The following was written by Ryan G. Wright and appeared as a featured article on VentureBeat.
Many consider real estate to be one of the last markets requiring the dying art of human interaction. However, that may change drastically in the coming years. Real estate companies are looking to streamline efficiency and results and thus look toward artificial intelligence for the answers. Soon, like the traveling salesmen of old, even Realtors themselves may become obsolete.
Let’s take a look at four ways artificial intelligence already affects real estate practices.
1. Bots target potential buyers
A dream team of some of the greatest minds in real estate, finance, and technology designed an AI to take the place of human agents. REX researchers programmed this AI to target potential buyers through social media platforms, placing particular emphasis on Facebook and Instagram ads.
REX is growing in popularity due to the fact that this artificial intelligence charges only 2% commission, much lower than the traditional 6% Realtor rate. It can also answer basic questions about properties. Rex is currently paying off big in larger real estate investment markets, like New York and California, listing and closing homes faster than wildfire.
According to Jack Ryan, the chief executive officer of REX Real Estate Exchange, “We’re listing and closing a home a day in California. We just launched in New York last week, and we already have three homes listed.”
2. AI streamlines searches and matches
Many real estate brokers now use artificial intelligence to save time and money in their real estate investments. For example, in 2016, the popular real estate publication Inman conducted an experiment it called “Broker vs. Bot.” They asked a Denver-area real estate journalist to pretend to be a buyer and select three homes they liked. Then, Inman asked three real estate brokers to compete against an artificial intelligence bot nicknamed “Find More Genius” to recommend homes similar to those selected by the “buyer.” The buyer was then asked which one of the recommended homes they preferred. Only the homes chosen by Find More Genius were selected.
The use of artificial intelligence drastically improves matching between prospective buyers and desirable properties, thus lightening the loads of real estate brokers and Realtors alike.
3. Chatbots take on client care
A wide range of real estate companies and lenders currently use chatbots to save on customer service costs. Real estate businesses incorporate chatbots on their websites to answer common investment questions, thus optimizing time management for these companies.
The nation’s largest real estate franchise, Re/Max, uses a new chatbot called Botplan. This chatbot helps realtors convert more leads, among many other important customer service features.
According to Brenda Tushaus, chief operating officer of Re/Max Results, “Botplan’s AI (artificial intelligence) solution is ideal for Re/Max Results because it is customized to reflect our brand. It’s built to engage, guide and keep the customer within our environment.”
4. AI predicts risk assessments, potential defaults, and necessary repairs
Many real estate investors rely heavily on AI to take the risk and guesswork out of property investments. AI can assess a property and perform a thorough, detailed risk analysis and even estimate how much money an investment has the potential to earn. Additionally, intelligent bots can predict loan defaults, thus increasing the efficiency of the risk assessment process and helping borrowers avoid less profitable properties.
Property managers can also deploy AI to monitor and predict when a home’s critical maintenance systems will need repairs or total replacement.
Real estate investments have jumped onto the AI bandwagon with both feet. Using these breakthroughs in technology will greatly increase efficiency in finding and rehabbing properties. How these breakthroughs will affect the face-to-face interactions of price negotiation and selling properties remains to be seen, but it will certainly be intriguing to find out.
Ryan G. Wright is the founder and CEO of DoHardMoney, a private loan lender.