Ways Artificial Intelligence is Used in Real Estate

When you see an estimate of a property value, it’s generally based on predictive analytics from artificial intelligence. Automation with AI has the potential to manage workflows, analyze markets and generate reports to track market performance. Among its applications are:

-Generating appraisals and estimates. These have traditionally been based on neighborhood comparisons and human opinion. Zillow says it uses AI for its property valuation estimates, as well as for providing floor plans and photos. Automated valuation models value properties based on data and images.

• Creating 3D models of properties for potential buyers to use any connected device — such as a smartphone or tablet — to get a sense of how they look.
  • A lifeline during the pandemic when sellers were reluctant to have buyers in their homes, 3D home models have continued to grow in popularity.
  • Matterport creates 3D virtual tours of properties using augmented reality before buyers visit.
  • Some companies are using AI matchmaking tools in property recommendations, partnering with ChatGPT and using a chat-based search plugin to help buyers find homes.
• Informing landlords of any problems through smart sensors/monitors for thermostats, including cameras to show a plumbing leak.
  • Smart home devices help notify people of any problems inside the property.
  • AI helps devices learn user preferences and adjust settings for utilities, improving tenant satisfaction and helping landlords stay up to date and avoid major repairs.
  • At least one company is saying AI facilitates communication between property maintenance teams and renters, using speech recognition to transcribe maintenance calls and tagging them for prioritization.
  • AI can activate lights in communal hallways with motion sensors, so they’re not left on when no one is there.
• Assisting in property management. AI helps managers screen tenants, collect rent and schedule maintenance.
  • Chatbots can answer questions about rental rates and availability, as well as guide customers through the application process, alleviating some of the work of human agents.
  • AI-assisted apps include processing payments, tracking leasing performance and improving occupancy and operational efficiency.
• Aiding finance companies in decision-making, including mortgage approvals. In underwriting, AI is used to analyze borrower information, including credit scores, income and employment history, so a borrower’s profile can be evaluated to offer the best rate to charge.
  • AI automates loan servicing, including customer communication.
  • Finance companies are already using AI to deliver near-instant decisions on mortgage applications.
  • Underwriting decisions are rooted in AI’s risk calculations.

Take a long view

Though the many upsides look promising, there are always risks. The industry has and will have to put more safeguards in place to prevent AI technology from misleading consumers. The National Association of Realtors® and the local boards work hard to educate consumers and Realtors® alike the challenges of AI and how to overcome them. 

For property evaluations especially, these AI generated reports don't always accurately reflect the seasonality of real estate market, nor do they get right the neighborhood characteristics and ammenities that affect better valuation of a home. 

 Tenants may not want their property monitored. Landlords should have a dialogue with their tenants so everyone's concerns are considered. And AI doesn’t get everything right. For instance, it may switch off a service, such as heating, when it is needed. Tenants must have the option to override AI when necessary. 

For now, whatever your position is in real estate, work closely with a me as your real estate professional to help you understand how AI might be involved in the transaction and what to watch out for with it.

Modified by: Theresa Tscheschke Gunal ; Used courtesy of Carol Kerner-Odgis, Home Actions, LLC