Will AI totally remove agents from the real estate picture? Experts say, it’s not likely.
If real estate conferences are any indicator, artificial intelligence will be the major topic in upopming months, and chances are 2024 will be remembered as the year when the AI revolution began. Along with the usual round of market forecasts, the year began with a number of long-simmering issues bubbling to the surface, including commission lawsuits, a barrage of legal actions involving the National Association of Realtors, and a fledgling new trade association helmed by Jason Haber, an agent with Compass, and Mauricio Umansky, co-founder of The Agency.
However, AI will likely overshadow even these issues this year. In a recent survey of more than 130 brokerage leaders (representing two out of three transactions in 2023) conducted by
Delta Media Group, agent use of brokerage-provided technology jumped to No.3 on the list of the top five brokerage concerns. Recruiting new agents and figuring out how to counter eroding profit margins remained the top two, while the impact of commission lawsuits came in at fourth. “It’s no surprise that recruiting remains the largest challenge for real estate leaders and that the majority see the industry lawsuits as another top challenge,” says Michael Minard, CEO of Delta Media Group, one of real estate’s largest technology solutions providers. “What is a bit of a surprise is seeing the importance of agent tech adoption catapult into the top three business challenges. This indicates that real estate technology will be under a microscope in 2024, and it had better benefit the brokerage’s bottom line.
Work Smarter
Most industry experts see AI as a way for even elite agents to enhance their business. “The name of the game in real estate is to work smarter, not harder. Many great tech products have been made available for agents to streamline the process of home buying and selling — from DocuSign to virtual staging and virtual tours to automated marketing campaigns and much more. Now, with AI, there is even more opportunity for agents to use technology to their advantage and to work efficiently and effectively,” says Christy Budnick, CEO of Berkshire Hathaway HomeServices.
Unlike earlier tech innovations, few anticipate AI will eclipse the agent. “If anything, I see generative AI enriching the relationship between the agent and client by streamlining processes and personalizing the luxury real estate experience even more than it is now,” says Michael Altneu, vice president of Coldwell Banker Global Luxury.
In their 2024 trends report, Coldwell Banker Global Luxury shares, “With its immense availability of data, generative AI has the power to be as disruptive to luxury real estate as the internet was decades ago,” a thought echoed by many property technology experts. Expectations are that AI will streamline mundane tasks associated with buying and selling, including the closing and underwriting process. Generative AI will lead to more precise market analyses, pinpointing trends as they gain momentum. Other benefits include price evaluation, targeted marketing strategies, predictive analytics, and enhanced virtual tours and videos.
Generative AI, a subset of AI, uses machine learning to analyze text or other input and convert it to images, per Dave Conroy, NAR’s director of emerging technology. Images produced by generative AI create fantasy homes online; real-life applications include virtual reality and video.
Rajeev Sajja, senior vice president of Digital Marketing and Innovation at Berkshire Hathaway HomeServices Fox & Roach Realtors, ticks off AI’s potential and current benefits, particularly generative AI. In addition to content creation, he points to business productivity, including goal setting, business planning, generating ideas, and the “whole journey of the listing, including lead generation.” He emphasizes the ability to leverage generative AI to create video.
All these applications drive more exposure for the Realtor and their brand. Already, AI is integrated into some applications such as CRM, something Sajja anticipates will become widespread.
When proptech, especially virtual showings, first came on the scene, it elicited predictions of the agent’s demise. Even though the vast majority — approximately 97% — of buyers begin their search online today, an equally high number use an agent, a number that has consistently grown over the years.
“Because real estate is still a very human-centered, emotion-led business, I don’t see AI doing the full scope of the work of an agent, rather handling the transactional, information analysis work. Agents help people make the most important transaction of their lives, managing relationships and incredibly nuanced situations, which is not something technology can replace but instead can enhance,” says Altneu.
Power of AI
“There are so many ways to leverage AI,” says Meghan Barry, president, Who’s Who in Luxury Real Estate and LuxuryRealEstate.com. “Things as simple as providing the framework for property descriptions, website content, press, drafts of complicated communications to clients, and assisting with legal or contractual language. AI has so many day-to-day uses, but it can’t be a replacement for humanized high-touch service; it should always be a first step that eliminates the busy work.”
Good to Great to Exceptional
Goodfellow sees generative AI as still in its infancy, but he foresees powerful applications for real estate, such as immersive videos.
Tami Simms, a trainer for the Institute for Luxury Homes Marketing, says: “Most real estate agents think of AI as a resource for copywriting and not much more. While it can be a tool for that, I see the real opportunity as one of efficiency — extrapolating and analyzing information, managing databases, and streamlining operations that allow a professional to focus on what they do best — cultivating personal relationships with their sphere of influence.”
AI’s benefits also extend beyond an individual to teams. “It all goes back to an agent’s business model” and having quality people on the team, says Goodfellow. Then, as AI takes over tasks, agents can move that team member to a more productive use.
It IS Personal
“There is nothing more personal than buying or selling a home. No matter if it’s $200,000, $2 million, or $20 million,” shares Budnick. “Every buyer evaluates a home for how their family would live in it and enjoy the space, including the surrounding community. On the seller’s side, bidding farewell to a place a person has called home can be very emotional — no matter the reason for the move. Nothing can replace a trusted advisor during these high-emotion and high-stress times.” Recent brand campaigns such as Berkshire Hathaway HomeServices’ “Real Stories About Real Estate” put the personal element into focus by showing how agents go beyond just showing houses.
Some fears regarding AI in real estate may be justified, but from today’s perspective it seems eliminating the agent is not one of them. If anything, elite agents expect that AI will only boost personal connections with clients and other agents.
