AI for Real Estate - The Power of AI in Property Transactions

What is Real Estate AI?

Real Estate Artificial Intelligence (REAI) is a term that characterizes the use of artificial intelligence for the real estate industry's use cases.

Artificial Intelligence (AI) is the ability of a computer or machine to perform tasks that would normally require human intelligence to complete. These tasks include things like recognizing speech, understanding natural language, and making decisions based on data. AI is becoming increasingly important in the business world as companies look for ways to automate processes and gain insights from large amounts of data.

What are generative and non-generative AI? Can both be applied to the Real Estate Industry?

Both generative and non-generative AI have applications in the real estate industry.

Non-generative AI refers to software algorithms that are able to learn and become better at carrying out one specific task as they are exposed to more data. The most common applications of non-generative AI include classification, forecasting, scoring, computer vision, and anomaly detection.

Generative AI simulates every aspect of natural human intelligence. Generative AI can create new content or output after being trained on input data. The functions it performs range from text generation to summarization, answering questions in a natural way, speech-to-text, text-to-image, text-to-video and etc. What defines the new wave of generative AI is that the number of large models and the quality of the output have substantially increased unblocking non-existing capabilities to date.

ChatGPT's success, and the release of many other foundational natural language processing models and AI transformers, have led, with its hype and omnipresence in the news, many companies embracing AI and making it a top trend in the product development world at the moment.

The leading role of AI in real estate had been focused in the last years on non-generative AI algorithms such as property automated valuation models, market value prediction, search personalization, square footage pricing, lead scoring, and other predictive analytics. The exception was customer service chatbots and a limited set of virtual assistants.

The relevance has moved now into generative AI and AI-generated content.

What will be the impact of AI on Real Estate in the coming years?

The productivity impact of generative AI in the real estate industry can reach $110-180 Billions annually within the next years for a total revenue increase of the industry of 1.0 to 1.7% according to Mckinsey's report "The economic potential of generative AI: The next productivity frontier".

Real Estate is not a single case but part of a global trend cross-industry. According to the PwC’s Global Artificial Intelligence Study, AI will lead to an estimated $15.7 trillion or 26% increase in global GDP by 2030. The greatest gains from AI are likely to be in the US with a potential of 14% boost. In Germany Artificial Intelligence (AI) on the rise will lead to 11.3 percent growth by 2030.

The major gains of AI in real estate will take place in marketing and sales, customer operations, risk management, and legal use cases. If you want to know more about generative AI for Real Estate, read our blog post here.

It’s important to understand that AI is not a magic bullet that will solve all your problems overnight. It requires careful planning and implementation to be effective. However, if used correctly, AI can be a powerful tool for businesses of all sizes.

How to use AI in Real Estate? Which problems can we solve with AI?

Companies and professionals can use AI in real estate to solve some of their biggest pains and achieve impressive productivity increases and cost savings. Among the main use cases that will be solved in more effective ways with an application of AI in real estate, these stand out :

• Writing engaging property listings (Exposés)
• Automation and personalization of customer communications including emails, SMSs, social media posts, and more
• Creation of promotional videos, images, and virtual tours
• Customer support
• Process Automation, such as automated appointment management
• Lead generation
• Lead scoring for potential buyers, tenants, and owners
• Research and Analysis of the real estate market
• Demand Prediction
• Strategy and Decision Making
• Identifying Market Trends
• Property online searches and search criteria automation
• Suggestion Engines
• Property Value and pricing
• Transaction Coordination

We discuss some of those topics in the next paragraphs. Others were also discussed in our blog post "Virtual Assistant for Real Estate".

What are the best tools available for Real Estate AI?

Waipify.com is the leader in Real Estate AI technology. Not only because it is the AI powered software (B2B SaaS) that offers specialized tools for the real estate industry, but also because the quality of the AI-generated outcomes is outstanding. Waipify is a no-code, low-code platform. That means you can use it to achieve major productivity gains and cost savings without the need to invest in development.

wAIpify has artificial intelligence generation solutions for many of the real estate problems that we have mentioned above. To sign up for the current available AI tools, start a free trial here.

The king in terms of AI content generation within the last months has been chatGPT, because of its constant presence in the news. As mentioned in the generative AI article, chatGPT is a broad tool that can be used almost for every text generation purpose. chatGPT is not specific to real estate. Its outcomes save time and effort for real estate teams but much less than wAIpify's generators.

Many other large language models and conversational AI platforms have proliferated in the last months that claim to be better than chatGPT such as Claude, Google's Bard, or Llama 2 from Meta. While it's worth it to try them, the truth is that they address mainly generic purposes and the level of problem-solving for the real estate industry depends highly on your abilities to extract the best outcomes from the models.

