When my grandfather emigrated from Poland, like so many immigrants of his day, he arrived with very little. Eventually, he managed to make a comfortable life for himself and his family, but he continued to see the New World through the lens of the old.
Every so often, he would reprise that point of view with one of his favorite expressions. When he came upon a neighbor polishing a fancy new car in their driveway, he would say, “Is the car for you, or are you for the car?”
It was his way of warning his friends not to become so enamored with an object that they fail to see when they’ve become a servant to it. Lately, I’ve been thinking about my grandfather and his signature expression as the real estate industry — and every other industry — tries to get its arms around artificial intelligence.
Learning without a net
Let me be clear: I do not believe an enthusiastic embrace of AI is merely a sign of vanity — the proverbial shiny new car that brought forth my grandfather’s skepticism. Instead, I think we’re in a moment when we know AI will change our business; we just don’t know how.
One reason is that AI is unlike any other technology that has descended on our industry. It’s different in the sense that we’re figuring it out at the same time as the rest of the world.
Typically, when it comes to technology, real estate is years behind. So, while it’s exciting to know that we’re now moving at the pace of business (and sometimes even setting the pace), it also means we no longer have the luxury of learning from others’ successes and failures. In other words, we’re in for a lot of trial and error.
Today, AI tools are being developed for everything in our industry: communicating with clients, setting up showings, assisting with negotiations, writing contracts, managing escrow and more. Brokerages and agents are also spending a lot of time experimenting with what works for them and what doesn’t.
3 guiding principles for AI in real estate
Ultimately, I believe that to succeed in leveraging AI, brokers and agents must approach the task with these three guiding principles in mind:
Principle 1: Audit before you automate
First, we must focus on our own processes and operations to understand what should be optimized and how. We must look at all facets of our business: client-facing, agent-facing and back-office.
AI may enhance some functions, replace others and have no impact or a negative impact on others. But if we don’t know where we excel and where we need improvement, then we won’t know where to invest in AI or how it will pay off for us.
Principle 2: Do the math
Second, we must work to understand our business challenges computationally. This past summer at Inman Connect San Diego, Columbia professor Josh Panknin, director of real estate artificial intelligence research and innovation, gave a presentation in which he said AI is simply mathematics.
The computer can solve just about any problem as long as you can structure the problem computationally and input the necessary data.
We see this at play in the move-propensity software that agents are deploying to see which of their past clients are likely to move in the near future. The problem (past client hires new agent because their former agent didn’t reach out at the right moment) is computationally solvable:
The likelihood of moving depends on factors such as time in current residence, age, changes in job status, income, changes in family composition, online search activity, social media activity, etc.
Brokers and agents who think about challenges computationally will have greater success identifying and implementing AI solutions.
Principle 3: Automate the routine, elevate the relationship
Finally, we must reinvest the time and money we save from successful AI deployment to enhance our value further and grow our business. In her latest podcast, my colleague Amy Corr, chief brokerage officer of @properties Christie’s International Real Estate, spoke with tech CEO Jim Olson, who wisely remarked that AI itself is not the differentiation agents must seek.
Olson posited that the well-worded listing description, the great piece of collateral built from a smartphone app and the ability to schedule and route a weekend’s worth of showings in seconds are the table stakes for the future of real estate. Agents who don’t master these tools will soon fall behind.
But the agents who surge ahead won’t only master AI tools; they will also leverage the reclaimed resources to focus on the differentiating factors that humans excel at far more than machines: understanding nuance, managing emotions and nurturing relationships, to name a few.
AI running your show?
It’s possible that one day in the near future, there may be brokerage firms or real estate agents who say to their clients, “The computer will recommend your top 10 listings, schedule your showings, negotiate your contract and handle your mortgage approval. And I’ll see you at the closing table.”
If my grandfather were around today, we would probably say to those agents, “Is AI working for you, or are you working for AI?”
Gavin Swartzman is the new president of Christie’s International Real Estate. Connect with Gavin on LinkedIn.
