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Op/Ed

Artificial Intelligence (AI) in real estate: Negating or monetizing an agent’s experience?

There is a growing interest and concern regarding the role of artificial intelligence in real estate, but most arguments miss the core of what makes an agent appealing.

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Have you ever emailed or texted someone, and subsequently opened Facebook on your phone to immediately see that person in your news feed?

You read the entire terms of service when you downloaded that app, right? So you remember agreeing to every bit of your phone’s hardware and software recording and interpreting the signals that your everyday actions are creating (just nod your head yes—it’s watching you right now).

Artificial Intelligence is seeing tremendous growth in consumer-driven industries. It is the ability for software to learn and adapt to consumer behavior via live feedback. Cars, websites, wearables, and apps are becoming more intelligent and adaptable.

We’re seeing huge advances in the affordability of AI software that match the exponential growth of hardware’s computing power.

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Simultaneously, human labor in developed countries is increasing in cost. Minimum wage laws, increasing liability, and rising health care costs are pushing employers to replace labor with technology. McDonald’s employees become kiosks that order Big Macs. Chase Bank tellers are replaced by apps that scan and deposit checks. Companies like Circuit City and Borders Books shutter their stores as websites more efficiently serve their customers.

How AI intersects with RE

Intelligent software has massive potential for creating technology that changes labor markets. Real estate labor is a natural target, and a couple of recent pieces got the ball rolling this past week. Russ Cofano penned a broker outlook that viewed “cognitive computing” not as a threat to labor, but an asset to the baseline of real estate’s agent intelligence:

“So here’s the question. What if cognitive computing enables agents to be better professionals and make better recommendations to their clients? What if access to cognitive computing power, and the data necessary to power it, becomes the 21st century equivalent of the MLS utility?”

Further, Cofano states, “Cognitive computing has the potential to add massive value to the real estate brokerage value proposition and do for agent professionalism what no other initiative could touch.”

While the piece focused on the superior delivery mechanism (Upstream vs. the MLS), it provided support to the idea that brokers could adopt intelligent data systems to improve agent capabilities industry-wide.

Not surprisingly, a different take came from Rob Hahn, focused on the costs of repetitive labor and the likely evolution:

“The $6 billion question is where real estate brokerage services fit in the spectrum of services if we put McDonald’s order-taker on the one extreme and the Chief Engineer of Nuclear Fusion Reactors on the other extreme in terms of specialized skill and knowledge.

I think most of my readers know the answer. Real estate is far, far closer to McDonald’s than it is to McDonnell-Douglas.

…rote procedures and manual inputs are being displaced by technology. Why would it be any different for the rote procedures and manual inputs in the real estate business?

Answer: it won’t.

Those real estate agents who survive will have to be ‘upskilled’ and focus on niche areas or ‘be equipped to handle smart systems.'”

Comparing two views on AI

So we have two very different views of software intelligence’s effect on real estate agents. In one, brokers might adopt cognitive computing measures to improve agents’ core capabilities to serve consumers. They improve and survive as a unified group of forward-thinking adopters.

In another, AI wipes away the entire foundation of repetitive services performed in real estate. This debases the masses of agents and eliminates the need for their services. It leaves only the specialized practitioners above water when it’s done.

It would be remiss of me to gloss over the McDonald’s analogy. The skills that allow agents to survive in their occupation can’t be crammed into a single linear comparison. It seems prudent to point out that the comparison of rocket scientists, real estate agents, and Egg McMuffin order takers should be complex.

In recent real estate history, replacing a repetitive procedure in the sales process with software has simply changed the sales process. It hasn’t removed the sales person. There are graveyards full of real estate labor would-be disruptors who have a poignant understanding of that history.

artificial-intelligence-REAL-ESTATE

The intrinsic skills that keep real estate agents strongly entrenched in the industry seem to center on two things:

  • Personalized intelligence (unique local knowledge, negotiation, transactional experience)
  • Personal relationships (emotional IQ and sphere building)

The latter is almost invariably ignored in real estate labor disruption conversations, yet it’s probably the single greatest barrier to disruption. People list with people. Sellers’ top three requirements for a listing agent are reputation, honesty, and trustworthiness.

AI is the intrusive stalker in your phone. Thelma is the amazing woman who comes to book club and walks with you on weekends. H.A.L. 2000 can’t touch her in terms of trust. This should be the overriding theme of every disruption conversation.

On to bottling knowledge

In the future, personalized intelligence might be a different story. If part of the value of exceptional agents comes from what they know from experience, the way they negotiate, and how they interact with clients, how much of that could be learned by an exceptional AI platform?

