It should come as no surprise to anyone who has bought or sold (or even dreamed about) a home in the past few years that technology plays an ever increasing role in the industry. From the initial online search, to the contract, to the closing, technology touches every aspect of the real estate transaction. Some have feared that this reliance on technology could supplant the need for real estate professionals, but the exact opposite is true – home buyers and sellers are utilizing the skills and guidance from real estate professionals at record levels. Instead of replacing real estate professionals, technology has enabled them to be more efficient and proficient at their job and service customers at an even higher level.
One area that receives a great deal of attention in the technology space is artificial intelligence, or AI. The explosive growth of computing power combined with innovation has spawned a new age in the technology revolution with the birth and proliferation of AI in almost every aspect of our lives. Real estate is no exception, with companies committing significant resources to implement AI technology to improve both the productivity of the real estate professional and to improve the overall experience of the customer.
One of these innovative companies, Re/Max, recently made huge commitments in the AI space. Two strategic acquisitions in the past 18 months have positioned Re/Max and its worldwide network of real estate professionals at the forefront of the real estate industry’s adoption and implementation of AI. The first acquisition was of a technology company called First.Io, based in North Carolina, which utilizes AI to identify which customers in a Re/Max agent’s sphere of influence are most likely to list their homes in the next 12 months. A more recent acquisition is a local data intelligence company called the Gadberry Group – a company with information on over 200 million properties in the United States. This combination of innovative technology coupled with a wealth of data is already yielding impressive results.
Here is an interesting statistic – a little over seven years ago, there were 4.5 million real estate leads created from internet searches. Compare that to last year where over 100 million real estate leads were generated, yet only five to six million homes close in a typical year. Common sense dictates that a large portion of online leads are not serious buyers in the market. This is where AI provides an advantage for real estate professionals to declutter and sift through the data to determine which leads are more likely to translate into active buyers and sellers.
The previously mentioned First.Io app is a great example of AI at work. The app first aggregates data from an agent’s existing database, their email contacts and their cellphone contacts, then uses publicly available information to fill in missing pieces of information in the database (updated property addresses, birthdays, etc). Now the agent has a more comprehensive database consisting of contacts that are not total strangers to the agent. Then the AI kicks in by analyzing those contacts against over 700 different data points that are publicly available. Information such as how much equity does a person have in their home, how many years have they lived in the home, did they just have a child or perhaps have children go off to college. The proprietary algorithm created by First.Io then serves up to the agent a curated list of potential sellers that are more likely than the rest of those in their database to list their home in the next 12 months. This is valuable to an agent to identify who to market their expertise to assist with the potential home sale.
Obviously, the benefits of AI have their limitations but it is hard to argue that they don’t provide some benefit whether in real estate or any other industry. This is a trend that will only grow and get stronger. Will the real estate industry embrace it? It already has.
Peter Crowley is the president of Re/Max Alliance Group.
This article originally appeared on Sarasota Herald-Tribune: Home Front: Artificial intelligence entering the real estate landscape