How to use AI to write a high quality and engaging property listing?

The real estate agent or broker who is handling the sale or rental of the property prepares the property listing and publishes it on his business website and on the main real estate classifieds platforms.

An exposé or property listing is a detailed description of a property that is being sold or rented. A detailed description of the property includes information about the property’s location, size, condition, features, price and etc. The exposé is used to market the property to potential buyers or renters and to provide them with all the information they need to make an informed decision.

Therefore the property listing is made of many different elements: the property images and media, the contact details, the object description, the location description, the cost estimates, the energy certificates and consumption, the price and etc.

Of those elements, the one that is more often mentioned by different marketing text creation AI providers is the object description.

Generative artificial intelligence enables text creation. Some of the large language models in the market will enable the creation of the object description. Those models already allow the creation of texts by writing an accurate prompt and including most of the information and data points about the property in the prompt. The output generated will already do a good job to increase productivity and quality to a certain degree. However, that outcome is still generic, misses attributes, lacks the depth necessary to be published right away, and requires an additional editing effort.

wAIpify is the leader in specialized AI generation tools for real estate. It is the only platform that has complete solutions for property listings including those for residential real estate and commercial properties. To experience the platform sign up here.

How to use AI in strategy and decision making for your Real Estate Business?

There are several ways to use artificial intelligence for real estate companies to support your strategy and decision-making:

• Using AI chatbots such as Google's Bard, Bing chat, or chatGPT to help you with your research,
• Asking them to support you with new ways of analyzing the real estate market's historic data,
• Generating custom visualizations from public data and privately uploaded files
• Supporting automated or partially automated writing and updating of strategy narratives
• Recognizing relationships and patterns in large data sets, resulting in sound data-supported decisions and valuable insights that can drive action

Virtual Assistants for the Real Estate Industry

In this article on the blog, we already covered the topic of virtual assistants for the real estate industry.

Virtual assistants are AI-powered programs, that can recognize human speech, understand intent, and provide personalized responses in a human-like voice. They can also be AI-powered chatbots that interact with text instead of human speech. Chatbots generally use text-based chat as opposed to voice-activated conversation.

In the article, we highlighted a few of the main use cases where virtual assistants will play a major role in the real estate industry now and in the future. Some of these virtual assistants are already in our roadmap:

• Conversational AI real estate listing
• Transaction Coordinator
• Personalized communication chatbot
• Property recommendations tailored to users
• Strategy and research genius

How can AI be used to enhance Real Estate marketing and advertising efforts?

There are several ways AI will enhance real estate marketing and advertising efforts:

With wAIpify exclusive AI generators and the future browser extension, a real estate agency has at its fingertips the most powerful real estate virtual assistant for different tasks: writing high-quality real estate listings and descriptions, enhancing images, creating listing presentations and promotional videos, and 360° tours, and managing the real estate marketing of the managed properties. The increase in productivity that those AI generators and real estate virtual assistants, enable for real estate professionals is unmatched by any other solution in the market.

wAIpify focuses on conversions to help real estate agents increase their number of real estate transactions per employee. That means all the generative AI provided to real estate professionals is hyper-customized and focused on enhancing agents' specialized skills. You can try wAIpify for free by signing up for a trial here.

Among the capabilities that real estate professionals can utilize on the wAIpify platform are those addressing the creation of custom marketing materials to promote properties and real estate business. For example, real estate agents can create social media posts for Facebook, Twitter, and Instagram, or generate Google Ads descriptions in just a few clicks. The posts will make use of the property listing information to create an engaging summary where the tone of voice can be modified in order to meet the intended target audience. The resulting text message can be translated to different languages right away enabling quick and effective real estate marketing addressing different countries and markets.

How can AI be used to improve customer engagement?

One of the big failures that seller clients from a real estate business report when canceling their existing contracts is the lack of interest, improper promotion of the property, and especially the absence of visibility of what is going on with their property's selling process.

It's not that the agents have no interest to sell their house. The problem is time management. Many agents do not have enough time to handle at the same time a large number of transactions and also to communicate continuously and empathically with the owners. This results in unsatisfied owners who end the contract at the first opportunity. The impact on the business reputation is high and translates into the loss of future clients.

In the case of buyers and tenants, the problem is the lack of response due to the large number of messages from interested prospects. Real estate agents are often offering their properties in several classified platforms. The management of a large number of inquiries is cumbersome and ends with many high-quality prospects not receiving a response.

For tenants, the reality is not too different. Just repairing a small flaw takes an infinite exchange of emails and several phone calls. The property manager contacts the third-party provider and tries to set an appointment that matches both the professional calendar and the tenant calendar. The whole process is tremendously inefficient.

A virtual assistant for process management implies communication automation at each step of this process.