Could exceptional agents allow themselves to be profiled by their devices and capture that intelligence to monetize it? Would brokers be able to conglomerate the practices and intelligence of their best agents to provide a unique set of processes for their agents and answers for their clients that aren’t available to the general public?

It might not be as crazy as it sounds. Think about the vast amount of information that could be gleaned from one agent over a single year with all of his/her devices in “AI learn mode.” Spoken word, tone, movement, visual cues, timing, location data, digital communication, social engagement, contract negotiation—all of these and more could be processed into a database describing when, where, and how top agents interact with their environments to close more sales transactions.

Who owns the AI?

While the aforementioned could be done on an industry-wide basis to inform brokers as a whole, it might also be led by savvy top producing agents or brokers who would profit from it as a differentiator. Melded with predictive analytics on consumer behavior and market statistics, the right set of personalized intelligence could tell an agent when and where to meet a consumer, and how to begin interacting with that person to provide a greater likelihood of a client and a sale.

Of course, until personality can be direct-ported into the agent’s brain, we still need a human with emotional IQ to show up and close the deal. The creation of a relationship might be initiated by data, but it’s going to be sealed with emotion.

ThelmaRealtor software version 2.5 could be an AI profile that’s sold to brokers or new agents as a foundational of intelligence for their careers. Whether these benefits and profits go to the real Thelma, her brokerage, or the industry depends on who adopts the technology first.

Back to the people

If that’s all a bit too much sci-fi, let’s get back to the basics. There are huge opportunities for the brokerage community to leverage greater technology and AI to improve how they do business. Those that do will have valuable differentiating tools and skills.

Still, Thelma v. 2.5 isn’t going to wipe out the physical agents on the ground. Technologists with armies of software agents will continue to stare at screens, while real life agents are cementing unbreakable relationships with real people. Consumers will work with agents they view as trustworthy, no matter what amazing intelligence is dangled in front of them by H.A.L. 2000 Realty.

It’s true that consumers want more intelligent real estate transactions. Before that, though, they want trust. AI has great prospects for helping brokers and agents improve their business intelligence, but it’s not going to take the human element out of the transaction any time soon. The real Thelma’s role may change, but she still owns the most valuable, subjective, and defensible portion of the real estate transaction: the relationship.

#AIinRE

Sam DeBord is managing broker of Seattle Homes Group with Coldwell Banker Danforth, and 2016 president-elect of Seattle King Country REALTORS®. You can find his team at SeattleHome.com and BellevueHomes.com.

Op/Ed

If ‘likes’ are dead and no longer matter, what does?!

(OPINION / EDITORIAL) Social media likes don’t equal people ‘Like-liking’ you. What should you measure instead?

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likes in social media

What is “like”? Baby, don’t hurt me… but it’s the same as what it “meant” in middle school.

As in, it could mean any number of things, most of which aren’t as deep as you were lead to believe.

A lot of us are still hanging on to a like count translating directly to how many sales we’ll make, or how valuable our presence online is, and news like Instagram shutting down like counts threw people who land between the extremes of gas station flip-flop brands and Nike on the ‘How well are we known, and how much does it matter’ spectrum for a serious loop.

Well, this is where you exit the loop, because the likes are made up and the counts don’t matter.

That’s a bit harsh, let me try that again…the amount of likes you get on something doesn’t matter as much as you think it does.

Take YouTube’s interface for example. You can like a video to show your support, or dislike it because you disagree or think it sucks. Here’s the twist: it doesn’t actually matter how much a video was liked or disliked. YouTube just sees people interacting with the content, and doesn’t discriminate between fame and infamy when it bumps things up the lines for more people to view.

If any given shoe company shared a video of grade-school age kids working on our athletic wear, it’s highly likely that there’d be a lot of comments, a lot of likes, and a wave of dislikes.

Are the likes edgelords agreeing just to ‘own the libs’? Do they like the production values? Do they like the company values? Do those likes belong to repeat customers or not? Are they being liked because the person behind the account gave herself tendonitis being on her phone all day for a solid week, and selecting which playlist to put it in was too painful, so she just added it to her liked videos to save it for later because the Advil is too far away?

You have no idea.

And the same goes for any and every other platform out there. Ergo, strategy, presentations, and investments based on number of likes are all castles built on shifting sand.

I still remember a long form content-style commercial for some…keto…thing? With a witch in it, and she got her revenge body, and…stuff? Slapped a like on it. Did NOT buy that keto stuff. I couldn’t even tell you if it was a drink, powder, bar, or a gym at this point. We’ve come back full circle to the era of people remembering fun commercials, but not moving past that.

