The real estate industry, like the technology industry, is constantly evolving. New uses of technology and trends are reshaping how we buy, sell, and manage the property. Artificial intelligence, or AI, is one of the most talked about technologies to impact what we do. It can automate processes, gain insight through data analysis, and improve customer engagement.

You have probably heard a lot of chatter about AI, but what impact will it have on the real estate industry? Of course, AI is already in use in real estate and other sectors like healthcare and finance, so it is only natural to expect the use of AI to increase.

By understanding how AI will affect the real estate industry in the future, we can better prepare ourselves for the changes that may be coming.

Overview of AI in Real Estate

The real estate industry has already implemented many types of AI programs:

Predictive analytics

Using algorithms to analyze large data sets available in public records can help make predictions. For example, algorithms can be used to identify current trends and make predictions about future prices.

An example of predictive analytics you may be familiar with is the Zestimate. Zillow uses available public data and computer algorithms to analyze sales prices of similar homes in a particular area. Unfortunately, the Zestimate is not always an accurate depiction of the sales price. As AI becomes more refined, it will become easier to analyze public data more accurately.

Automated Document Processing

Before fax machines, a real estate agent, after meeting with their clients to prepare an offer, would have to hand deliver the paperwork to the seller’s agent or personally present it to the home seller and their agent. 

Once fax machines became widely used, a real estate agent could send the buyer signed offer directly to the seller’s agent. This was an innovative step that helped to make the offer process faster.

Now with automated document processing, a contract can be written, signed by the buyer, sent to the agent, shared with the seller, signed by the seller, and returned to both agents without ever printing a document. Utilizing a secure online document processing system has made the negotiation process much easier and quicker than the pre-fax days.

Real estate professionals can manage signed documents easily and quickly share them with lenders, closing companies, and their office personnel, meeting compliance with deadlines and legal issues.

Chatbots

You may have come across a website or two that has a chatbot. They will answer questions and provide customer service for the website.

A chatbot can address inquiries about buying, selling or renting homes in the real estate industry. They can also route you to a real estate agent who can answer your questions, book property tours and appointments, help you to search listings, provide property information, and answer frequently asked questions about the home buyer or selling process. 

Virtual Reality

Virtual reality tools have been in the real estate industry for some time. 3-D tours have been widespread, allowing viewers a better feel for the home’s layout. Virtually touring homes has been a technology used for years in the industry.

Virtual home staging is now available. Virtual staging allows the viewer to get a feel for the size and use of a room by placing furniture on a digital photo. This is a lower-cost way to stage a home without renting furniture and physically taking it to the house.

Architects also use virtual reality to show a building that has yet to be built. Unfortunately, it is hard for most buyers to visualize a property that still needs to be completed. However, you can see a realistic visualization of the exterior and interior of a building through VR.

Drone Mapping

Drone mapping is a newer technology used by new construction developers. A computerized view of the work site can be created through drone imagery instead of more detailed surveys. 

Drone mapping provides multiple purposes throughout the construction development.

AI is an integral part of the real estate industry and helps all parties in a real estate transaction.

How do current and future AI technologies impact the individual parties of a real estate transaction?

Artificial Intelligence creates solutions that simplify and expedite all aspects of real estate transactions. AI technology streamlines the buying or selling experience by leveraging predictive analytics to make faster decisions.

Impact on the parties in a real estate transaction

Real Estate Agents

AI is significant in the emergence of automation in customer service and marketing. This automation will allow real estate agents to provide faster, more efficient services while reducing costs and improving customer satisfaction.

Improved access to customers, better marketing insights, and increased efficiencies in managing their workloads will be available as AI-generated tools evolve. AI can revolutionize the real estate industry providing agents with tools to help them better serve their clients. 

Home Buyers

AI technology has allowed consumers to shop for homes online, view properties remotely, and receive personalized recommendations tailored to their preferences. Soon, home buyers can access virtual reality simulations of potential homes. It will allow them to visualize the property in real life and walk around it as if they are physically there. 

As chatbot technology improves, buyers can get better and faster answers to questions about a particular home.  

Technology will make it possible for home buyers to find their dream home in less time.

Home Sellers

Home sellers will also benefit from improving AI technologies. For example, the same algorithms that help buyers find homes will help sellers find the perfect buyer quicker and easier. In addition, access to pricing information and virtual reality can assist in getting a home sold more quickly and for the best possible price.

Mortgage Lenders

Improvements in AI technology will also impact mortgage lenders. It will improve and streamline the accuracy of loan processing. Because AI can quickly analyze large amounts of data, it will help lenders make informed decisions. In addition, Chatbots will interface with borrowers to provide a better customer service experience.

Title Companies

Title companies will be able to save time and money by utilizing AI to review documents and contracts accurately. Fraud and risk protection associated with real estate transactions is another way that title companies can take advantage of AI. Through artificial intelligence, title companies can improve communication with their clients and streamline their operations.

Home Appraisers

In 2022, the Federal Housing Financing Agency approved using remote appraisals for purchase loans. This decision allows for using automated valuation models (AVMs) and other desktop appraisals drawn from public records and digital property intelligence.

AI technology is helping appraisers assess the condition of properties. As AI technology continues to evolve, so will its usefulness in assisting appraisers in making accurate assessments quickly and efficiently. You can learn more about the appraisal process in this previous blog post.

As a real estate professional, I have witnessed significant changes in the industry over the years. I expect the future use of AI only to enhance the experience for all parties involved. I believe the one thing that won’t change is the need to create positive relationships with all parties in a real estate transaction.

If you are considering buying or selling a home, contact me, Charles D’Alessandro, your Brooklyn Real Estate Agent with Berkshire Hathaway HomeServices – Fillmore Real Estate. As a Brooklyn real estate agent with over 35 years of experience, I help Brooklyn Homebuyers and Sellers with advice and resources. Reach me by phone at (718) 253-9500 ext. 1901 or by email at [email protected].