Seemingly overnight, artificial intelligence is everywhere. Generative AI writing tools promise to write your first best-seller for you, and Callaway’s Paradym AI-assisted Smoke Max Driver will guarantee you a trophy at your next golf tournament. With such lofty promises, expectations are high.
In the real estate sector, generative AI is also making itself known, and applications of AI solutions are aiding the work of agents, brokers, investors, insurers, and lenders. However, there are also areas where AI is not all it’s cracked up to be, fundamentally because any AI solution is only as good as the data that it sources.
This article examines why the value of real estate AI solutions stems from the integration of three things: powerful algorithms, API design, and superb real estate data, and why solutions that lack this critical trifecta fall flat.
The Power of Algorithms
An AI algorithm is a set of instructions or rules that enable machines to learn, analyze data, and perform human-like tasks. These algorithms recognize patterns, understand natural language, and make predictions based on what they learn and understand. Algorithms need quality data to produce quality results. If the data are inaccurate, outdated, or biased, the results or decisions will be tainted. Additionally, like human intelligence, the results from AI algorithms get better over time with the introduction of new data.
AI Algorithm Applications in Real Estate
Powerful algorithms integrated with AI-ready data are enhancing the role of real estate agents, insurers, and lenders by improving the accuracy of valuations and pricing and accomplishing what used to be time-intensive tasks, such as lead generation.
Property Valuation and Pricing
Property valuers used to value a property by searching out comparables in the local market. They would look at recent sales prices of those comparables and manually compare the recent data. AI and its machine-learning algorithms access large volumes of data and can include a wealth of other predictive factors that influence property values. Examples of those factors include property characteristics, neighborhood attributes, renovation histories, price trends, environmental hazards, and economic factors.
All of this means that property valuations sourced from automated valuation models, or AVMs, are far more accurate.
Property Searches
AI tools using algorithms to collect direct and indirect feedback from property buyers, which helps real estate agents conduct personalized property searches and offer their clients targeted property data.
An example of direct feedback is data collected when a potential client fills out a form on a website or indicates preferences. An example of indirect feedback is when a visitor or user shares a property link, clicks on a property or data point, spends a certain amount of time on a page, or compares properties.
AI models that use algorithms can improve their results based on past user behavior and completed transactions. Let’s say you are looking for a new home, an AI tool would provide property recommendations that worked for clients with similar needs and preferences as yours.
Virtual Property Searches give potential buyers virtual tours, saving time for buyers and agents. AI algorithms can personalize virtual tours based on user preferences, showing only the properties with relevant features and amenities that match the buyer’s preferences. In less time than it would take to physically view one property, a client could virtually view ten and narrow down their shortlist.
Automated Outreach and Marketing
AI algorithms have made lead generation and marketing a piece of cake. AI can create targeted lists based on demographics or other client characteristics, and tools like ChatGPT can create marketing materials and emails to send out for lead generation.
AI algorithms help real estate professionals leverage social media to boost their visibility. For example, an agent in the Washington DC area could visit ChatGPT and ask it to create five Facebook posts addressing the local real estate market. An insurance provider in a coastal area of Florida could ask ChatGPT to create a series of LinkedIn posts on climate risk and its effects on property development.
Sophisticated APIs
Application Programming Interfaces (APIs), the second factor in the AI trifecta, are the gateway through which customers meet data. A well-designed interface allows a visitor to easily navigate the services, tools, and options and encourages them to visit again. The best APIs deliver the data and information each user wants to see. They are responsive and informative.
APIs guide the visitor and are responsible for the majority of the initial customer service work for the real estate agent, broker, or service provider. In many ways, chatbots assume much of the legwork required from a broker or agent.
As an example, celebrity real estate agent Fredrik Eklund of the Eklund-Gomes team at Douglas Elliman, known for his role in the Bravo channel’s Million Dollar Listing, recently launched an AI bot called Maya.
“Expert” Chatbots
Maya is an AI real estate “expert” that can create and deliver tailored listing information drawn directly from property photos. Maya also continuously learns by actively engaging with users, and guiding users in their real estate journey, from introducing them to neighborhoods to explaining the basics of real estate.
Maya was built on ChatGPT. She can search condo listings in TriBeCa, New York, and other neighborhoods according to client preferences, explain the difference between a co-op and condo, and provide information on celebrity vacation homes. When users give her a thumbs up or a thumbs down, Maya learns the preferences of the user and delivers information and services according to what she learns.
Maya also collects real-time data through clients, giving Eklund and his company valuable insights into customer behavior and preferences.
Maya manages a majority of the customer relationship efforts as well. According to Eklund, “she’ll remember everything you ever spoke to her about and alert one of our agents that you are talking to her about maybe one of our listings. She can also send you a personalized message tomorrow morning noting that it was nice to speak to you and recap the conversation and maybe send you more properties within your range. It’s a really good lead generator for our firm.”
Maya is often the first point of contact a client has with Eklund’s firm, but she knows when to hand off the client to a human agent. At that point, she has already gathered a lot of information from the client, speeding up the real estate sales process.
Superior Data and Predictive Analytics
Regardless of how charming and approachable your bot is, or how well-put together your marketing materials are, if the information you provide is inaccurate or subpar, your reputation is forever damaged. One of AI’s core competencies is predictive analytics, but accurate predictions on market trends, property values, and demographics have to be based on current quality data.
Mortgage companies base their loan amounts on accurate valuations, property investors consider the financial viability of a development project based on risk assessments, and property valuations, analytics. While Proptech Companies, like ATTOM, rely on data to provide accurate, relevant, and customized solutions for users.
If the data are flawed, an AI solution is no longer an asset but a liability.
ATTOM’s AI-Ready Real-Estate Data Complete the Trifecta
The market is saturated with AI solutions promising to ease the load for real estate professionals, and many do. The best AI solutions combine a sophisticated yet easy-to-navigate API, powerful algorithms, and reliable, current data.
ATTOM’s AI-ready property data won’t be a component of your first novel or your latest golf handicap, but they will enable accurate predictions, classifications, or recommendations regarding your real estate concerns.
Whether you are harvesting property information, transactions, neighborhood data, climate, or environmental risks and hazards, our data is superior in quality, consistent, accessible, and optimized for AI applications. Find out how we’re pioneering solutions to extract meaningful insights, drive informed decisions, and stay ahead in an increasingly data-driven landscape.
Contact a data expert today!
