Seeking Housing Market Info? Today, 61% of Home Buyers Check AI First.

Artificial intelligence is transforming real estate deals, says a new Realtor.com® survey. Through that survey, the National Association of REALTORS® found that eight out of ten U.S. home buyers use artificial intelligence (AI) when making their plans and navigating their home purchases.

The top two AI models for buyers are OpenAI’s ChatGPT and Google’s Gemini. Social media channels are also influencing purchasers. Nine in ten check in with YouTube, Facebook, or another platform. Gen Z prefers to go to TikTok for housing information. Of course, the social media channels are investing in AI for their users — led by Meta, the parent company of Facebook and Instagram.

Is AI Replacing Real Estate Agents? No, But…

Newsweek has reported on the “dramatic” nature of the change in buyer’s access to information through ChatGPT, Gemini, and the like. One oft-stated concern involves the use of AI as a substitute for a human agent’s guidance.

Granted, most buyers surveyed (62%) think real estate agents are the best source of real estate information. But AI ranks as a close second. Sixty-one percent of the buyers surveyed said AI is their go-to source of knowledge.

Buyers now know that AI tools can instantly supply on-point answers to situation-specific questions. AI can generate information about places and prices, and tips for getting from Point A… to a deed. 

Most industry insiders insist that AI is no substitute for a human being’s ability to calm the buyer at rocky points in the journey to closing.

Why Is AI “News”? Haven’t Real Estate Companies Used AI for Years?

True. Visitors to real estate websites now type in conversational questions. They can find, say, a home near public transit and near restaurants — not just the right-sized homes in a given area.

Agents, too, have been using AI. Many now rely on it to compose first drafts of client correspondence, notes, and home descriptions. AI tools can review leases and contracts. They can help find errors or risks in the heap of paperwork that makes up a transaction. AI has found a place in permitting plans, in rental management, and in building methods. It can help find problems with systems in advance of system failures. It can work with smart homes to save energy and lower emissions. (But note: AI depends on massive electricity flows, so it’s hardly carbon-neutral itself.)

While none of this is new, there are continual advancements in the way AI works. Agents may find themselves surprised at how well the newest versions can edit drone videos, or achieve virtual interior decorating. While real estate search sites have been blending in machine-learning features over several years, AI is becoming better by leaps and bounds as it processes users’ inputs. 

And today, the number of people using AI for self-help is striking. Some are using AI tools as affordability aids. AI can complete large sets of comparisons at once, sometimes leading home seekers to listings that an agent wouldn’t have noticed.

What Are the Possible Pitfalls When Relying on Artificial Intelligence?

The answers given by generative AI models can seem completely solid and confident, but they can be wrong. AI models are trained on the information fed into them. If material is biased, distorted, offensive, or inaccurate, the models may pick it up and replicate it.

AI tools that help home buyers with financial planning only look at certain aspects of a household’s situation. Their answers should be double-checked by a mortgage specialist or an actual financial planner.

And what about our real estate professionals’ use of AI? Should we be concerned?

At this point, the missteps, biases, and dangers of AI dependency are well known in the industry. Staging tools sometimes create strange set-ups that would be absurd or dangerous to replicate in real life. And using AI to improve images can easily border on misrepresentation.

AI has made business errors, too. Remember Zillow’s short-lived iBuying concept? Part of the reason it failed was technological. The company relied on its in-house AI tools to make cash offers on homes. AI couldn’t predict when the market was about to run past its peak. It was a major business setback, and many people lost their jobs because of it.

Buyers do need to understand what’s going on with the companies involved in their deed transactions. The savvy buyer asks what tech an agent will use, how the model works, and what personal data guards are in place. Is a human checking the documents for accuracy? Are businesses telling their customers when and how AI is being used? Does the company’s website take customer privacy seriously? Do customers have the ability to examine and adjust the data kept in the system?

Are AI-Led Decisions Going to Treat Us All Fairly?

“AI won’t end open houses,” writes Cameron Sperance for Boston.com, “but it will change who walks through the door.” Sellers may appreciate this. After all, sellers hope to attract people whose lifestyles match up with the homes they list. But agents must be sure they aren’t steering some potential buyers away based on the way people are assessed by AI models. 

Today’s industry leaders have internal protocols for alerting a human to biased language, or potentially unlawful steering of customers. Best practices include audits of AI-assisted decisions for compliance with fair housing law and policy. As the National Fair Housing Alliance points out, competent human oversight keeps processes legal and fair.  

AI-aided fraud is anything but fair. Manipulators have used AI to forge legal instruments, impersonate property owners, and transfer deeds. Even experienced agents have wired funds to false sellers. Learn more, with our Updated Guide to AI Fraud in Real Estate Deals.

Let’s Put It All Together

What do the latest surveys and commentaries tell us about AI and real estate? Some of AI’s promised benefits are real. AI can streamline clerical work, provide unusual insights, and help people reach their goals efficiently.

All that acknowledged, even the smartest machine does not replace human experience, local knowledge, and ethical standards. As many novel technologies do, AI makes mistakes. When the information fed to AI is flawed or outdated, so are the results it spits out.

Ethical AI use in real estate requires transparency and a commitment to fair practices. Cameron Sperance at Boston.com has a message to deed holders and deed seekers, too: “treat AI as the scout, not the closer.”