So what DOES matter?

Comments: Kind of.

You actually have to read these to see what’s valuable. There’s nothing sadder than having an alert go off with ‘10 new comments!’ but all of them are ‘I made 10k in a week working from my moonbase’ type spam.

Moreover, if all of the comments are negative, you’re doing great as far as eyeballs on all the ads you have supporting your site, but not so great on actually spreading what’s going to get you paid paid.

Shares: Sort of.

Have you ever seen a ‘hate share’? Those shares where your friends put a poor horrifically abused animal on your feed for NO GOOD REASON other than to show how much they hate the person that did it? Your brand content is not immune.

And not everyone’s settings will let you see the spirit in which something was shared. They could be buying. They could be outraged. The important thing here is that you monitor as much as possible, and don’t fall for the ‘no bad publicity’ line. You’re not the late Anna Nicole Smith (…right?). You’re a business owner.

Purchases: Mostly.

This always bothered me back in other places I worked. We’d huddle up, and cheer over an email generating loads of opens and buys—woo, we did it troops, we’re on the way up, and so forth.

The catch was usually that this email was about a giveaway, or a huge sale.

When we used the same formula in titling, formatting, and getting hyped about other emails that offered products at full price? Crickets. And now that you can purchase through new social media integrations, we’re facing the exact same potential for premature e-celebration with old new media.

If no one’s willing to buy your product/service at full price, purchases during sales periods are nothing to get super excited about.

We’ve gone through a lot of caveats here, good job following it all! This is where we get to the positive part.

Follows are something you can reliably keep track of!

It’s confusing since Facebook uses the same verb for inviting a page into your life, and doing whatever with an individual post, and also you can follow without liking, or still like a page but unfollow it, so I’ll call the phenomenon of clicking a button that will put your content into people’s feeds free of charge (somewhat) ‘follows’.

Follows are people saying ‘I need you by me, beside me, to guide me.’

It’s someone being totally willing to let your company be a part of their day. It’s a reliable stop-gap measure between awareness and purchasing! Hate-follows are ‘a thing’, but unless your brand pages are set to follower-only (which…WHY), you’re more likely to know that the folks following you like-like you, and you can adjust your focus accordingly!

This whole article can be summed up as ‘You can’t make quantitative data the only thing you look at.’ Even going by follows, if you have high follows, but low purchases, it’s probable that the people you’re pitching to don’t have the capital you’re actually aiming for. Not to get woo on this, but a human-focused, holistic approach to analyzing your social presence’s performance is your only option for success.

Whether or not you include bells and incense is up to you.

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Op/Ed

Working harder isn’t always financially smarter (there’s a better financial path)

(FINANCE) Getting that pay increase can cause you to spend a little extra money on the things you like, but trying to keep that level of comfort is hard.

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money pile

One summer I was a lifeguard. I earned $2.70 an hour. My first check was around $250. I was so money! I hit Contempo Casuals and I was able to buy an entire outfit and have a few bucks left.

My income was increasing and so was my taste. It’s called lifestyle creep and it happens to hard-working folk when they aren’t paying attention. Workers start out earning minimum wage, get a raise, then move on to a better paying job. Repeat.

As you earn more, you spend more and sometimes your PBR lifestyle is replaced with a craft beer attitude.

Whether you are a broker or have multiple side hustles, working harder to make more money isn’t always the answer, according to finance experts.

As Peter Dunn, aka Pete the Planner explains, the only thing better than a lot of money, is not needing that money.

Lifestyle creep happens when people have more income and they reward themselves, maybe buying a fancier car, buying nicer furniture, dining out at nicer restaurants, taking expensive trips. You get the picture.

But, as The Motley Fool, explains, rather than saving that extra money you are making, you have spent it. Should an emergency happen, or your income takes a dive, you will have a hard time going backward. And, you probably don’t have the income set aside for an emergency situation.

“When your lifestyle creeps up with your income, you’ve just become more and more dependent on your income,” according to Dunn’s blog.

But, you say, wait a minute! I’ve worked hard and I deserve that nice car and those fancy meals and drinks out at the hot spots.

Ok. First, you need to have a budget and, according to experts, save at least 20% of what you earn. As The Motley Fools lays it out, if you can buy the item and still reach your savings target, you are good.

You should also ask: Does the expense improve your life enough to justify the purchase?

How to know if those purchases are worthwhile? Be intentional about what you buy. See something you really want. Write it down, wait 30 days. Still can’t get it out of your head. Buy it. As Money Under 30 suggests, create a fun fund. Have your savings automatically deposited and determine how much can go toward fun each month.

