You’ve likely heard that AI is coming for you, your job, your friends and your family. There is nowhere to hide, and it will be here before we know it. It sounds incredibly ominous. I think most of us can agree that AI is upon us, but exactly what its impact may be in our daily lives and in business is still largely unknown.
Just how AI will impact the real estate process in San Carlos is also an unknown, but as someone who has surveyed just about every AI tool currently available for real estate, here are my thoughts on where it is and where it is headed in the San Carlos real estate process.
The Process of Buying and Selling Residential Real Estate Has Stood the Test of Time
Starting at the top, residential real estate is and always will be personal. Selling your home or looking for a new home for you and your family is certainly guided by wise financial decisions, but there is also a large component that is tied to your likes, emotions and well-being of your family. In other words, it is a highly personal decision that is also the single largest purchase that most buyers ever make. Given the marriage of those two concepts, the home buying and selling process is naturally exciting, yet stressful. The introduction of AI into this process seems naturally out of place and counterintuitive to something so personal.
The Real Estate sales process is also incredibly unique in that it went largely unaffected by the invention of the internet and other technological advances. For the billions of dollars that have been pumped into the companies obsessed with revolutionizing the home buying process since 2000, they have yet to make a dent in a process that has held the test of time. It is virtually the only major industry not to change its core process in a connected and modern world.
Purchasing a home for your family is personal. It is what all investors in real estate companies who are devoted to disruption in the real estate industry have never understood. On the surface, it seems like an industry that is ripe to have its process discarded and synthesized into something more efficient and more cohesive with modern advancements. Further, it is not like real estate agents are gatekeepers of confidential and top-secret information anymore. All sales information for comparables performance, and valuations can be found online in a hundred different places. Yet, each year in San Carlos, 99% of the buying and selling market decide to work with a traditional agent from a well-known brokerage and a very similar process that has been in place for the last 80 a years. Why?
It is a Process That Works
There are a variety of reasons, but perhaps none more prominent than: It works, and it works well. That is the easiest way to put it. When is the last time you heard of a San Carlos seller who was upset at their investment in San Carlos real estate and the process they used to achieve that goal? It is rare to have a San Carlos seller say that their purchase and subsequent sale was not one of the best, if not the best, investment they ever made. Now, you can naturally argue that the process can be made cheaper and more efficient, and I understand that argument. However, here’s what you do not see behind the scenes and why I believe the process will remain largely similar in its current form and function with top tier agents continuing to guide the process and structure.
When you read the following, please understand that it is being said in a light-hearted manner and that I would be the first one to find deficiencies with myself in certain situations. All of that being said, and as you may have noticed, the general public has turned a bit irrational and is growing more and more difficult with each passing day. If you think this sentiment is overblown, just flip on the national news or swipe through your favorite social media platform.
Add to that notion the growing gaps in communication between generations. Baby Boomers, Gen X, Millennials and Gen Z are all very different. They communicate differently. They use technology differently. They interact differently. I have clients in the Baby Boomer and Gen X generations who prefer face-to-face meetings or phone calls for every update, and I have others in the Millennial and Gen Z generations that have never really spoken to me other than through a text or email. Add in a third layer of complexity in the Bay Area with so many cultures that approach strategy and negotiation differently. Wrap all three of those up and you have a highly sensitive and layered set of facts and behaviors that will likely end up causing considerable issues in the home buying and selling process. To be clear, it is not that any of these groups are difficult, but it could be interpreted as such because of these massive gaps that exist between the different groups involved. To think that these very noticeable voids in understanding intent are going to be bridged by AI or a call center is simply unrealistic, and frankly dangerous to the marketplace and home values in general.
I will tell you that over the last few years, at least 75% of my clients would say that they thought the folks on the other side of the transaction from us were odd and/or difficult. Keep in mind that this is after I shielded them from 90% of the nonsense that the other side was actually putting out there. I can only imagine these two sides going at each other while being guided by AI. Really good agents do two things well: (1) they maximize the position of their clients with pricing and negotiation; and (2) they understand how their clients fit into the much larger picture. They know if their clients will be perceived as difficult. They also know if they are vulnerable and when they may be outmatched for a particular situation. This is precisely when good agents step in and get ready for a battle so that their clients never know what takes place behind the scenes. They achieve the objective and minimize the stress on their clients. It is precisely for these reasons, that AI will not replace the top tier agents.
All of this is not to say that AI does not have a place in the traditional real estate process. I believe it does. There are several ground-breaking AI companies right now involved in different aspects of the real estate transaction. For instance, there are AI features which can take a 400-page disclosure package and instantly scan it and give you a priority list of items to be fixed on a prospective property and what those items may cost to fix in San Carlos. While this is mesmerizing to see, I have found these recommendations to be less than 50% accurate.
Everything from the most worrisome items in a home inspection to the cost to fix items are categorically false in at least half of these reports. I can see these inaccuracies being worked out over time to a finished product that is much more reliable. However, that is a process that will be ongoing for some time. As a good friend of mine who is very involved in AI told me recently, we are in the Comp USA and AOL days of AI. We are merely in its infancy.
AI will have a place in real estate. However, the core process itself is likely to remain unchanged.
