Gavin Swartzman, president of Chrisie’s International Real Estate, outlines three guiding principles to help real estate agents leverage the power of AI to grow their value proposition and business.
When my grandfather immigrated from Poland, like many immigrants at the time, he arrived with almost nothing. Eventually, he managed to build a comfortable life for himself and his family, but he continued to view the New World through the lens of the Old World.
Sometimes he repeated that perspective in his favorite expressions. When he saw his neighbor polishing up his fancy new car in his driveway, he said, “I don’t know. “Is the car for you or are you the car?”
This was his way of warning his friends not to become so obsessed with a subject that they would overlook it when they became its servants. Lately, as the real estate industry and all other industries are gearing up for artificial intelligence, I’ve been thinking about my grandfather and his signature expression.
learn without using the internet
To be clear, I do not believe that the enthusiastic embrace of AI is just vanity, the epitome of the proverbial shiny new car that inspired my grandfather’s skepticism. In fact, I think we are at a moment where we see AI changing the way we do business. I just don’t know how.
One reason is that AI is different from other technologies that have come into the industry. It’s different in the sense that we understand it at the same time as the rest of the world.
Typically, real estate is years behind when it comes to technology. So while it’s great fun to know that we’re currently moving ahead (and sometimes setting the pace) in business, it also means we don’t have the luxury of learning from others’ successes or failures. In other words, we do a lot of trial and error.
Today, AI tools are being developed for all sorts of applications in the industry, including communicating with clients, setting up showings, assisting with negotiations, drafting contracts, and managing escrow. Brokers and agents also spend a lot of time experimenting with what works for them and what doesn’t.
Three basic principles of AI in real estate
Ultimately, I believe that to successfully leverage AI, brokers and agents must approach their tasks with three guiding principles in mind:
Principle 1: Audit before you automate
First, you need to focus on your own processes and operations to understand what needs to be optimized and how. We need to look at every aspect of our business: client-facing, agent-facing, back-office.
While AI can enhance some capabilities and replace others, it may have no effect on or negatively affect others. But if we don’t know where we excel and where we need improvement, we won’t know where to invest in AI or how it will benefit us.
Principle 2: Do the math
Second, we need to work on understanding business problems computationally. This summer at Inman Connect in San Diego, Columbia University professor Josh Panknin, director of real estate artificial intelligence research and innovation, gave a presentation in which he said AI is just math.
Computers can solve almost any problem, as long as you can structure the problem computationally and input the necessary data.
We see this happening with moving trend software that agents deploy to see which past clients are likely to move in the near future. This problem (past client hiring a new agent because the original agent didn’t contact you in a timely manner) can be solved computationally.
The likelihood of moving depends on factors such as length of current residence, age, change in occupation, income, changes in family structure, online search activity, and social media activity.
Brokers and agents who think about challenges computationally can have greater success in identifying and implementing AI solutions.
Principle 3: Automate routines and improve relationships
Finally, the time and money saved through successful AI implementation must be reinvested to create even more value and grow the business. My colleague Amy Corr, Chief Brokerage Officer at @properties Christie’s International Real Estate, sat down with technology company CEO Jim Olson on our latest podcast. Jim Olson wisely said that AI itself is not the differentiation that agents should seek.
Olson argued that well-worded property descriptions, superior collateral built from a smartphone app, and the ability to schedule and route weekend showings in seconds are critical to the future of real estate. Agents who don’t master these tools will quickly fall behind.
But rapidly advancing agents do more than just master AI tools. It also leverages repurposed resources to focus on the differentiators that humans do far better than machines, such as understanding nuance, managing emotions, and nurturing relationships.
Is AI running the show?
In the near future, there may be brokers and real estate agents who tell their clients, “My computer will recommend the top 10 properties, schedule showings, negotiate contracts, process mortgage approvals, and see you at the closing table.”
If my grandfather were in this world today, we would probably say to those agents: “Is the AI working for you, or are you working for the AI?”
Gavin Schwartzman will become the new president of Christie’s International Real Estate. Connect with Gavin on LinkedIn.
