TL;DR:
- Artificial intelligence (AI) is set to play a larger role in the homebuying process, moving from behind-the-scenes to the forefront.
- Zillow’s mobile app now offers “natural language” searches, allowing consumers to find more precise results based on their preferences.
- AI has been used by Zillow since 2006 to provide automated estimates of a home’s value, with the error range reduced to just 2%.
- AI technology enables 3D virtual tours, floor plan generation, and square footage estimates based on photos.
- AI can engage buyers and sellers, answering their questions and enhancing their comfort level before involving a broker.
- AI is utilized by ATTOM to generate risk estimates for insurers and lenders, leading to more customized insurance premiums.
- While AI has limitations, such as biases and potential hallucinations, its integration into the real estate industry is transforming the homebuying process.
- Real estate professionals should embrace AI as a tool to enhance accuracy, efficiency, and customer experience.
Main AI News:
The role of artificial intelligence (AI) in facilitating real estate transactions is set to expand significantly, as it transitions from a behind-the-scenes tool to a prominent feature in various areas. Esteemed experts gathered at the annual conference of the National Association of Real Estate Editors in Las Vegas to discuss the future of AI in the industry.
Zillow, the nation’s largest real estate portal, has introduced “natural language” searches on its mobile app to provide users with more precise results. Instead of navigating through filters based on limited criteria like the number of bedrooms and ZIP code, consumers can now simply speak or type their preferences. For instance, an individual could effortlessly search for a three-bedroom house with a charming brick exterior, built in the 1950s or 1960s, boasting a spacious backyard in close proximity to a public park in Denver.
Jasjeet Thind, Senior Vice President of AI and Analytics at Zillow, emphasized the immense advantages that artificial intelligence will bring to the real estate industry. Zillow has been leveraging machine learning and AI since 2006 through its Zestimates, which provide automated estimates of a property’s value. Initially, the pricing error range stood at 14%, but significant progress has been made, reducing it to a mere 2%.
AI has extended its reach to various other applications as well. The COVID-19 pandemic popularized 3D virtual tours, allowing consumers to explore properties remotely. Zillow has taken this concept further by utilizing AI to generate accurate floor plans and estimates of square footage for each room based solely on photos.
Furthermore, AI enables real estate platforms to engage with potential buyers and sellers even before they are ready to connect with a broker. By answering queries and providing valuable insights, AI enhances users’ comfort levels and fosters engagement. Rob Barber, CEO of ATTOM, an organization specializing in comprehensive real estate market data, believes AI will also be increasingly employed to help consumers envision how a room might look with different furniture arrangements or appliances.
ATTOM utilizes AI to generate risk estimates for insurers and lenders, enabling them to offer more customized insurance premiums. This data-driven approach proves invaluable in streamlining the insurance process and mitigating potential risks for both parties involved.
While AI’s integration into the real estate industry is undoubtedly groundbreaking, it is important to acknowledge its limitations. Glenn Phillips, CEO of Lake Homes Realty, aptly describes AI as an “idiot savant” that lacks true understanding. AI models are highly susceptible to the biases of their creators and can produce inaccurate results if fed flawed data. Moreover, AI is prone to hallucinations, generating fabricated answers that sound plausible but have no basis in reality.
Even when AI operates flawlessly, the efficacy of natural language searches still relies heavily on the quality of written queries. As William Holmes, Head of Agent Partnerships at Opendoor, notes, AI is not meant to replace real estate professionals. Instead, it empowers those who possess the skills to effectively utilize AI in their operations.
Conclusion:
The growing influence of artificial intelligence in the homebuying process signifies a significant shift in the real estate market. AI’s ability to provide precise search results, automate valuations, facilitate virtual tours, and engage with buyers and sellers will streamline transactions and enhance the customer experience. Real estate professionals who adopt and leverage AI technology will have a competitive advantage in this evolving market landscape.
