Real estate has been historically slow to modernize, but AI is changing that. The integration of artificial intelligence is transforming how buyers and sellers interact with agents, fundamentally altering competitive dynamics in the industry.
With AI reshaping daily operations of a real estate agent’s business by automating tasks — from generating property listings to conducting neighborhood analyses — the agent’s focus in day-to-day activities will shift.
Ryan Serhant, CEO of Serhant and reality TV star of “Owning Manhattan,” says AI is already making real estate less about access to information and more about the agent building deeper relationships. He predicts a mindset shift is on its way as agents leverage AI and at the same time are forced to find new ways to differentiate themselves in an increasingly competitive market. “If we are all using AI and have the same level of expertise, who wins? It’s the game of attention,” said Serhant at the CNBC Evolve AI Opportunity Summit in New York City this past week.
Buying a home is the single largest investment most Americans make in their lives, which makes real estate a business where greater success can be achieved with greater personal touch on the part of the agent. Serhant says the big advantage he sees in use of AI is having more time for the real estate agent to provide personalized attention to their clients.
“The product in sales is no longer just the skill set,” Serhant said. “It is the attention to the skill set.”
His own company, Serhant, has developed a service called “Simple” for sales automation to handle daily tasks in customer relationship management, which typically consumes over 60% of agents’ time.
AI tools are being used to streamline lead generation, automate marketing campaigns, and provide predictive analytics to identify opportunities, but that is not replacing the critical role of the agent in providing top performance. Serhant says AI won’t virtualize relationships, but for the real estate agents who embrace the AI revolution — which he says is a necessary move to make — it will strengthen their relationships.
Making access to real-time market data and sales insights less onerous may allow agents from small boutique firms to compete on a more equal footing with larger real estate corporations. “There is a trust factor in sales. … It isn’t about who is the largest, but who is the most empowered,” Serhant said.
That also stands to benefit homebuyers and sellers, Serhant said, with a wider selection of suitable agents with enhanced personalized services and greater focus on the client.
The real estate industry is still in the initial stages of adopting AI and understanding remains low among real estate professionals, but the interest is there. Generative AI was ranked among the top three technologies expected to have the greatest impact on real estate over the next three years by investors, developers, and corporate occupiers, according to JLL Technologies’ 2023 Global Real Estate Technology Survey. But the survey also finds that real estate professionals have very low understanding of AI compared to other technologies.
According to Serhant, agents who understand how AI can empower their business are going to have huge opportunities over the next 20 years to take significant market share.
No tech innovation comes without risks, and wire fraud remains a major challenge for the real estate industry, which will be exacerbated by AI. The FBI reported a big year-over-year increase in wire fraud cybercrime losses in 2023, driven significantly by real estate transactions. Improved artificial intelligence technology is facilitating real estate scammers.
Fraud can’t be ignored, said Serhant, but he believes real estate will adapt to the risks inherent in new technology in the same way the business has in the past, such as with digital listings. “With every advancement in technology, greater rules get put into place that can help stop those fakes,” he said.