Avoiding the “creep” is important if you are thinking long-term and considering what retirement will look like. If you can stick to your savings goals and manage your spending in the years leading up to retirement, Dunn says, adjusting to a lower income won’t be as challenging.

“Retirement planning is so focused on saving money,” Dunn says in his blog. “Yet, breaking your dependence on your income is a huge part of retirement success.”

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Op/Ed

5 secrets to a more productive morning in the office

(EDITORIAL) Productivity is king in the office, but sometimes distractions and other issues slow you down. So what can you do to limit these factors?

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distractions stop productivity

Regardless of whether you’re a self-proclaimed morning person or not, more efficient mornings can be catalytic in your daily productivity and output. The only question is, do you know how to make the most of your mornings in the office?

5 Tips for Greater Morning Productivity

In economic terms, productivity is a measure of output as it relates to input. Academics often discuss productivity in terms of a one-acre farm’s ability to produce a specific crop yield, or an auto manufacturing plant’s ability to produce a certain number of vehicles over a period of time. But then there’s productivity in our personal lives.

Your own daily productivity can be defined in a variety of ways. But at the end of the day, it’s about getting the desired results with less time and effort on the input side. And as a business professional, one of the best ways to do this is by optimizing your morning in the office.

Here are a few timely suggestions:

  1. Eliminate All Non-Essential Actions

    Spend the next week keeping a log of every single action you take from the moment your eyes open in the morning until you sit down at your desk. It might look something like this:

    • Turn off alarm
    • Scroll through social media on phone
    • Get out of bed
    • Eat breakfast
    • Take shower
    • Brush teeth
    • Walk dog
    • Watch news
    • Browse favorite websites
    • Starbucks drive-thru
    • Arrive at office
    • Small talk with coworkers
    • Sit down at desk

    If you do this over the course of a week, you’ll notice that your behaviors don’t change all that much. There might be some slight deviations, but it’s basically the same pattern.

    Now consider how you can eliminate as many points of friction as possible from your routine. [Note from the Editor: This may be an unpopular opinion, but] For example, can you skip social media time? Can you make coffee at home, rather than drive five minutes out of your way to wait in the Starbucks drive-thru line? Just doing these two things alone could result in an additional 30 minutes of productive time in the office.

  2. Reduce Distractions

    Distractions kill productivity. They’re like rooftop snipers. As soon as they see any sign of productivity, they put it in their crosshairs and pull the trigger.Ask yourself this: What are my biggest distractions and how can I eliminate them?

    Popular distractions include social media, SMS, video games, news websites, and email. And while none of these are evil, they zap focus. At the very least, you should shift them to later in the day.

  3. Set Measurable Goals and Action items

    It’s hard to have a productive morning if you don’t have a clear understanding of what it means to be productive. Make sure you set measurable goals, create actionable to-do lists, and establish definitive measurements of what it looks like to be efficient. However, don’t get so caught up in the end result that you miss out on true productivity.“There’s a big difference between movement and achievement; while to-do lists guarantee that you feel accomplished in completing tasks, they don’t ensure that you move closer to your ultimate goals,” TonyRobbins.com mentions. “There are many ways to increase your productivity; the key is choosing the ones that are right for you and your ultimate goals.”

    In other words, set goals that are actually reflective of productivity. In doing so, you’ll adjust your behavior to come in proper alignment with the results you’re seeking.

  4. Try Vagus Nerve Stimulation

    Sometimes you just need to block out distractions and focus on the ask at hand. There are plenty of ways to shut out interruptions, but makes sure you’re also simultaneously cuing your mind to be productive. Vagus nerve stimulation is one option for doing both.Vagus nerve stimulation, which gently targets the body’s vagus nerve to promote balance and relaxation, while simultaneously enhancing focus and output.
  5. Optimize Your Workspace

    Makes sure your office workspace is conducive to productivity. This means eliminating clutter, optimizing the ergonomics of your desk, reducing distractions, and using “away” settings on apps and devices to suppress notifications during work time.

Make Productivity a Priority

Never take productivity for granted. The world is full of distractions and your willpower is finite. If you “wing it,” you’ll end up spending more time, energy, and effort, all while getting fewer positive results.

Make productivity a priority – especially during the mornings when your mind is fresh and the troubles of the day have yet to be released in full force. Doing so will change the way you operate, function, and feel. It’ll also enhance tangible results, like income, job status, and the accolades that come along with moving up in your career.

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