It may come as no surprise that whether artificial intelligence (AI) will replace real estate agents has been an ongoing debate.
Some say AI will bring efficiency, accuracy, and cost savings to the real estate industry.
In contrast, others argue real estate transactions require emotional intelligence, human touch, and specialized knowledge not (yet) replicable by AI.
But there is more to this debate than these arguments against and in favor.
Therefore, I will explore both sides of the argument in-depth and complement it with principles of futurology to assess the risk of real estate agents being replaced by AI.
Sounds interesting? Please continue reading…
6 Typical Arguments for Real Estate Agents Being Replaced By AI
Since the question of whether AI will replace real estate agents is an ongoing debate where subjective opinions clash, in this section, I will first go down the typical route in discussing six standard arguments in favor of real estate agents being replaced by AI.
The following section will then discuss typical arguments against real estate agents being replaced.
After these two sections, I hope you will see that it’s not the best approach to determine an answer to this question.
So here are the arguments for real estate agents being replaced by AI:
1) Efficiency and Speed
Have you ever played a strategy game with base building against an AI enemy?
If yes, you will know that the AI enemy doesn’t need to click, meaning it is faster in performing tasks.
The same is true for other AI.
It’s faster and more efficient than humans in performing tasks such as generating reports, analyzing property data, or identifying potential leads or scoring leads.
2) Cost Savings
An AI replacing a real estate agent would save commission costs for buyers and sellers if the only task of real estate agents were only having the role of an intermediary.
However, while AI may reduce costs, it may also lead to a lack of accountability and the potential for errors or mistakes, leading to long-term costs for buyers and sellers.
3) Accuracy
Using AI instead of a real estate agent could make more accurate predictions.
Why?
Because it has access to a large amount of data leading to more successful property transactions.
For instance, when a real estate agent helps a client find a new single-family home.
He can recommend properties based on the client’s preferences and budget, and he will do this by using their experience and expertise.
However, these recommendations are often limited because of personal market knowledge.
In contrast, AI can analyze a large amount of data using various sources (e.g., public records, property listings, demographic data, et.). It can then apply machine learning algorithms to identify patterns and trends that are usually not immediately visible to humans.
Consequently, the AI can make more accurate predictions about potential property value and the likelihood of it being a good fit for a real estate buyer.
4) It’s Available 24/7
We, humans, depend on our biological systems (our bodies).
Unless we have a larger team of assistants working in different time zones, we can not be available 24/7.
AI, however, can operate around the clock and provide potential clients with property information and other services.
5) Reduced Bias
Suppose you are a real estate agent helping a client to sell a property, and you like Victorian architecture and a particular neighborhood.
That’s already a bias that may influence how you price a property, and this can lead to overvaluation or undervaluation.
Unless it’s not programmed that way, an AI doesn’t have a preference for a specific architectural style or neighborhood.
Instead, it can use data-driven insights to eliminate bias and provide a fair and transparent valuation for the property.
6) Consistency
We are back at the biological limitations of a human real estate agent.
Humans can get tired and prone to errors, whereas AI does not (it can still have some bugs, though).
So it can offer consistent service to clients without getting tired.
However, this argument can be weakened by saying that a human real estate agent can better adapt to unique situations and provide the same level of creativity and problem-solving.
6 Typical Arguments Against Real Estate Agents Being Replaced By AI
Now let’s get to the typical arguments against real estate agents being replaced by AI.
1) Lack of Human Touch
Isn’t it nice to call a company’s customer service to be greeted by a well-done digital voice of an automatic answering system or a chatbot?
And since technology, day by day, invades daily human lives, it will become a unique selling point to offer the real human touch.
This was already discussed in this, this, and this article where studies confirm that most people still prefer communication from human to human.
Now imagine real estate, a field much more people-oriented than other industries. Many buyers and sellers value the personal touch real estate agents provide.
AI can’t replace that soon, especially regarding “products” (properties) that usually have one of the highest price tags compared to other products.
