How Artificial Intelligence is Changing the Real Estate Industry

BY WILLIAM THOMPSON, DIRECTOR OF TECHNOLOGY

Artificial Intelligence is becoming increasingly common, not just in real estate, but in all industries. Despite some critics’ dystopian outlook, I believe AI has amazing potential to change how we live, work, and interact with the world on a scale parallel to the introduction of the computer itself. However, before we go changing the world, it’s essential to understand the potential pitfalls and best practices to ensure we integrate it into our daily lives safely and responsibly. Here’s how AI is being used in the real estate industry today and what it might be capable of in the future.

Let’s start with a real-world example you can use today: Meet ChatGPT, an AI model that can generate human-like text based on a provided prompt. It has taken the world by storm for its easy-to-use playground and conversational interaction style.

• Visit chat.openai.com and sign up for an account.

• When you’re prompted to “Send a message,” use the following prompt: “Write me a listing description for [listing address]. Make it engaging and ask me any clarifying questions you need before you write it.”

• In my case, I was asked if it were a sale or rental, if the address were a single-family home, condo, or something else, and if there were any features or amenities I wanted to highlight.

• After answering these questions, I was provided exactly what I asked for. Here’s an excerpt: “…As you enter the home, you’ll be greeted by a bright and spacious living area that’s perfect for family gatherings or hosting friends. The large windows flood the space with natural light, creating an inviting and cozy atmosphere. The kitchen is a chef’s dream, with plenty of counter space, modern appliances, and beautiful custom cabinetry…” I couldn’t have said it better myself!

While this AI-generated description is a helpful tool, it’s important to note that it’s not a replacement for human interaction or intervention. For instance, when I review the description, it references a “finished basement that’s perfect for a home office or game room” however the property in question doesn’t have a basement. To correct the description, I can either respond to ChatGPT, letting it know of the discrepancy, and it will generate a new description, or update it myself. ChatGPT is not allknowing and while it is trained with publicly available information, it will fill in any holes of knowledge with made-up information, so you’ll need to be sure you’re reviewing its output for accuracy. Nonetheless, it’s a great starting point for a necessary yet tedious task.

Another integration gaining a lot of traction is AI-powered virtual assistance or chatbots. There are chatbot services that can handle frequently asked questions, such as “What are the hours of the open house,” or “How many bedrooms are there,” and they’re getting better day by day, however, most require you to program the answers to questions you expect to receive. You could also use a virtual assistant to help schedule your appointments, letting it take care of the tedious tasks, such as adding to your calendar, inputting details into your CRM, and sending out a confirmation email. Soon we’ll be seeing AI-powered virtual assistants help guide clients through the home buying process, providing personalized recommendations based on property detail analysis, client preferences, and budget, which could be great for the overall client experience. The most significant risk is the potential for bias, which must be mitigated before integrating these services into our business practices. This unintentional discrimination can occur when AI algorithms are trained on biased data sets or incorporate biased assumptions. For example, an AI algorithm might be trained on housing data biased against certain demographics or neighborhoods, which could result in discriminatory outcomes. To avoid these risks, we must use diverse and representative data sets when training AI algorithms and regularly review and audit algorithms for bias.

The last use case I’d like to touch on, and what I would consider the riskiest use of AI in real estate, is photo enhancements and modifications. While manipulating listing photos is not new to the industry, with AI, it’s becoming more accessible than ever to perform advanced photo manipulations with ease. Platforms that allow you to upload a photo and ask AI to make changes are seamlessly making their way into the market, such as “change the sky to dusk” or “remove the car from the driveway.” Taking it a step further, there are services that allow you to stage a space virtually, simply upload your image and select your aesthetic. While these can be excellent tools to ensure you have perfect listing photos, it could also be used to perform more misleading changes such as “add stainless steel appliances to the kitchen” or “replace the carpeting with hardwood floor,” which would output extremely deceptive results and could be considered unethical, see Code of Ethics, Standard of Practice 12-10. While it has become commonplace to add a disclaimer when images have been modified, I highly recommend detailing exactly what has been changed to ensure there is no confusion as to what is reality. AI-powered image manipulation is already coming to market; however, the associated risks can only be mitigated through agent education and mindfulness. We must ask ourselves if a modification or enhancement could mislead a potential buyer in any way; if so, it’s best to leave it be.

AI is already transforming how real estate agents work, and as AI technology continues to evolve, we can expect to see even more innovative applications in the real estate industry, and the wider world, that will further streamline and improve the home buying and selling process for clients and agents alike. NJ Realtors® is hosting a webinar on July 13, 2023 at 10 a.m., Leveraging Generative AI and ChatGPT in Real Estate: Innovative Use Cases and Best Practices, where Dave Conroy, Director of Emerging Technology with the National Association of Realtors®, will be discussing how AI and ChatGPT can be utilized to enhance your business operations, improve customer experience, and drive success in the industry. Register today at njreal.to/ai-in-real-estate