AI Is Replacing Real Estate Professionals: True or False?

AI tools have been automating real estate sites, personalizing home searches, and handling a good deal of desk work for some time now.

AI (artificial intelligence) gleans information from government records, the Multiple Listing Services, and other data sources. It’s used in marketing, budgeting, and communications.

The vast majority of brokerages surveyed this year say their agents depend on AI to assist with some part of their work. AI is part of most any online platform these days; so those who say they don’t use it, well, maybe they do.

Yes, the AI Real Estate Agent Exists.

A company called eSelf AI supports one Portuguese brokerage serving mostly U.S. and Brazilian clients. It can learn buyer preferences, pinpoint matching listings, and offer remote tours. It answers messages immediately, doesn’t let anything slip through the cracks, and crunches numbers in a flash. It’s brought in $100 million worth of sales.

Then there’s Homa, already guiding home buyers in Florida. This new, AI-focused real estate company claims to remove the “red tape, middlemen, and mystery” from a deed transfer. It guides a buyer through the whole process, one step at a time. It does not, however, claim to fully replace the human agent.  

While machine learning has not made human beings obsolete, today’s “AI agents” can:

• Guide potential buyers through a portfolio of thousands of listings, day or night.

• Digest all the research and data that could possibly be relevant to a decision at just the moment it’s needed, and enable a party to estimate the gains that a particular negotiation could bring in returns.

• Draft legally and factually effective contracts.

• Set up showings and release smart locks at scheduled times.

• Present information immediately on any aspect of a property.

• Suggest properties and prices that align with personal preferences.  

• Find red flags in contracts.

• Manage funds in escrow.

AI agents can also handle follow-up assistance for buyers after they close on their homes.

AI Solves Problems—But Creates Problems, Too.

AI solves problems. And it keeps solving them better as it works, then gets human feedback.

In the next few years, AI could learn much more — enough to do complicated work as a matter of course:

• Provide tools to predict weather and climate impacts.

• Expertly calibrate energy use in smart homes.

• Discern whether a structural issue needs an engineer’s inspection and recommendations.

• Produce unbiased appraisals.

Ah, you say (because you read Deeds.com regularly)… But AI could also replicate bias, because it learns from all the material we feed into computers. Bias in, bias out! And yes, that’s an issue that has yet to be solved, even by the world’s most innovative leaders. 

What’s more, AI might give the false impression that complex deed transactions can be done without lawyers, financial advisers, or tax experts. These professionals supply important, case-specific guidance to help their clients make good decisions in specific situations. (Note: While we’re real writers here, not AI, we at Deeds.com can help you get oriented on matters involving deeds, but cannot provide financial or legal advice.)

And as you’ve probably noticed, AI can be one heck of an internet nuisance. Some agents are keen on playing with AI-generated room layouts, when a home shopper just wants to see what the place looks like. A buyer might want the choice of trying out different interior decoration styles — but for sellers’ agents to show them enhanced imagery can border on misleading advertising.

And speaking of misleading, Dave Conroy, the director of emerging technology at the National Association of REALTORS®, warns agents:

[The generative AI tool] ChatGPT is an excellent tool and may jump-start creativity, but your expertise will be needed to verify accuracy.

Conroy elaborates:

You need to know that the results of ChatGPT-created text are generally 80% to 90% accurate, but the danger is that the output sounds confident, even on the inaccurate parts.

If an agent isn’t careful, it’s easy to publish a property description with mistakes, fall afoul of copyright law or fair housing policy, or communicate with people in inappropriate ways.

Anything Humans Do, AI Can Do Better? Probably Not.  

Contrary to what some tech proponents seem to believe, the human touch is priceless. Here are just a few reasons why. And if you’ve bought a home before, you can likely add to the list:

• A human agent knows when a buyer’s eyes are glazing over, and prompts the buyer to remember particular things.

• An agent knows where the seller will compromise with a discount or a fix for a problem after the inspection is done.

• A skilled buyer’s agent negotiates with the seller’s agent and relates empathetically to cues. Skilled agents can tell when give and take is possible, and ultimately acceptable, even desirable, to everyone.

• An experienced agent listens for issues next door, and remembers what other buyers have said that could be relevant to this one.

• Local brokerages have networks and can call on other professionals for tried-and-true help.

Could AI eventually take over negotiations? It will certainly inform them. An AI agent could give a party the confidence to counter an offer right away, for example, by producing up-to-the-minute comps and neighborhood data. Homa’s tool equips the parties with “negotiation prompts” and guides its customer’s interactions all the way through closing.

But the AI agent will likely always need some level of human oversight. There’s something to be said for the fine art of working with delicate human emotions — and it’s indispensable where co-buyers are persuaded, and the deeds to precious homes transferred. 

The Verdict on AI? It’s Mixed.

AI is a two-edged sword. It will undoubtedly lower administrative costs for many firms. Because AI can process information and generate correspondence 365 days a year, seven days a week, 24 hours a day, it’s an efficiency powerhouse that no human being can match. And it’s already replacing major portions of administrative jobs.

It’s great with data, and unable to comprehend the emotional impact of misunderstandings. It cannot save a deal or head off litigation the way an empathetic and skilled negotiator can. At least not now.

At its best, artificial intelligence could transform real estate in a positive way, by lessening the need for human agents to compose listings, handle document reviews, and work on repetitive tasks.

It would be silly to claim this technology won’t transform real estate. It’s already doing so. And still, there is and always will be a need for human instincts at the core of the business of deed transfers.