How Artificial Intelligence Impacts Real Estate Brokerages
Artificial intelligence (AI) — computers that learn by themselves — is taking our society by storm, and real estate technology is no exception. Though computers that think for themselves might sound scary, there is huge potential for the real estate industry to leverage this technology. Brokerages who employ AI have the ability to create super-agents who can understand their clients’ needs like never before.
AI is not science fiction — it’s being put to use in the real estate space today. Chatbots can tip off agents to client questions, predictive analytics tells an agent the best time to reach out, and recommendation engines help agents suggest homes based on a buyer's search history. Making sense of what AI innovations to expect will allow brokerages to protect themselves from competition and elevate the service they provide for their clients. Of course, AI will never replace the need for agents, but it can help improve client experience and put tech-savvy agents ahead of the pack. Here’s what you, as a broker or agent, should know about AI and how to leverage its power.
What AI can do for the real estate industry
AI in real estate is about computers making agents’ jobs easier by automating repetitive tasks, as well as providing them insights they otherwise wouldn’t have. A simple example of this can be found in prospect engagement chatbots. Chatbots have been popping up on websites across the industry and are a simple way AI can support a brokerage. The more a chatbot interacts with prospects, the more it learns about their needs and the more helpful it can be. Chatbots can answer questions about how many square feet a property has, or it can steer prospective clients to a helpful page on your website — and that’s just the beginning.
Companies like Truss are developing chatbots to help them lease small and medium-sized offices. The chatbot can answer questions about potential spaces, schedule appointments, help prospects register for open houses, and even help negotiate leases.
Brokerages should anticipate technology already being used in the commercial real estate space to make its way into the residential space. Companies like CityBldr use AI to help sellers connect and sell as a group. In the words of Devyn Cairns, CTO of CityBldr:
You take something that is done by humans for a long time, and then you find out that AI can really automate a lot of that process for you, and then one agent can become as productive as 100 were before.
Another way AI impacts prospect and client engagement is by integrating with a customer relationship management system or CRM. AI can sort leads by analyzing email behavior and determine which leads are most likely to become clients. Similar to how marketing teams leverage automation tools, real estate brokerages can now do the same. Systems base their intelligence on habits like email open and click-through rates. They can provide insight into how serious a prospect is about buying a home based on click behavior and tell the agent the best time to reach out. By using AI to capitalize on prospect behavior, agents become more efficient by narrowing their field to the most serious prospects.
Why AI will always need great agents
Right now, AI is only as effective as the agent who uses it. AI is great for identifying behavior, but it’s in its infancy and only an experienced agent is able to monetize the information and transform a lead to a qualified buyer or seller. Americans, in general, have become more comfortable providing information online, but are not ready to leave the home-buying decision completely in the hands of a computer — nor should they. Redfin CTO, Bridget Frey, echoed this sentiment to Geekwire in 2017:
We’ve found that our algorithms work better when we leave a place for a human to be in the loop, and I think that’s where the direction needs to go.
Brokerages need to be aware of the way AI will affect their agents and how competition that is using smart tools can disrupt their local market. However, they should be confident that their human experience, paired with innovations from AI, will set them apart from the virtual competition. By using AI in tandem with current best-practices for agents, brokerages stay a giant step ahead of the competition that relies only on technology. For example, SmartZip gives agents a competitive advantage in local markets by using predictive marketing to find qualified leads who are ready to sell. Agent-driven AI is primed to be the most effective use of this technology because it elevates agents instead of avoiding them.
Hayley Barna, of First Round Capital, summed up this idea recently in Fast Company:
There’s not a day or week that we don’t receive pitches with an AI component. The thing we’re interested in at First Round is, what’s the flip side? What are the investment opportunities in human impact? Not removing people from the equation, but giving people superpowers.
The future of AI is now
Now that we know what AI can do for brokerages and how real estate companies are preparing to use machine learning, let’s look at why AI is so important to the future of real estate. Technology has already changed the role of agents drastically over the past ten years. Today, agents find and communicate with the help of CRM software and targeted email marketing. But now, AI has the opportunity to help brokerages create a personalized experience for their clients at any stage of the client relationship – online and offline.
An example of the future of artificial intelligence in real estate is Realogy’s partnership with Ojo Labs, an AI company. This partnership is about more than implementing a chatbot, it’s about creating profiles for clients and using those profiles to build relationships. The relationship starts in the discovery phase for home buyers when they’re exploring the market but don’t want to use a third-party system and be targeted as a lead. The bot learns about the buyer by asking questions and suggesting properties. From there, it will make the connection to an agent ready to take the transaction offline with the client’s permission. It’s a great example of how brokerages in the future will leverage technology for their agents and use it to provide next-level service for their clients.
Adopt AI without changing your mindset
Adopting some form of artificial intelligence looks to be a decision many brokerages will face in 2018. While early indicators show that consumers are ready for a technology-driven way to find a home, at this point, most of these solutions and tools will complement a licensed, trusted real estate agent with a reputable brand. Today, focusing on how AI can help facilitate and modernize your brokerage’s current processes and improve your client service is the most important thing to think about. You don’t need to be a data scientist or an engineer to find easy-to-implement AI solutions that meet your own real estate needs. Just remember to always do your research. Make sure you are familiar with the pros and the cons, evaluate all available options, and then make a calculated decision.