For decades, the real estate industry has mostly resisted the tech disruptions emerging from Silicon Valley. The slow, skeptical acceptance of digital transformation in real estate has been accelerated by the effects of the COVID-19 pandemic. 2021 saw a major surge in demand for houses, but pandemic precautions resulted in the normalization of virtual tours and a greater acceptance of various Artificial Intelligence (AI) tools. These technologies have been in development for a long time, even if we only have felt their ubiquity in the last few years.
Here are five ways AI is transforming the way buyers, sellers, and agents interact with transactions, and with each other, in the real estate industry.
1. Home Valuation
Whether you are buying or selling a home, you should know the monetary worth of the property in question. Typically, this is determined by extensive research and calculations based on a large set of data points that agents use to create property estimates. Automated Valuation Models (AVM) use machine learning algorithms that can process more data sets than a traditional appraisal is able to factor. And it does so within seconds. Human appraisals can take three to four weeks. According to Forbes magazine research, AVM models are 16 percent more accurate for buildings worth one million or less.
2. Data-Driven Search
At any given time, there are hundreds of homes on the market, but you are looking for the perfect home for your family. AI matchmaking tools can help sieve through endless listings and provide a shortlist of properties that meet your wants and needs. AI tools like HouseCanary and Trulia are able to analyze images, yelp reviews, and public school records among others to give a wider understanding of the property you’re considering.
However, as real estate industry leaders have repeatedly argued, AI works best with a “human in the loop”. AI cannot tell you things like which room gets the most natural light or where is the best spot in the yard to set up your barbeque smoker. Real estate agents are the most reliable source for understanding what the experience of living in a house is going to be like.
3. Connected Home
Homebuyers in this era have come to expect certain amenities like washing machines and dishwashers, but a new item has been added to this list: smart home technology. If you are a homeowner, chances are you have already set up a home application like Google Nest that allows for light switches, TVs and even your thermostat to be controlled remotely by your phone. This allows you the convenience of turning on the heater or AC an hour before you arrive home from a long trip. Surveillance cameras can be added to the connected home network, providing a greater sense of security. Similar to the screen time usage report, the wifi connected thermostat will create pattern reports that can help minimize cost. With the home camera, the homeowner can access the footage from their phone, which can put your mind to ease.
4. Internet of Things
Similar to smart home technology, the Internet of Things allows for connectivity between various smart applications in a house or a commercial building. According to the researchers at MIT Real Estate Innovation Lab, the Internet of Things is one of the most innovative AI tools that will help monitor maintenance issues and increase energy efficiency in the long run. Building managers, for instance, can track heating and cooling systems and can proactively maintain the system before the building occupants notice the fluctuation.
5. Home financing AI tools
Fintech companies are using AI tools to personalize home financing options, from finding the right loan, and the best repayment options, or even figuring out how an individual or an investor is losing money on a monthly or a yearly basis. With this information, these AI tools suggest ways to minimize such financial leakage.
Artificial Intelligence tools aren’t necessarily doing anything different from what a human being does. The true benefit of what AI does is that it speeds up the data collection and interpretation process, which efficiently provides rapid results and gives users an edge in the competitive real estate market. However, AI cannot replace the human factor. The efficiency of AI depends on the processing of available data, but data can be incomplete or duplicated, or it might require the emotional intelligence of a person to fully understand the results. AI real estate tools work best when they are accompanied by a capable real estate professional like a Senné associate.
For more on what our team of experts can do to make your dreams our goals, contact us today at 617.314.9400 or via our contact form.
Published: November 16, 2022
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