{"id":7508,"date":"2018-10-02T08:57:09","date_gmt":"2018-10-02T13:57:09","guid":{"rendered":"https:\/\/therealdaily.com\/?p=7508"},"modified":"2018-10-02T11:42:18","modified_gmt":"2018-10-02T16:42:18","slug":"artificial-intelligence-ai-real-estate-negating-monetizing-agents-experience","status":"publish","type":"post","link":"https:\/\/theamericangenius.com\/housing\/editorials\/artificial-intelligence-ai-real-estate-negating-monetizing-agents-experience\/","title":{"rendered":"Artificial Intelligence (AI) in real estate: Negating or monetizing an agent’s experience?"},"content":{"rendered":"

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

You read the entire terms of service when you downloaded that app, right? So you remember agreeing to every bit of your phone\u2019s hardware and software recording and interpreting the signals that your everyday actions are creating (just nod your head yes\u2014it\u2019s<\/em> watching you right now).<\/p>\n

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.<\/p><\/blockquote>\n

We\u2019re seeing huge advances in the affordability of AI software that match the exponential growth of hardware\u2019s computing power.<\/p>\n

<\/i> Read also: Middlemen cut out by the internet, but not real estate<\/a><\/strong><\/div>\n

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\nSimultaneously, 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\u2019s 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.<\/p>\n

How AI intersects with RE<\/h2>\n

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<\/a> that viewed \u201ccognitive computing\u201d not as a threat to labor, but an asset to the baseline of real estate\u2019s agent intelligence:<\/p>\n

\u201cSo here\u2019s 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?\u201d<\/p><\/blockquote>\n

Further, Cofano states, \u201cCognitive 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.\u201d<\/p>\n

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.<\/p>\n

Not surprisingly, a different take came from Rob Hahn<\/a>, focused on the costs of repetitive labor and the likely evolution:<\/p>\n

\u201cThe $6 billion question is where real estate brokerage services fit in the spectrum of services if we put McDonald\u2019s 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.<\/p>\n

I think most of my readers know the answer. Real estate is far, far closer to McDonald\u2019s\u00a0than it is to\u00a0McDonnell-Douglas.<\/p>\n

\u2026rote 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?<\/p>\n

Answer: it won\u2019t.<\/p>\n

Those real estate agents who survive will have to be ‘upskilled’ and focus on niche areas or ‘be equipped to handle smart systems.'”<\/em><\/p>\n

Comparing two views on AI<\/h2>\n

So we have two very different views of software intelligence\u2019s effect on real estate agents. In one, brokers might adopt cognitive computing measures to improve agents\u2019 core capabilities to serve consumers. They improve and survive as a unified group of forward-thinking adopters.<\/p>\n

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\u2019s done.<\/p>\n

It would be remiss of me to gloss over the McDonald\u2019s analogy. The skills that allow agents to survive in their occupation can\u2019t 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.<\/p>\n

In recent real estate history, replacing a repetitive procedure in the sales process with software has simply changed the sales process. It hasn\u2019t removed the sales person. There are graveyards full of real estate labor would-be disruptors who have a poignant understanding of that history.<\/p><\/blockquote>\n

\"artificial-intelligence-REAL-ESTATE\"<\/p>\n

The intrinsic skills that keep real estate agents strongly entrenched in the industry seem to center on two things:<\/p>\n

    \n
  • Personalized intelligence (unique local knowledge, negotiation, transactional experience)<\/li>\n
  • Personal relationships (emotional IQ and sphere building)<\/li>\n<\/ul>\n

    The latter is almost invariably ignored in real estate labor disruption conversations, yet it\u2019s probably the single greatest barrier to disruption. People list with people. Sellers\u2019 top three requirements for a listing agent are reputation, honesty, and trustworthiness.<\/p>\n

    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\u2019t touch her in terms of trust. This should be the overriding theme of every disruption conversation<\/em>.<\/p>\n

    On to bottling knowledge<\/h2>\n

    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?<\/p>\n

    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\u2019t available to the general public?<\/p>\n

    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 \u201cAI learn mode.\u201d Spoken word, tone, movement, visual cues, timing, location data, digital communication, social engagement, contract negotiation\u2014all 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.<\/p>\n

    Who owns the AI?<\/h2>\n

    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.<\/p>\n

    Of course, until personality can be direct-ported into the agent\u2019s 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\u2019s going to be sealed with emotion.<\/p>\n

    ThelmaRealtor software version 2.5 could be an AI profile that\u2019s 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.<\/p><\/blockquote>\n

    Back to the people<\/h2>\n

    If that\u2019s all a bit too much sci-fi, let\u2019s 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.<\/p>\n

    Still, Thelma v. 2.5 isn\u2019t 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.<\/p>\n

    It\u2019s 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\u2019s not going to take the human element out of the transaction any time soon. The real Thelma\u2019s role may change<\/em>, but she still owns the most valuable, subjective, and defensible portion of the real estate transaction: the relationship.<\/p>\n

    #AIinRE<\/h3>\n","protected":false},"excerpt":{"rendered":"

    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.<\/p>\n","protected":false},"author":337393,"featured_media":7519,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"wds_primary_category":0,"footnotes":"","jetpack_post_was_ever_published":false,"_links_to":"","_links_to_target":""},"categories":[254],"tags":[928,1234,455],"class_list":["post-7508","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-editorials","tag-artificial-intelligence","tag-real-estate-news","tag-tech"],"jetpack_featured_media_url":"https:\/\/theamericangenius.com\/housing\/wp-content\/uploads\/sites\/2\/2016\/04\/artificial-intelligence.jpg","jetpack_sharing_enabled":true,"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/theamericangenius.com\/housing\/wp-json\/wp\/v2\/posts\/7508","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/theamericangenius.com\/housing\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/theamericangenius.com\/housing\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/theamericangenius.com\/housing\/wp-json\/wp\/v2\/users\/337393"}],"replies":[{"embeddable":true,"href":"https:\/\/theamericangenius.com\/housing\/wp-json\/wp\/v2\/comments?post=7508"}],"version-history":[{"count":3,"href":"https:\/\/theamericangenius.com\/housing\/wp-json\/wp\/v2\/posts\/7508\/revisions"}],"predecessor-version":[{"id":7520,"href":"https:\/\/theamericangenius.com\/housing\/wp-json\/wp\/v2\/posts\/7508\/revisions\/7520"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/theamericangenius.com\/housing\/wp-json\/wp\/v2\/media\/7519"}],"wp:attachment":[{"href":"https:\/\/theamericangenius.com\/housing\/wp-json\/wp\/v2\/media?parent=7508"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/theamericangenius.com\/housing\/wp-json\/wp\/v2\/categories?post=7508"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/theamericangenius.com\/housing\/wp-json\/wp\/v2\/tags?post=7508"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}