Artificial intelligence is growing in every industry, but real estate is slower to adopt this technology. We are now in an early development state of real estate AI. Real estate tech companies are investigating different use cases, and some of this technology is just becoming available.
AI is sometimes called a “disruptive technology” since it can bring huge changes to industries. When people think of AI they might imagine science fiction futures and robots taking away jobs. Most people don’t really know what AI does or how it works. The most common type of artificial intelligence is machine-learning, which is any program that learns from data. AI is used primarily to automate repetitive tasks, and recognize patterns in large quantities of data. But AI is also good at making judgments, detecting suspicious behavior, finding errors, and language processing.
Let’s look at some of the potential AI applications, and how they might change the real estate industry.
Crunching Big Data
One of the early uses of AI was Zillow Estimate, which puts price tags on every Zillow property. Now, anyone can look at estimated housing prices on their map. Previously, this kind of market information was only available to brokers, and democratizing that data has had a big impact on the industry. This is a boon to consumers, who now have more information. Because Zillow influences consumer’s perception of value, it’s important that their estimations be as unbiased as possible.
Zestimate was rolled out in 2006 and has grown from 43 million homes with a 14% error rate, to estimating 110 million homes with a 5% error rate. The AI has learned to improve its price predictions using all of Zillow’s data.
AI can be a great tool in data analysis. Besides Zestimate, AI could be used to make predictions about the housing market, demographic market research, and financial analysis. This could become a tool people will use to make smart investments, or for sellers to find the best time to put their home on the market.
What could AI do for real estate?
Artificial intelligence could also be a tremendous tool for brokers and agents. In other industries, customer relationship management (CRM) software is making use of AI. These programs can keep track of your customer data, make recommendations for when to contact people who are ready to sell or buy, and quickly find homes to recommend to clients.
A few years ago, Iman conducted an experiment called Broker vs. Bot. In the experiment, a broker was pitted against a bot to recommend similar houses to a client’s dream home within a 30 minute window. Each time, the bot won.
Now that’s not to say that bots and AI should, or will, replace brokers. Human decisions and relationships are incredibly important in real estate. What this does show is that a bot can become skilled at finding similar properties, which could save time for the broker.
Another way to save time would be AI data management. Even going digital, there is a lot of red tape and forms involved with buying and selling properties. Machines are great at checking data rapidly and accurately, and could let brokers know when information is missing or inaccurate.
No conversation about artificial intelligence would be complete without addressing chatbots. Machine language processing has grown leaps and bounds, and chatbots are truly coming into their prime. The greatest advantage of a chatbot is it’s accessibility for clients — a chatbot is always available to talk and answer questions. No more missed points of contact with your client.
Chatbots are best used as a soft initial contact before a client talks to a human. While they are great for answering some questions, customer service, and making appointments, chatbots don’t replace the human element in client relationships.
In March, Realogy announced they are going to release a suite of tools for real estate professionals, including some with AI. This includes an OJO Lab chatbot, and a bot assistant for agents and brokers that can be used through Amazon Alexa.
In the next few years, it’s likely that more companies will develop AI tech for real estate, and it will eventually become more commonplace and accessible. It’s important to anticipate how AI tools can improve your business, and how they might change the field of real estate. One thing is for sure: this technology isn’t going anywhere.