The proliferation of technology in the real estate space has been slower than in other industries, but in recent years the traditionally analog industry has started to embrace digital technologies such as artificial intelligence (AI) and predictive data modeling. With more millennials joining the industry than ever (and also becoming a demographic with the most purchasing power) it’s a necessary advancement.
But what does this shift toward tech mean for real estate professionals and those who would use their services? If you’re a millennial, you might be asking, “What exactly will an agent do that I can’t do myself online?
According to a recent survey from Clever, millennials are 93% less likely than other generations to use a real estate agent, and are twice as likely to believe that agents are “unimportant” or “not important at all to the home selling process.” Approximately half of the sellers responding to the survey said they would be willing to use an AI platform to find potential buyers, while 37% think that AI could outperform a human agent, and 15% would try to sell their homes on their own without the help of an agent.
The millennial habit of choosing digital tools over people is a common trend in many industries. Why hail a cab, when you can order an Uber? Or walk three blocks to your local pizzeria when you can just order said pizza off GrubHub? Many believe that using apps and digital services is quicker and cheaper than handling things through a human. In many cases, they are probably right. But in some industries, you can’t replace the human touch.
Millennials looking to buy or sell real estate might be inclined to try to save the fees and commissions associated by taking the DIY route. Sure, finding properties online might be easy, but that’s just one piece of the real estate puzzle next to contracts, negotiations, closing deals, etc. In many cases, those fees are nominal in comparison to the extra profit or savings that the help of an experienced agent can deliver.
The most successful real estate deals happen when human professionals work in sync with technology, using it to create more efficiency, better accuracy, and overall improved experience for the client.
Machine learning and AI can enhance and enrich themselves over time at a much faster rate than any human mind can achieve. This constantly updating and improving systems is invaluable to real estate pros whose job it is to keep a finger on the pulse of the market. However, another huge part of the job description is the art of negotiation, which is something that can’t be taught to a machine. The machine can churn out all the insights an agent needs to come armed to the table, but it can’t learn intent and nuance. At the end of the day, the deal gets done by humans.
We tend to think about things in extremes, but AI isn’t really sci-fi, it’s simply data processing at a level that humans can’t approach. This next wave in real estate won’t see agents being replaced by AI entities accessible via an app, but rather top performing agents harnessing tools and data to build their deals. Many digital tools use AI and machine learning to provide real-time notifications and targeted geolocation so that agents can focus their marketing and networking efforts, gain experience and insight, and improve their services.
Sure, there are agents out there who could probably be replaced by Zillow, but that’s not because the role of agents is obsolete; it’s because the lowest performing agents aren’t taking advantage of tools that could help them provide better service and close more deals. If you’re an agent simply performing a property search that could be done by anyone online, then you’re not adding value and there would be no reason for a seller to pay your fees.
As more millennial buyers enter the market (and eventually Gen Zers too), they will naturally gravitate toward digital solutions. A real estate professional who knows how to align with those tools and use them to enhance their offerings will be the most in demand. Agents of all experience levels should prioritize learning about emerging technologies and finding ways to implement them. The competitive edge cannot be underestimated.