2) Complexity of Transactions
As you surely know, real estate transactions can get complex. So you need specialized knowledge and experience to navigate it without costly pitfalls.
You may have recognized a pattern in my article about real estate AI companies.
There is no universal real estate AI for all imaginable use cases.
It caters to particular use cases.
So while AI can assist with some tasks (e.g., property valuations), it cannot replace a human agent’s expertise and negotiation skills.
3) Unpredictable Situations
This is somewhat related to the complexity of transactions.
A first simple real estate transaction turning complex because the seller didn’t include the dryer in the offer can turn into something unpredictable.
AI cannot anticipate and adapt to that as easily as a human real estate agent can.
However, if someone would train AI on a vast dataset of all types of unpredictable situations that have occurred in the past in real estate transactions or related to real estate, this argument could be weakened.
4) Trust and Accountability
Since it’s usually larger amounts of money that change hands, real estate transactions are based on a high degree of trust and accountability between agents, buyers, and sellers. As an agent, you are held to ethical and professional standards.
You can also be held accountable for your actions if something goes wrong.
This is not the case with AI.
It usually lacks accountability and may not always act in the best interest of its users.
Even if it did, AI real estate providers would ensure its product or service can’t be held accountable to mitigate their legal risk exposure.
5) Emotional Intelligence & Support
Depending on the type of property you specialize in, selling or buying property almost always involves emotions and stress.
An experienced human real estate agent can provide emotional support and guidance.
It would also need emotional intelligence, which current AI models can’t simulate sufficiently.
6) Local Market Knowledge
Real estate agents usually have first-hand knowledge of local markets to inform their clients about neighborhood trends, community amenities, school districts, and even one or two personal experiences with particular activities and amenities in the neighborhood.
AI is limited in this regard. It can access data about a particular area but not tell you about its favorite pastries in a local bakery.
Why This Pro and Con Approach Is Not Ideal
Now after reading the arguments in favor and against real estate agents being replaced by AI, can you answer the initial question with yes or with no?
Exactly, me neither. I could have added more arguments for both sides, and we wouldn’t advance in finding an answer.
The person who would like AI to replace real estate agents would feel their arguments are stronger, and real estate agents not wanting to be replaced by AI would consider the other ideas stronger.
So what’s the problem? We just use something similar as pros and cons, which is usually pretty subjective.
What we need instead are principles of futurology to approach objectivity for that.
Principles of Futurology to Assess the Risk of Real Estate Agents Being Replaced By AI
So what is Futurology?
According to the definition of Wikipedia it’s “the systematic, interdisciplinary and holistic study of social and technological advancement, and other environmental trends; often for the purpose of exploring how people will live and work in the future.”
It is also named future studies or foresight.
Since it’s an interdisciplinary field, it combines different methods. Involved are areas such as psychology, sociology, and technology.
Based on these fields, scenarios, and forecasting of what the future might look like are developed.
Other tools futurists use are scenario planning, trend analysis, and speculative fiction.
What is the ultimate goal of futurology?
It’s not about making an exact prediction of the future but helping professionals from different business fields to make informed decisions and prepare for a range of plausible futures.
Well, I guess if futurists could predict the future, why would they work as such? They could get the lottery numbers each week right—the end.
So let’s now use different scenarios to predict better whether AI will replace real estate agents, and you can prepare yourself for each scenario, or at least the most likely one.
AI vs. Real Estate Agents: Who Will Win the Battle for the Industry (3 Scenarios)
Before we get into the scenarios, I want to share some background information about AI development because it is crucial to determine whether it can replace real estate agents.
The below list includes different types of AI. It’s ordered from less to most developed. The latter one is almost human.
- Reactive Machines
- Limited Memory
- Supervised Learning
- Unsupervised Learning
- Reinforcement Learning
- Theory of Mind (still in development)
- Self-Aware (theoretical concept)
The most basic types of AI are reactive machines and limited memory AI, almost with no learning capabilities.