How to use Lead Scoring with AI to boost your Real Estate business

When it comes to the use of non-generative AI for Real Estate, it has been common to use Machine Learning algorithms for lead-scoring purposes. Lead Scoring analyzes numerous data points such as property characteristics, demand for properties, online behavior, property preferences, and engagement of the prospect with marketing materials, to assign a score to each prospect.

Why is lead scoring important? Not all potential leads have the same value for our company. A property owner of a property in a low-demand area with suboptimal features, may not be a gain but a liability. A seller with low intent of selling that becomes an obstacle to the transaction is equally unpredictable. It's not only about the high cost of selling the property for the business but also the opportunity loss of keeping teams busy with a property that will not convert any time soon.

The same goes for buyers. The limited amount of timeslots and time availability of agents to visit a property need to be assigned to those buyers or renters with the highest probability of acquiring or leasing the property. Otherwise, it will increase the number of visits needed to sell the property and will lower profitability.

Lead scoring can be a great tool to prioritize new leads, and sellers, based on the probability to sell or rent their properties, and buyers based on their qualifications.

It's like seeing the future with a Palantír. Once the lead has contacted you, you can know its probability of conversion with some level of certainty. That probability evolves as new data points and information from user behavior enter the system. It can be used to prioritize leads to focus on at each step of the process and to segment them for a custom team and system interaction.

How can AI be used to generate property recommendations tailored to users?

A lot has been written about this topic and many different non-generative AI tools are already available in the market. The lead scoring that uses predictive analytics to prioritize and segment audiences can also be used to segment your audience and provide personalized recommendations based on their past customer experience, search terms, and visited properties, online and offline.

How can AI be used to analyze future market trends and competitors?

AI can be used to analyze future market trends and competitors in many ways. Some examples are:

• AI predicts future market trends by analyzing past data and identifying patterns that might indicate future trends. It will help a real estate business to anticipate market changes and adjust strategies accordingly
• AI can be used to monitor competitors’ activities and identify potential threats or opportunities
• AI can be used to analyze customer behavior and preferences to identify new market opportunities
• AI can be used to generate insights from unstructured data such as customer reviews, Net Promoter Score comments, or social media posts and help identify patterns not so obvious to a human analyst.

How can AI be used to predict property prices, future value, and analyze data points?

AI can also be used to predict the future value of a property. This is done by analyzing factors such as the property's location, surrounding neighborhood, the existence of other real estate professionals and local offers, and economic developments. By understanding how these factors are likely to change over time, AI can generate a more accurate estimate of a property's future value.

The prediction of the evolution of interest rates, inflation, demographics, and associated living demand or the cost of energy, so present in our daily lives, linked to own property characteristics will help predict future selling, renting prices, plots value, and the calculation of the right real estate development costs. The number of data points involved and the uncertainty of events make it more necessary than ever to use AI tools that can design alternative scenarios.

AI-powered models are being used to predict property prices in cities around the world. For example, Zillow's Zestimate model is used to estimate the value of millions of homes in the United States.

What are the potential risks of using AI in Real Estate?

The most important risks of using AI in real estate are:

• Misuse of personal data - passing personal data such as name, address, and contact details to models such as GPT that will make use of them internally to improve the capacities of their own algorithms. For that reason, GPT was banned in Italy.
• Hallucination. Publishing low-quality inexact results that impact reputation negatively. Excess of confidence in the quality of results of larger and more popular artificial intelligence models. Some of these models are very accurate in performing specific tasks but not so much in other tasks. If we don't check their outcomes, hallucination terms can permeate published content.
• Plagiarism.
• Loss of own style and communication distinctive features. Many companies are already leaders in their markets. Their customers love to engage with them due to their communication style. Using artificial intelligence just for the sake of it does not look like a smart decision. Their goal must be to recognize patterns and styles and increase productivity, not to lose their leadership position.
• Negative impact on customer engagement.

Will Real Estate Professionals Be Replaced by AI?

Some real estate tasks will be automated and no human intervention will be needed. Other new tasks will emerge.

AI will dramatically augment real estate agents' productivity. Also, it will enable them to put more emphasis on the emotional support of their customers through personalized communication and 1-to-1 interaction.

On the other hand, the increased transformation of the real estate transaction from purely in-person to hybrid or completely online format will shorten processes removing certain tasks today performed by human agents. Some of the previously essential tasks will become redundant which may impact the distribution of functions within real estate companies.

It looks clear that especially on the side of seller lead generation and seller customer engagement throughout the transaction process, managing the emotional component of selling a property for some customer segments, will not disappear any time soon. AI is not yet ready to get to that level of engagement and sellers still want to see a real person taking care of their problem, which might be one of the most important transactions in their lives.

‍

‍