Artificial intelligence: friend or foe in the real estate world?

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Published Date 10/15/2021

“Fish are friends, not food!” says Finding Nemo’s resident shark, Bruce, who is trying to bolster his sea-borne reputation by using affirmations so that he is not a hated enemy. But the rest of the residents in the marine world in the deep, deep sea are not convinced.

Consumers as well as Realtors are just as unconvinced that artificial intelligence is not a danger to the industry they know and love, but in the end, AI can’t truly replace humans. According to CNBC’s Diana Olick, some of the biggest names in the business, such as Compass, Zillow, and LoanSnap, are now employing AI to help find buyers the perfect mortgage and the perfect home, making it a game changer for real estate agents. Slow and steady are no longer the rule in any real estate transaction, however. Lightening speed is more the norm now, all because of AI.

Thing is, most real estate data is public. From land records to title documents, purchase prices and even mortgage liens, information is everywhere online, making it fair game for AI use. Before all this, it was an onerous process to go to local offices and obtain all the information. Now computer algorithms can now go through millions of documents in seconds, looking through property values, debt levels, home renovations, and even some of a homeowner’s personal information.

AI can be helpful for Realtors by aiding them in hunting for listings in today’s ultra-competitive housing market, where there are a dearth of properties from which to choose. When Covid hit, AI took off. Agents desperate to find new listings found new ways to access them in record time without having to leave their quarantined homes. “The traditional agent would go knock on the doors of a lot of homes. Now AI helps you find the homes that are most likely to sell in the next 12 months, and it does so by triangulating all the data associated with the home, like when the home last sold, how long the owner has occupied the home, what rate the home sells at in that particular area,” said Joseph Sirosh, chief technology officer at Compass, a real estate brokerage. He goes on to say that AI “triangulates all of that information to predict which home is likely to come for sale, so the agent can now approach that homeowner, offer his or her services, and have a much higher probability.”

Virtual tours? Online data can also help homebuyers find exactly what they’re looking for, rather than touring house after house. They can evaluate the price of their property in comparison with other properties in the market, search for specific types of homes in ultra-specific locations, input desired square footage of indoor and outdoor spaces and then get immediate alerts when something hits the market.

According to Olick, AI is not doing anything that traditional research couldn’t accomplish, but it does accelerate the process dramatically, which in a fast-moving and ultra-competitive market, is crucial to these businesses.

CNBC, TBWS

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