It should come as no surprise to anyone who has bought or sold (or even dreamed of) a home in the past few years that technology is becoming an increasingly important role in the industry. From the first online search to the contract and closing, the technology touches every aspect of the real estate transaction. Some have feared that this reliance on technology could replace the need for real estate professionals, but the opposite is true – home buyers and sellers are leveraging the skills and guidance of real estate professionals at record levels. Instead of replacing real estate professionals, technology has enabled them to do their jobs more efficiently and competently, and to serve clients at an even higher level.
One area that is getting a lot of attention in technology is artificial intelligence, or AI. The explosive growth in computing power combined with innovation has ushered in a new age in the technology revolution with the birth and diffusion of AI in almost every aspect of our lives. Real estate is no exception as companies devote significant resources to implementing AI technology to improve both the real estate professional’s productivity and the overall customer experience.
One of these innovative companies, Re / Max, recently got heavily involved in the AI ââspace. Two strategic acquisitions in the past 18 months have put Re / Max and its global network of real estate professionals at the forefront of adopting and implementing AI in the real estate industry. The first acquisition was a North Carolina-based tech company called First.Io, which uses AI to determine which customers under a Re / Max agent’s sphere of influence are most likely to advertise their homes in the next 12 months. A recent acquisition is a local data intelligence company called Gadberry Group – a company with information on over 200 million real estate in the United States. This combination of innovative technology paired with a wealth of data already leads to impressive results.
Here’s an interesting statistic – just over seven years ago, 4.5 million real estate leads were created through internet research. Compare that to last year, when it generated over 100 million real estate leads but only closes five to six million homes in a typical year. Common sense says a large chunk of online leads aren’t serious buyers in the marketplace. This is where AI gives real estate professionals the advantage of clearing out and sifting through the data to determine which leads are more likely to become active buyers and sellers.
The aforementioned First.Io app is a great example of AI at work. The app first aggregates data from an agent’s existing database, email contacts, and mobile phone contacts, and then uses publicly available information to fill in missing information in the database (updated property addresses, birthdays, etc.). Now the agent has a more comprehensive database of contacts that the agent is not entirely unfamiliar with. Then the AI ââkicks in by analyzing those contacts with over 700 different publicly available data points. Information such as how much equity a person has in their home, how many years they have lived in the home, whether they just had a child, or maybe kids went to college. The proprietary algorithm created by First.Io then provides the realtor with a curated list of potential sellers who are more likely than the rest to list their homes in their database for the next 12 months. This is valuable for a realtor to determine who to market their expertise to to help with a potential home sale.
Obviously, the benefits of AI have their limits, but it’s hard to argue that they are of no use, either in the real estate or any other industry. This is a trend that will only grow and get stronger. Will the real estate industry get involved? It already has.
Peter Crowley is President of the Re / Max Alliance Group.