real estate. By analyzing data on customer preferences and behavior, AI can provide personalized recommendations and insights to help buyers and sellers make more informed decisions. For example, AI can analyze data on a buyer's search history and preferences to recommend properties that are likely to be a good fit.
AI can also be used to improve property management. By analyzing data on energy usage, occupancy rates, and other factors, AI can help property managers optimize energy usage, reduce costs, and improve the overall tenant experience. And, just wait until you see what MIT is working on for property managers and landlords. (See list below.)
Overall, AI has the potential to transform the real estate industry. It can streamline processes, improve decision-making, and provide a better customer experience. As AI continues to evolve, we can expect to see even more applications of this technology in real estate and other industries.
Both Ring and Nest, companies behind two of the best video doorbell models, turned to AI to better curate alerts on devices, based on what users want to see. For example, AI allows the devices to recognize the difference between an animal and a package.
Many of our clients have Nest thermostats. The ‘selling point’ of this system is that it recognizes the residents’ habits and controls the climate accordingly, saving us money while doing so. This form of AI has been around for quite a few years.
We all have smart phones and many of us have our Nest and Ring products tied to our phones so that we can remotely control our homes - from garage doors to high-end ranges, lights, thermostats and more. Some even have wireless dog treat release systems WITH cameras so we can be in the office, check in on our fur babies and have the system release a treat for them throughout the day. Then, we can run our iRobot vacuums via our phones, to clean up any crumbs left behind!!
Anyone have Google or Alexa? Those heavily use artificial intelligence to prompt the user to ‘shop’ paying sites. I call those click-bait and avoid clicking on them at all costs but, on occasion…something catches my eye and, guess what? AI got it right - I am out of that product or have been shopping for it recently.
While we may fight this technology tooth & nail, we all have smart phones and have already invited Big Brother into our homes. In fact, we did this well over a decade ago. And, unless we go off the the grid, we will continue to be followed by AI, according to everything I’ve read on the subject. I feel that someone WILL invent a block for this (at least on our phones) but, how much blocking will we do? The world of convenience is at our fingertips. Going backward just doesn’t seem to make a lot of sense.
Now, let’s take a deeper dive into how AI can impact real estate.
- MIT is currently perfecting an AI system that will predict when home maintenance will be needed, based upon sensor data from properties. The system can even go ahead and schedule the work for you as well! Think about those who own multiple rental properties and how handy this tool could be for you/them.
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Lawn irrigation systems have used this type of system for years, sensing rainfall to avoid over-watering. Homeowners can program their systems to turn off their system when rain is detected.
- Zestimate algorithms are far more sophisticated than they once were. In the past, many areas were accustomed to a 35% error rate - either elevating the price or reducing it by that much in many cases. The median error rate is now 4.5%, a considerable difference and all due to AI. Many of our website vendors have a similar product and while they cannot replace real estate agents, the online valuations are significantly more accurate than they once were…again because of artificial intelligence.
- Predictive analytics such as Remine - one of the topics @Brad Andersohn reviewed with us on one of our Zoom calls. Many of us have used it over the years and I believe that because of AI, the platform will continue to improve.
- Real Estate CRM Software with Predictive Analytics. About 2 years ago, I was at a conference, taking a class on one of my apps that I had been using for about 2 years prior to that class. The class was supposed to be an advanced class to help us better use CRMs with predictive analytics. The instructor told us to long into our systems and when I did, I had a new ‘most likely to move’ client on the top of my list that I KNEW was not moving! BUT, the system had never steered me wrong and despite the fact that I had spoken with this seller within the past 3 weeks, I thought I’d shoot the husband a quick text - while I was sitting in class.
Lo & behold! He had JUST taken a new job and they had been sneaking a peek at homes in their destination city for the past two weeks. They were going to phone me when they got his offer package! Predictive analytics had been spot-on, as usual and it allowed me to get a jump on the preparation for the listing…and the seller made more money than they thought they would on their home sale because we had plenty of time to pre-market. Again, all thanks to AI and predictive analytics.
- AI is used in various steps of the mortgage process at some high tech banks. Analytics range from finding the perfect loan type for a borrower to finding the right investor for the loan.
- Finally, AI is not about replacing humans as many think. It’s about our need to derive greater value from increasingly sizable data sets. It’s about becoming efficient with automation, so humans CAN more easily analyze data, making their jobs easier. This allows them to focus on their real estate clients. Here are a few examples.
- AI can predict/target a buyers needs by creating tailor-made listing opportunities, based on clients’ preferences and previous viewings (including the amount of time spent on each listing).
- Performing marketing analyses - as mentioned before, this has the potential to change the world beyond measure! AI can predict future rent and sales prices, identify the latest market trends and even pinpoint new investment opportunities, all while maximizing ROI.
- While most of us like to speak with humans, if we need something quickly, there are some bot programs that can answer our clients’ calls. I see larger teams utilizing this, not individuals and small teams. For me, I prefer a human and am willing to wait for a human in the event I have a follow-up question to my original question. I will admit to being old-fashioned about preferring to speak in person or by phone over texting and emailing - bots are out for me!
- Blockchain: The execution of smart contracts is guaranteed with the help of predefined rules, not needing human intervention. These rules can check the legitimacy of the transaction and check contracts against already-established standards to reduce the risk of fraud as well. Many experts in the blockchain space are convinced that real estate transactions will soon be able to be carried out as easily as any online purchase.
- AI can predict/target a buyers needs by creating tailor-made listing opportunities, based on clients’ preferences and previous viewings (including the amount of time spent on each listing).
- iBuyers use AI for their auto-valuation model. This ‘disrupter’ is likely to be the largest threat to our industry with the development of automated buying and leasing experiences.
- Video and email programs: This technology continues to develop quite rapidly. Many programs for sending videos and emails, keep tabs on who opened/viewed the videos & emails and how long they were viewed.
- Social media: Real estate professionals purchase ads which are tracked with analytics provided for future advertising. There are even known ‘best times’ for real estate professionals to post to attract more viewers.
- Some MLS systems have already began using AI to accommodate the need to meet the needs of handicapped users. Photo information is 'dissected' and read aloud to buyers with visual loss and TTY (voice-to-text) capabilities for those with hearing loss.
- Other programs are in-the-works that will analyze photos - letting the buyer know that the countertops in the photo are granite or quartz, cabinets are oak or maple, flooring is real hardwood or engineered hardwood...You get the point! This could be a game-changer for our industry, to say the least.
This list could go on and on and as it happens, today, I attended an Open House where there was a lively discussion about AI and ChatGBT. I shared an example that one of our AR members shared with us on our AR ZOOM call...
Kat Palmiotti tried out the service and it was terribly wrong on many counts with one very simple question! I cautioned them to continue to use their own content in everything they do. The level of false information that we are seeing on this platform is exceptionally scary in our industry.
Many thanks to the wonderful AR members who joined us on our call and shared their experiences and knowledge about AI. We all learned SO much about AI - what a great meeting!
What are your thoughts on Artificial Intelligence and its impact on our industry?
© Debe Maxwell, CRS | The Maxwell House Group | RE/MAX Executive | SavvyBroker@me.com | Transforming Real Estate: The Impact of Artificial Intelligence
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