Are Real Estate Agents Obsolete?
Artificial Intelligence tool ChatGPT has professionals of all stripes wondering what their futures will look like. But results are mixed so far on AI's utility for real estate transactions.
On one side: 'Proponents see better machine learning tools creating rapid and more accurate real-time valuations for homes, generative AI spitting out marketing material, and data mining. Those in the business of selling homes have already begun tapping existing AI tools to speed up rote tasks like finishing property listings and paperwork.' (The Real Deal) I anticipate that with the automation of baseline tasks my team will be able to provide even better service to clients - applying an experienced human layer to any blind spots generated by nascent artificial intelligence. The most interesting use case I've seen so far is EliseAI which has been automating customer conservations across multiple channels to deliver a better leasing experience between residential Landlords and Tenants. This is a tool that landlord Stonehenge has been using so that they can quickly respond to Tenant inquiries at all hours while streamlining paperwork. Scheduling makes up some of the experience of finding home - when there's channels to make that easier it's a win for all parties. But deciphering between reality and hype is critical. Take Opendoor which makes instant cash offers for homes at roughly 10% less than their true market value. While it touts artificial intelligence and machine learning as part of its algorithm to streamline the real estate transaction through home flipping at scale, its results for shareholders have been dismal. Their stock is down 78% over the past year and it lost almost $1 billion in the third quarter of 2022. In this instance the algorithm delivered poorly for investors. Perhaps a 5% commission payable to brokers upon successful closing isn't such a bad business after all? Over the long-term I anticipate artificial intelligence will bring more ease to the real estate transaction and lower fees. Real estate agents have already seen average commissions reduced from 6.02% in 1992 to 5.66% today. As efficiency within our own businesses are created I expect the consumer to benefit as well. Agents will still play an active role in the transaction but they'll have to add value in ways that AI can't replace: Assessing value in nuanced markets (i.e. "What's the Value of Your View?"), negotiating complex deal terms, and real-time intelligence through active deal flow and broker relationships. Having executed hundreds of residential sales, leases, and commercial deals I'm still confident that I have better answers than ChatGPT on your next sale or search. So if you or anyone in your network is on the move please feel free to touch base.