Real estate agents turn to AI to boost sales
IT managers at some real estate companies are deploying artificial intelligence-based tools designed in part to help agents close deals faster, which could prove useful in the booming housing market today.
While selling and buying homes remains an agent-driven business, IT executives say such tools can increase their efforts, especially in a market with record prices and tight inventory.
“AI can play an important role in simplifying and automating processes where traditionally humans are involved,” said Rizwan Akhtar, director of commercial technology technology at Realogy Holdings Corp., which owns brands of brokerages such as Coldwell Banker, Corcoran and Sotheby’s International Realty.
Artificial intelligence efforts in the real estate industry benefit from advancements in cloud computing and data analytics, as well as improvements to algorithms, according to Realogy’s technology leaders, Compass Inc.
and the Zillow group Inc.
Realogy uses more than 25 AI models, Akhtar said, including models that can help agents predict their odds of converting a potential customer to a paying customer and others that can predict the optimal payout percentage. between a broker and an agent on a property.
The company is in the early stages of testing an AI application that aims to predict when certain milestones will be reached in the home buying process, he said.
At Compass, a real estate brokerage firm, an AI-based tool that predicts whether people in an agent’s contact database are likely to sell their homes within a year has helped their agents win more “lists,” said Joseph Sirosh, the company’s chief technology officer. . In the second half of 2020, the tool’s recommendations led to a “success rate” that was 94% higher than the rate for properties that were not identified as likely to sell, he said. The technology was launched last summer.
Agents directly contact people identified by the tool as likely to sell. Traditionally, agents knock on doors, rely on word of mouth recommendations and make calls to meet with potential clients, Sirosh said. “Agents save time when they’re much more targeted,” he said. The model takes dozens of variables into account to make a prediction, including how often homes are selling in that area, what the last sale price was, and how much the home has appreciated over time, a- he declared.
Realogy offers agents a similar tool.
The coronavirus pandemic has led to an increase in the adoption of AI tools among agents, Sirosh said. At the height of the pandemic, “agents couldn’t work without technology, which meant that everything associated with technology, like AI, which enables efficiency gains, has become incredibly useful,” he said. he declared.
Online real estate company Zillow recently announced that its Zestimate tool, which estimates a home’s market value, is powered by a self-learning neural network that takes into account hundreds of millions of data points. The data ranges from the square footage and unique features of the home to the location and the difference between the property and surrounding homes, said Stan Humphries, chief analytics officer for the company.
A neural network is a branch of artificial intelligence that aims to mimic the way the human brain learns.
AI-based models cannot account for human intuition or empathy, however. Buying and selling a home is a “deeply emotional and very risky transaction,” Humphries said. “Humans will always want another person, an expert, to help them with this process. “
AI can add value to agents over time, but real estate will always be an industry with a strong focus on people, said Mike DelPrete, real estate technology researcher-in-residence at the University of Colorado Boulder. Real estate companies sometimes tout their tech and AI prowess to attract agents, DelPrete said. But the degree to which agents will actually adopt AI and other software tools is uncertain, he added.
“More and more people are talking about AI in real estate as a point of differentiation… but the reality on the ground is that it is more of a marketing slogan,” said Mr. DelPrete. .
Write to Sara Castellanos at [email protected]
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