In the first part of my “Disrupt or Be Disrupted” series here at REALTOR® Magazine, I introduced innovations such as robotics, sensors, synthetic biology, and 3-D printing and how real estate pros can profit from them. Most often these technologies are quite abstract for people outside of scientific fields. The resulting unawareness, ignorance, or half-knowledge creates grave headlines, sometimes depicting a “Blade Runner”–style dystopia.
But as the founder of the Future Real Estate Institute, I take a different approach. I choose constructivism over fear and research over ignorance. That’s why in this second part of the series, I’ll show you both sides of artificial intelligence and how you might profit from it.
Artificial intelligence is commonly defined as a programmatic system mimicking or transcending human intelligence. While artificial intelligence could also be developed by means of genetic engineering, I want to focus on the programmatic approach. I see a huge vacuum of applications of artificial intelligence in real estate, which creates an opportunity for disruptive business cases.
Artificial Intelligence: Not The End
There’s a lot of trepidation when it comes to this topic, and not just in real estate. In the United Kingdom alone, more than 30,000 jobs in the legal sector have been made redundant by artificial intelligence applications in the last few years, which is a great example of the magnitude of the disruptive force this technology could have upon future job markets. This is one reason for the negative perception of artificial intelligence. Another is simply the fear of the unknown. We cannot really forecast what will happen when we develop more powerful applications that might not be controllable by humans.
Since artificial intelligence can optimize many business processes, assist in research, and automate repetitive tasks, it is economically attractive for governments, institutions, and corporate entities to develop such technology. That’s why it’s vital for brokerages to get in on the game and to develop their own artificial intelligence tools, so they can adapt and create new jobs in order to continue to profit.
Business Opportunities Thanks to the Status Quo Vacuum
There are dominant players in most business sectors, including real estate. Yet, with emerging technologies like artificial intelligence, new players can challenge them. This state is what I call a “status quo vacuum.”
What if you created the startup that finally developed the perfect matching algorithm for clients or the best way to aggregate listing data? Here are some ideas of how innovators in real estate could use AI to change the way business is done.
Seller and Buyer Matching
There are already various platforms offering matchmaking algorithms to pair buyers and sellers. Yet, the models lack holistic data aggregation, learning functions, and adequate parameters. We will see eventually a platform combining it all, making the home search process easier, smoother, and more efficient.
Legal Research and Financial Due Diligence
Companies like Leverton are already using artificial intelligence in semantic language processing, which can read through complex legal contracts and work through financial data, to smooth transactions. This is just the beginning. In the future we will see rapid text and voice data analysis, which can improve market research, competitor monitoring, sentiment analysis, and customer service. Such services may eventually allow real estate transactions to happen faster and at lower costs.
Personalization and AI-Powered Marketing
Knowing when and how to get in touch with past and potential clients is a constant struggle for real estate agents. What if you could develop a tool that would help you target customers, figure out the best way to reach them, and evaluate how likely a completed sale might be? Artificial intelligence may soon offer a system for aggregating data from social media, the MLS, local news outlets, and other open source data in order to predict which customer should be addressed, when, and how.
Highly Skilled, Personal Brokerages
Most widespread technological innovations suffer from a market backlash at some point. For example, with high-volume mass production of industrial goods, we’ve seen a resurgence in interest in handcrafted, artisan products from customers who want to consume differently. The same might happen regarding highly automated and digitized brokerages. Some consumers might always prefer the personal component and would be willing to pay a markup for the best human service possible, which could create a high-end market for personalized, customer-centric brokerages.
The fear of disruptive innovations can often be traced back to the fear of the unknown and the fear of unemployment. And that fear may not be unwarranted; technological innovations often create seismic shifts in society as well as business. Just think about how the steam engine, conveyor belts, nuclear power, and the internet have changed our world and even destroyed jobs. But in the end, we prospered. This is a very good analogy for the shifts that are ahead of us, induced by the disruptive forces described in this series.
That’s also the reason it is of great importance to start brainstorming about how you can use these disruptions to your advantage, instead of being surprised—and potentially made redundant—by innovative competitors. While artificial intelligence may make many professionals redundant, it will also create new business cases that savvy innovators can take advantage of.