Opinion: Could Tech be the end for the Real estate Brokerage Firms?

OPINION: COULD TECH BE THE END

for the Real estate Brokerage Firms?

Speaking of homes, has real estate really caught up with the current developments in technology? It may seem like an obvious question but we all know the real estate industry tends to be shy to change! The short answer, real estate is catching up with technology, and while the progress has been slow, I am happy that we are beginning to see the impact it has in the industry.

Technology is disruptive and probably this is the main reason why its adoption in the real estate industry has taken forever. One of the fears most realtors, listing agents, real estate agents, brokers, mortgage servicers, and many other stakeholders have is whether technology and in particular AI will replace the human element in real estate. We’ve seen technology replacing most other industries and a good case to mention is the finance industry. The ‘encroachment of technology and AI in real estate is causing apprehension among many stakeholders who feel that their jobs are being threatened. The good thing is that technology and ita adoption in real estate is a conversation that is not a surprise to many people, we’ve had this debate for so long and since we began accepting the new reality, a wide variety of technologies have come up and have revolutionized the real estate landscape. But it is also important to recognize the role of the human element in the changes that are taking place in the industry- but more so, what technology has done to revolutionize how real estate agents do and approach their jobs.- take an example of augmented reality which has usurped the way they handle their assignments.

Technology might be the best thing so far that has happened to the real estate industry and therefore today we are going to take a deep dive and look at the role of technology, more specifically AI in real estate and whether real estate agents and other stakeholders should be concerned or emboldened by its adoption and prominence.

THE CURRENT STATE OF AI IN THE REAL ESTATE INDUSTRY

The real estate industry is so huge! In fact, it has a global market size of $280.6 trillion. When it comes to technology investment, it is estimated that the industry has made $9.6 billion worth of investments. Much of this investment has been done in the area of proptech. However, it should be noted that this phenomenon is changing rapidly with the potential of AI being gradually recognized. Though full adoption is yet to materialize, there have been numerous advancements in the usage and affordability of technology that have been the

key drivers in its adoption among many real estate businesses now more than ever. In fact, the last decade has seen a significant rise in new technologies been adopted in real estate.

Proptech is perhaps the most recognized form of tech adoption in the real estate industry and basically, it involves the use of technology to impact the way realtors do business. This majorly is done through introducing new digital ways that are disruptive to the industry. One typical example would be the iBuyer model which utilizes algorithms to buy and sell properties in just a matter of days. This removes the need for a realtor in the buy-sell process. The rise of iBuyer is one of the extreme examples of how proptech is changing the real estate landscape.

Interesting: in 2019, investment in proptech was $14 billion in the first half of the year. By comparison, that’s more than the entirety of 2017 ($12.7 billion) The way realtors and perceive the adoption of real estate will matter a lot. At present, the adoption is significant, but not so prevalent. AI as a business tool is just getting started, its popular days are yet to come, but we are fast approaching that.

THE GROWING ROLE OF AI IN REAL ESTATE INDUSTRY

The power of AI is overwhelming and it has a tremendous transformative capacity. AI has helped so many companies automate their operations which in turn has increased efficiency. One report by PwC found that AI could potentially raise the global GDP by 14% between 2017 and 2030. In addition, another report by Gartner found that as many as 37% of organizations have adopted some form of AI in their business operations. However, Gartner warns that a spike in the rate of adoption could result in loss of employment which is an opinion shared by Brooking Institute that found that 25% of all the U.S. employment or 36 million jobs fall in the high-risk category to bear the brunt of automation. If so, this will have severe impacts as far as human capital is concerned.

Today, many operations are being handled by some software and not just in real estate, but in so many other industries which speaks to the fact that jobs will be replaced at some point. A study by Altus Group found that 48% of the executives are “using or already trying out AI and machine learning” but there is valid data supporting that we are still very far from seeing real estate agents being replaced by machines.

Part of that is because real estate needs some human touch to it. There is some specificity in the industry that calls for a human-to-human interaction which means, rather than replacing the agents, AI will be forced to work hand in hand with the agents, helping them to make databased decisions.

If you think about the sales transaction process, it is complex, heightened with emotion, and heavily reliant on the human overseer to tactfully direct a successful closing. To achieve this, agents have to be extremely experienced and have the right observation skill to close the deal successfully, and given the fact that AI cannot accurately detect emotions, the human side of it will remain for a while.

So as a real estate agent, you should not be worried about your job or whether AI will replace you, i think technology comes to ease up the whole process, the specificity required in the real estate industry, as well as the reliance on interpersonal know-how, makes human touch more precious, which are some of the things AI cannot do.

Sources: https://asperbrothers.com/blog/ai-in-real-estate/ https://www.fastcompany.com/90540856/will-silicon-valley-put-real-estate-brokers-out-ofbusiness https://www.impactmybiz.com/blog/will-ai-replace-real-estate-agents/

SELECT A VIP AGENT IN YOUR AREA

Adrian Bates Los Angeles

Cornelius Jackson Irvine

Jenny Gonzalez Corona Adriana Montes Florida

Danon Burnside San Bernardino

Joe L. Fisher Richmond Ameer Elahee Fontana

Denise Matthis San Diego

Johnnie Morine Texas Briana Frazier Los Angeles

Emerick A. Peace Maryland

Julius Cartwright Ohio

SELECT A VIP AGENT IN YOUR AREA

Monica Hill Menifee

Ruby Frazier Riverside

Yvonne McFadden Arizona Norman Green San Francisco

Sharon Bartlett Texas Peggie Simmons Arizona

Steve Peterson Oakland Robert Langston Fairfield

Success Money LA Area