We live in an era of burgeoning artificial intelligence (AI). We use digital assistants to perform online searches and handle scheduling, chatbots for customer service, and in the near future, we may even rely on AI for more personal interactions, like therapy.
So could AI-backed robots and algorithms one day be able to replace real estate agents?
A Future With AI Real Estate Agents
There are certainly some strong points in favor of AI in this application. Already, human agents are working with AI to help uncover better deals, negotiate more appropriate price points, and even curate a better selection of properties for buyers.
AI would have a number of advantages over real estate agents:
- Data processing. Machine learning algorithms are far better at processing vast amounts of data than their human counterparts. Real estate agents often need years, if not decades of experience buying or selling thousands of homes before they get a feel for what’s normal in the industry. But an algorithm could feasibly look at sale prices, home values, and variables from decades of transactions to gain that experience in a matter of days. On top of that, AI bots can use data from customer preferences to make custom property showcases, fine-tuned on an individual level.
- Cost efficiency. There’s a reason automation is replacing so many human jobs: it’s cheaper. Coming up with the machine learning algorithms capable of crunching thousands of data points isn’t fast or easy, but because it can be managed cheaply and scaled indefinitely, it has the potential to be far more cost-efficient than a human agent. Given the option, most home sellers would rather pay a smaller commission to a machine—so long as it means selling the house for as much as possible, as quickly as possible.
- Objectivity. AI algorithms also have the advantage of being objective decision makers. When a machine tells you a property is a good deal, it’s because it has calculated that answer based on all the data that’s available to it. When a human real estate agent tells you it’s a good deal, it may be because of their intuition, or because they have a vested interest in getting the property sold.
However, there’s no guarantee that AI could fully replace human agents. There are still several obstacles to overcome:
- Property preparation. For the foreseeable future, homebuyers will want to personally tour their properties before making the purchase, and that means someone will have to step in to make sure their first impression is a good one. Robots may be able to make suggestions, but it takes a human body to do the work—and real estate agents will be able to sort out those recommendations, combined with their own experience, to create an atmosphere that welcomes and impresses potential homebuyers.
- Intuition and personalized negotiation. In the previous section, we credited AI systems with having more objectivity, relying less on intuition than on data. While that can be a source of strength, it also undermines the power that intuition can have in the process of negotiation—especially when negotiating a deal between two human parties. Human real estate agents are, for the time being, better at reading the emotions and subtle cues of other human beings, and can use that information to make more intelligent offers—and therefore, close deals faster and more efficiently.
- The personal experience. For many prospective homebuyers, the homebuying process is a personal and emotional one. They want to share the excitement of touring new homes and negotiating a deal with someone who understands what they’re feeling, and can have a real conversation with them. Humans simply offer a better personal experience than machine learning algorithms can, and that makes human agents difficult to replace.
So can AI one day replace human real estate agents? In some ways, it already can, but it still has a long way to go before it wipes out the profession entirely. Instead, we’ll probably see increased rates of real estate agents working with AI, side by side, to help real estate buyers and sellers negotiate the complex world of real estate.