Introduction: Understanding the Impact of Artificial Intelligence in the Real Estate Industry
Many argue that the real estate industry is a little less welcoming to technological innovation. One of the reasons for this is because a large proportion of real estate transactions happen through brokers, landlords or word of mouth. However, the arrival of AI as a dominating force has managed to penetrate the real estate sector in innovative ways. That’s why AI technologies such as Indico data (using AI for faster document processing) or Spacemaker (for site planning) are rapidly emerging.
So thorough has been the impact of AI on real estate that it may completely overhaul the work of professionals like appraisers, mortgage lenders, developers and property dealers.
Leveraging advanced data analysis, AI can primarily help make the property buying process more convenient, while helping overall customer experience through automated tools.
On the surface level, AI can be used to put across personalized property recommendations to buyers. AI-powered chatbots can help users find what exactly they’re looking for, taking into account individual client preferences based on budget, location or requirements.
Let’s learn how Artificial Intelligence carries the potential to spearhead a revolution in the real estate sector, benefiting both buyers and sellers.
The Role of AI in Revolutionizing the Homebuying Process
It is undeniable that the home buying industry has taken a seat in the fast lane after adopting technologies powered by AI; Virtual and Augmented Reality (AR/VR), Internet of Things (IoT) enabled smart homes, and virtual assistants to name a few. Staggering amounts of real estate data, including property listings, sales, and demographics are processed and analysed, then used for targeted marketing.
AI enabled technologies are paving the way forward for a more seamless and connected experience, for both buyers and sellers.
1. Customized Property Recommendations using Machine Learning Algorithms
Machine Learning, or ML is the hot buzzword of AI these days; even the real estate industry is now hopping on the ML train. Putting concepts like similarity learning to use, property management platforms can integrate ML-based targeted property recommendations to potential buyers.
Taking note of user behavior and preferences based on interactions with property listings, ML-based property recommendations drastically improve the likelihood of finding a better property match, meaning better customer satisfaction.
Predictive Analytics powered by ML algorithms presents a refined experience for homebuyers, by offering personalized property recommendations. Preferences like budget and behavior patterns constitute these fancy algorithms.
Here are some common models:
- Collaborative Filtering: recommends properties based on the behavior and preferences of similar users.
- Content-Based Filtering: recommends properties based on the features of the properties and user preferences.
- Hybrid Models: combines collaborative and content-based filtering for accurate recommendations.
- Matrix Factorization: helps in identifying latent features contributing to user preferences.
Brands like Keyway are at the forefront of using AI and ML for real estate; Keyway in particular uses AI models to make data-informed commercial property deals efficiently through their platform. HouseCanary is another player that introduced AI in property management to provide tailored searches and accurate home details to customers.
2. Virtual Tours and Staging for Remote Homebuyers
The user has been shown a set of matching properties that tick his budget, taste and requirements. What now?
By creating virtual environments for potential renters, buyers, and real estate professionals, Virtual Reality (VR) and Augmented Reality (AR) technologies have given a new and immersive dimension to property visualization.
VR makes way for interactive, immersive experiences with 360-degree virtual scans of properties where remote homebuyers can take a virtual tour of the property; they can walk around, examine architectural details up close, and experience the space from multiple angles. Many asset management startups have already implemented VR
AR, on the other hand, overlays virtual elements on top of the real, physical space to enhance a potential buyer’s perception of a physical property. With AR glasses and even some smartphones, buyers can examine the interiors and the exteriors of a property in real-time, while additional information such as the dimensions of a hall, furniture placement, or even upcoming renovations overlaid. AR enables the virtual staging of a property with a choice of styles, designs, and furnishings.
VR and AR also make conducting remote property tours easier; eliminating physical site visits saves time and resources of both homebuyers and real estate agents.
Marketing and Sales is another area massively boosted by AR and VR technologies. They help showcase properties in a much more engaging way, and make them stand out in the saturated market. AR visualizations and VR property tours are shared on websites and social media, reaching a wider audience.
