This expert piece was written by Wissam Moubarak, Country Manager of Propertyfinder Lebanon.
Technological innovation lies in the fabric of industry transformation, with real estate being no exception. Yet, despite the high volumes of information processed on a daily basis, the real estate sector is still behind in terms of technology application, as many processes are still conducted manually.
On the other hand, one of the biggest new technologies of the 21st century is artificial intelligence (AI), though it was technically founded as an academic discipline at Dartmouth College in 1956.
Computers are imbued with the ability to think like humans would, and solve problems by learning over a period of time. And though investors and innovators may have realized that AI is the technology of the future, it is still in its infancy. Most AI today is Weak AI, narrowed to a specific set of tasks such as beating humans at chess.
Nonetheless, AI is infiltrating the real estate industry, allowing for a much more efficient processing of data. Does this mean that the days of real estate agents are numbered? Probably not, but AI might actually be better at selling a $600K home simply because of its access to so much more data. Let’s look at the many ways AI is and can be present in real estate.
When it comes to the real estate industry, securing a sale goes on par with providing a client with the property that best fits their criteria. Getting to know the client may still require human interaction, but adhering to their preferences by offering a set of relevant options can be done faster and more efficiently via an algorithm that can put together relevant data with customer preference.
It may be that recommendations are based on characteristics such as the number of rooms, the size of the space and the price; but in the future we may actually be looking at recommendations that are based on personality traits and personal preferences, say by asking the consumer to fill out a profile that looks into his or her ideologies.
Long-term relationships with a customer can be developed through AI-based customer relationship management (CRM) systems. In fact, AI technology can predict who is likely to default on their loan or fail a credit check, which in turn can help real estate companies be more profitable, with fewer delays. AI can even be used to predict when maintenance may be needed.
Calculating a Property’s Value
AVM (Automated Valuation Model) is built using regression analysis based on previous home sales. It helps calculate a property’s value by comparing to similar properties sold at a specific time. In the future, this should be able to give an estimate of a property’s price based on more variables. The estimate price could even depend on individual tendencies, not just market price.
Newsletters today are no longer specialized enough; personalized nurture campaigns are the future. Propertyfinder, for example, uses dynamic ads and retargeting campaigns in order to approach customers and/or find the people more prone to conversion.
Down the line, an email will no longer be based on consumer preference only, but location, time, event, and even weather. It should allow for a much more personal connection with the customer based on a complex set of variables.
Real estate companies are incorporating chatbots into their websites, as they allow them to save on customer service costs and optimize the time they spend answering questions. The virtual assistant is available 24 hours a day and can answer all common questions like a customer service representative.
A real estate company can now set growth goals to be monitored by an intelligent robot. The risk can be assessed based on parameters. Real estate crowding platforms on the other hand can use AI to predict loan defaults, while investors can actually set their investment criteria on a dashboard and get a list of properties that match those criteria.
Proptech (Property Technology) is being developed to help builders automate the material purchasing process. It is a set of cross-industry technologies aimed at disrupting the way we research, rent, buy, and manage property. Robots, for example, can handle materials acquisition so that expenses on building property can be cut down. It is still a new trend whose scope will surely be evolving as time goes by.
The good news is that AI is actually more effective when paired with humans, rather than replacing them; it is not a battle of machines vs. humans. And the most successful real estate companies are likely to be the ones that embrace AI and use it to grow their business.
It seems that the only way forward is by harnessing the capabilities of machine learning and AI, as they complement the irreplaceable elements of experience, instinct, and knowledge in humans, as well as add value by making real estate processes more automated, efficient, and cost-effective.