More advanced are supervised, unsupervised, and reinforcement learning, and they can learn and make predictions based on that learning.
That’s where we are at present (supervised and unsupervised learning).
We are also just a few years away from the widespread application of Emotional Artificial Intelligence (source), which would be “Theory of Mind).
What is still much farther away is self-aware AI, which would be able to understand its existence and emotions, similar to human consciousness.
While significant progress has been made in developing AI, it is essential to note that even the most advanced types of AI still have limitations and cannot replicate the full range of human cognitive abilities.
Scenario 1: Real Estate Agents Are Entirely Replaced by AI-Powered Platforms (10% Probability)
In this scenario, AI-powered platforms replace real estate agents completely.
This could only be possible if you can make an AI robot almost identical to a human.
So from the above, you would have to have reached at least a fully developed AI at the level of theory of mind.
I assign this scenario a 10% probability, a low one, since from the earlier mentioned arguments in favor and against, you could learn that buying and selling a property is a complex process with many variables, requiring many interpersonal and negotiation skills. Not to mention the legal part.
For AI, providing personalized advice and guidance to clients and negotiating and navigating complex deals is challenging.
And if there were such an AI, as already mentioned, in high-stake situations like real estate transactions, many buyers or sellers would still likely prefer to work with a human agent.
I estimate that in about ten years, a minority of real estate sellers and buyers may start using far enough developed real estate AI robots.
It will be buyers and sellers open to new technologies and comfortable with digital interfaces or a robotic appearance.
These types of buyers and sellers will likely have a particular personality type.
According to the Big Five personality traits, one of the few reliable ones, it will be clients who score high in traits such as openness to experience and extraversion.
Why?
Because these traits are more likely to embrace new technologies and try new approaches.
But personality traits are just one factor determining which type of buyer or seller would belong to the first minority of people using AI real estate (robot) agents.
Scenario 2: The Friendly Assistant for Real Estate Agents (25% Probability)
In this scenario, AI-powered platforms take entirely over repetitive tasks of real estate agents, such as property listings or particular marketing tasks.
I estimate this scenario with a 25% probability because AI-powered platforms have already started taking over the routine tasks of real estate agents.
You can already do things like have it create property listing descriptions, conduct marketing campaigns, score leads, analyze market trends, and more.
The current AI can use natural language processing (NLP), analyze property descriptions, and extract relevant information.
In this context, you want to read my article about the different real estate AI solutions (my article).
Scenario 3: AI-Powered Market Insights (65% Probability)
We can see this scenario now with the various AI real estate companies offering different solutions for different real estate niches (my article) already.
It’s the “light-version” of scenario 2.
So here, AI-powered platforms will work with real estate agents, providing them with data-driven insights and recommendations, such as property values, market trends, or buyer preferences.
Using this information as a real estate agent lets you make more informed decisions and provide more personalized advice to your clients.
In addition, AI can also assist you in managing your workload and streamlining your workflow.
I gave this scenario a high likelihood of 65% because these are the use cases already happening and a visible trend for the future. It’s just not yet adapted by that many real estate pros.
Conclusion
What can we conclude from the above? Will real estate agents be replaced with AI?
Looking at the arguments in favor and against and the three scenarios from above, it is unlikely that real estate agents will be entirely replaced by AI soon.
However, a particular type of real estate agent will likely be replaced within the next few years, but not in the way you think.
It’s the reluctant real estate agent who doesn’t want to integrate or embrace AI in their business.
As I discussed in scenarios two and three, this agent will not be replaced by AI but by real estate agents using AI efficiently.
Why? Because these “AI-embracing agents” will have a significant competitive advantage over the reluctant ones.
This article has been reviewed by our editorial team. It has been approved for publication in accordance with our editorial policy.
- Why Real Estate Conversion Rates Are 6-Times Below Average - March 21, 2024
- How to Manage Your Apartment Advertising Campaign - February 23, 2024
- Finding Marketing Channels for Apartment Advertising - February 12, 2024