3. Automated Valuation Models (AVMs) for Accurate Pricing
Simply put, Automated Valuation Models (AVMs) are just AI-based pricing models. AVMs combine statistical and mathematical models with databases of previous transactions and properties to accurately calculate real estate market values. Almost all AVMs compare the valuation of comparable properties within the same time frame.
Zillow and Trulia, popular property listing sites, use consumer-friendly versions of AVMs to value residential properties. Even quite a number of Wall Street establishments use AVMs for precise property valuations.
AVMs save time, money, and human effort; they make thousands of calculations and comparisons in seconds to provide accurate pricing recommendations, eliminating the need for in-person appraisals.
4. Chatbots in Real Estate: 24/7 Customer Support and Lead Generation
Most of us have encountered chatbots at some point in our lives. These are automated programs that communicate with users through text or voice chat. AI-powered chatbots have been deployed thoroughly in the real estate segment now.
AI chatbots, sometimes with digital avatars, are gradually replacing traditional ways of customer interaction. While offering an advanced, affordable user experience, many of the complexities associated with in-person agents and physical appointments thus enhancing customer engagement.
To help real estate agents and brands incorporate AI-powered capabilities into their systems, platforms like DaveAI have emerged. Dave AI offers customizable capabilities like chatbots, 3D visualization, and adaptive lead generation for business processes that can massively transform how you deal with customers of your real estate business.
Apart from providing a great CX, chatbots help with:
- Lead Generation and Qualification
- Virtual Assistants, for Property Recommendations
- Customer Support
AI chatbots also maintain a collection of frequently asked questions (FAQs) and their corresponding answers. These chatbots have been trained to comprehend user inquiries and deliver information using Natural Language Processing (NLP) algorithms and a pre-existing knowledge base, focused on immediate assistance.
How AI is Revolutionizing Property Management
From lease agreements and rent collections to tenant management and administration – property management involves juggling many things at a time. AI can help streamline repetitive and boring tasks such as maintenance requests. Even the tenant experience is constantly improving with tenant screening algorithms in place of conventional scrutiny boards.
1. Streamlining Administrative Tasks with AI
An interesting survey conducted by Manyika (2017) revealed that close to 40% of administrative work does not require human input and can be automated. Using Machine Learning (ML), Natural Language Processing (NLP), and Robotic Process Automation (RPA) algorithms, property management admin tasks such as document classification and retrieval, data entry, and Customer Relationship Management (CRM) can easily be moved to an automatic workflow.
Even Lease agreements are automated in modern workflows with AI software such
CheckboxAI, with AI-assisted generation, management, and execution of contracts.
2. Enhancing Maintenance and Repairs with AI-powered Solutions
AI-based algorithms analyse real-time data from IoT-enabled sensors to predict failures or maintenance needs before they happen. Predictive maintenance algorithms powered by AI allow quick scheduling of repairs, optimizing costs, and maximizing efficiency.
Similarly, IoT-enabled smart building management systems, from HVAC and security to lighting systems, coupled with smart building analytics provide deeper insights into the condition of building equipment and even stats about energy consumption and air quality.
3. Improving Tenant Experience through Personalized Services
Improving the tenant experience does not take much effort using AI powered solutions. Self-guided tours propelled by AI deliver a distinct property viewing experience, while personalized recommendations for services and amenities based on an existing pool of tenant data further drive the tenant experience.
For instance, an establishment by the name Redfin is already implementing AI to replicate human agents, and automating the recommendation process for tenants, with the help of AI matchmaking tools.
Conclusion: Embracing the Power of AI for a Transformed Real Estate Industry
Decidedly, the future of the real estate industry lies within AI; from virtual property tours and predictive analysis to AVMs and chatbots – advancements in technology are set to significantly transform real estate and home buying as we’ve known it.
Property management too is getting a push forward by harnessing the benefits of AI technology, with a portion of admin tasks now being effectively handled by AI.
It is probably safe to assume that the future of homebuying will be impacted heavily by AI. This will mean better property decisions and better affordability for the customers and innovative business strategies, better customer experience and cost saving for real estate players.