With the advent of tools like ChatGPT, much has been written in the last year about the potential implications of artificial intelligence and its impact on various industries. AI in real estate is no less of a controversial topic than it is in healthcare, retail, and elsewhere.
As is true with most types of businesses, there are both pros and cons for artificial intelligence in real estate. The key is understanding which is why, all so you can act accordingly.
PRO: Enhancing the Customer Experience
Especially as your real estate business continues to grow, you’ll need to capitalize on any opportunity to make your day more efficient. That’s one of those areas where AI in real estate comes in incredibly handy. Not only does something like a chatbot free up your valuable time so you can focus on more important matters, but it does so while also empowering the most important thing of all: the customer experience you’re able to offer.
Think about it like this: from the perspective of a potential customer, you should be available 24 hours a day, seven days a week, 365 days a year. If someone has an important question about a property in your inventory, they want an answer – the time they ask it is largely irrelevant. Of course, you actually being available at the drop of a hat is unrealistic… but an AI-powered chatbot can be.
Not only can a chatbot answer basic questions about matters like pricing and availability, but it can also refer people to someone for a more comprehensive conversation should that be necessary. At that point, the chatbot becomes the best type of employee: one that doesn’t eat, doesn’t sleep, doesn’t take a break, and never goes on vacation.
AI in real estate can also streamline things in a variety of other ways, too. It can help make property searches faster and more efficient, for starters. Instead of spending hours wading through listings manually, you can simply input exactly what you’re looking for and let an AI tool take care of the rest. It can help cut through the noise and allow those ideal listings to rise to the top faster than ever before.
From that perspective, artificial intelligence is also an opportunity to automate a lot of the important (but time-consuming) menial processes that typically fill up your day. Everything from financial matters to administrative tasks can be passed off to software, all so that you can focus more on building those relationships you need moving forward.
PRO: More Thorough Data Analysis
Thanks to the sheer volume of information being created by buyers and sellers in the real estate industry, another major pro of artificial intelligence in the field has to do with the robust level of data analysis it affords. This doesn’t just make uncovering trends and patterns easier – it can’t help but lead to better investment decisions as well.
It would take your average human hours, if not days, to wade through a few years’ worth of historical data about a market to truly understand the bigger picture in front of them. An AI tool can do it in a matter of seconds, making sure that you have all the actionable information you need to always make the right decision in the moment.
Along the same lines, AI in real estate can also be a great way to provide more accurate price predictions than ever based not on gut instinct or intuition but on real, actionable historical data about a market. That way, you’re never accidentally pricing so high that you’re turning off prospects and never pricing so low that you’re leaving those hard-earned dollars on the table.
CON: The Situation With Data Privacy
Of course, the other side of the coin has less to do with the volume of data the industry is creating and is more about what is happening to it once it exists. Data privacy is a real concern in almost every field, but once you consider the sheer amount of personal information in real estate, you begin to get a sense of how pressing this truly is.
The average real estate transaction is a wealth of personal identifying information about someone’s financial history, their job employment, and more. How is that data being collected, and where is it being stored? Who has access to it under normal circumstances, and what is being done to make sure that people can’t access it without authorization? These are all difficult questions to answer, and most businesses will address them in slightly different ways. They must be looked at carefully, however, if buyers and sellers alike are going to be able to put their faith in this digital-driven system.
CON: Bias in Algorithms
Another potential obstacle that must be overcome if AI is to have a real place in real estate has to do with certain biases that may be present in the algorithms these tools are using. Remember that these tools need to be “trained” by ingesting and learning from real data.
That data has to come from somewhere, and right now, it’s coming from human-derived sources. Humans are naturally biased in certain ways, and if we’re not incredibly careful, the tools we’re using for things like automation in real estate will carry forward those same unfortunate trends.
Balancing the Impact of AI on Real Estate
Many people anticipate a situation where AI in real estate may become such a transformative presence that it leads to significant job displacement across the board. Anyone who tells you this is an absolute certainty is probably only looking at a lot of the cons outlined above. However, anyone who tells you this is impossible is likely also wrong. As always, the truth probably rests somewhere in the middle – or at least it should.
As is true with most forms of technology, AI in real estate shouldn’t replace human jobs at all. Instead, it should support and empower them. If there are a lot of other people who do what you do, your competitive advantage, therefore, becomes how you do it. Automating what you can and carefully using artificial intelligence when appropriate should free up as much of your valuable time as possible to focus on running the most successful real estate business that you can.