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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.

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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

Why “The Complete Guide to Not Giving a F**k” is Bulls**t

(EDITORIAL) Having thick skin is great, but a famous blog, “The Complete Guide to Not Giving a F***” misses the point that for most, it’s a carefully choreographed marketing tactic, and a luxury.

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complete guide to not giving af

Warning: cuss words ahead…

One of my favorite pieces ever penned on the web is called The Complete Guide to Not Giving a Fuck by Julien Smith, first published on his personal blog and recently republished on Medium. The piece is well written and argues a point that is so rarely argued effectively – constant worrying about what others think is a prison and you should regain your self-respect by putting less emphasis on every single person in the world’s opinion.

The theory is well founded and is totally true, but the Guide has been shared for years on the web as an excuse to be an asshole, so I’m calling bullshit on the entire Guide. Not on Smith’s words (they’re right and I have emailed them to over 50 people over the years), but on how non-readers are taking it. People skim the story, share it, tag me because I like cuss words and have thick skin, and move on, thinking that Smith meant to tell everyone that they should never care what others think.

First of all, if you’re here, you’re most likely a business professional, right? If so, you typically can’t just puff your chest in this world and act like a dick. Sure, there are people that have made lucrative careers out of being hated, but they work very hard to appeal to other haters and attract like minds, which isn’t exactly not giving a fuck about what others think – that’s the dirty secret of today’s villains, particularly online.

Smith’s point was that developing a thick skin is freeing. And he’s right. But, it’s a process that takes time, and must be carefully choreographed. Constantly lobbing grenades because you’re now a badass who doesn’t care what others think is self-destructive and misses the point.

There is a substantial difference between “not giving a fuck” and letting irrelevant commentary and judgment roll off of your back. Guess what? Not all commentary is irrelevant. Your boss tells you that you suck at something? Better not give her the middle finger or you’re unemployed. A client calls and you’re hostile with them because you don’t have to take their shit? Bye bye, customer.

A now unemployed former Sprint kiosk sales guy comments on your blog that you’re wrong and stupid? Sure, let that roll off of your back. But not the rest. Don’t “not give a fuck” for the sake of not giving a fuck. Don’t be a moron.

Here’s the part where I disagree…

So far, I’ve agreed with Smith, but over the years, and particularly since his editorial was republished, I’ve put a lot of personal thought into why the piece rubs me the wrong way, and I’ve finally figured it out.

I have thick skin. For the most part, people like me. I don’t know why, but people like me – I’m told often that I’m likeable. That’s cool.

I am also well respected in my industry and by my peers. Also cool.

Therefore, my not giving a fuck is a luxury. I’ve already built a personal brand and helped build extremely large communities online and off, so I get to have thick skin because I somehow magically earned it. If some kid signs up for a Twitter account and starts throwing grenades, they’re blown off as a punk turd. If I take to my own airwaves to attack an idea, people listen because I’ve earned an audience. Do you see the difference?

“I get asked a lot how I developed such a thick skin, and the truth is that it took many years and a natural maturation process to realize that not everyone will adore me, and that I can be wrong. A lot.”

I was able to develop a thick skin because I had collected a huge army of supporters over time should I need it, and so I am not often attacked (but when I am, guess what happens??). Let’s be honest, I also have the advantage of being a younger woman, so I get to be a little more brash than my counterparts, and people like that – but that isn’t me not giving a fuck, that’s me being silly for the most part.

I disagree with Smith on his guide, because some people don’t have the luxury of not giving a fuck. It is freeing and something everyone should try, but it does not apply to all situations at all times, and the bizarre truth is that it has to be earned in most situations.

This editorial originally appeared on The American Genius.

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Op/Ed

The rest of the world has caught up to the Realtor way of working constantly

(EDITORIAL) How do you respond to people that complain they’re working at all hours? Just welcome them to the Realtor way of life!

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Until you practice real estate, you have no idea how many hours per week that entails, how insanely late or early clients will call with urgent needs, how much you live in your car, and how novel the memories of a 9-5 are.

From the outside, it looks like you can do anything you want when you want, and yes, you have flexibility, but successful agents are seriously devoted to working their tails off. Many sacrifices are made, meals missed, and the idea of a non-working vacation is not usually a reality for practitioners (even when there is an assistant and/or team at play, there’s always something only you can answer).

You’ve changed a shower head in your client’s listing to appease a picky buyer and get the dang closing done, you’ve kept your promise to attend every closing (even on your wedding day (true story, my husband did that secretly)).

The internet has only changed the process, not the number of hours worked.

Technology has made Realtors more efficient, but as a population, you’ve just added more to your plate and worked even harder.

With the advent of smartphones and wifi, other industries have now adopted the same always on pace and mentality, and it occurred to me recently that the entire workforce has now adopted the Realtor method of working all day and figuratively all night.

“So to the rest of the world, I say, welcome to the club!”

Veteran Realtors can tell you that the pace can be grueling, but that the concept of work/life balance isn’t some new wave buzzword-filled theory, no, it’s been the Realtor way for decades upon decades.

So when people complain on Facebook about their boss calling them for some arbitrary reason at 10pm, or complain on Twitter that a customer expected an instant response at 1am, just tell them gently, “Welcome to the Realtor way of life!” because you’ve been adapted since the day your license number was issued!

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Op/Ed

Less sleep, less life. Science says so

(OPINION EDITORIAL) Sleep can be a great thing. In fact, a new study has proven that the more you get the longer your life will be — that’s pretty neat!

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sleep

Entrepreneurs, business owners, and freelancers, listen up: sleep is important and you need more of it.

We all know how important sleep is, but we try to ignore it anyway. New research from neurologist Matthew Walker states quite plainly that if you get less than seven hours at night you put yourself at higher risk for Alzheimer’s, dementia, heart attacks, strokes, and several different kinds of cancers. If seven hours feels indulgent, read on.

Walker, a sleep scientist at the University of California, has just written a new book entitled Why We Sleep in which he discusses the biological mechanisms of the processes that allow you to drift off.

Walker also discusses all of the things that our constantly busy and interconnected lives do to disrupt that process.

“First, we electrified the night,” Walker said in a quote to The Guardian. “Light is a profound degrader of our sleep. Second, there is the issue of work: not only the porous borders between when you start and finish, but longer commute times, too. No one wants to give up time with their family or entertainment, so they give up sleep instead.”

Another thing killing our restfulness at night? Our attitudes towards catching z’s.

Walker said that there is a strange increasing stigma around sleep, and that many consider it “lazy and shameful.”

Considering that so many problems arise from lack of sleep such as impaired functioning, amplified risk of diseases, weight gain, and mental health issues, a more appropriate attitude toward this necessity needs to be taken.

Entrepreneurs and business owners may have a hard time cutting themselves slack whenever choosing their bedtime, but in order to continue to operate at peak efficiency, bedtime must be a priority.

Here are some easy tips from sleep scientists to incorporate in your bedtime routine. First: no all nighters. They totally wreck your ability to function, and make you as cognitively impaired a drunk person.

Secondly, try to set a bedtime alarm every night so you can train your body to have an appropriate slumber pattern, which will help your ease of sleeping in the long run. Another easy tip being super strict about the “no screens” rule before bed, as the light emitted from our devices blocks melatonin (the sleep hormone) from secreting in the brain.

It may be hard to leave that email to another day, but your brain will thank you for it as you drift off to dreamland.

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