Financial planner Amanda Neely writes that you already know the difference between a Zestimate and an actual valuation. The same logic applies to money.
We have seen what AI can do in real estate transactions. Perhaps you’re automating valuations, contract analysis, lead scoring, or market forecasting. Some of them are really helpful. Some appear more believable than they actually are.
People are now using it for personal finance. They ask things like how to invest your fee income, how to max out your SEP-IRA, and what to do with the proceeds from your flips. The AI answers with confidence. It uses headers, bullet points, and is thorough enough to feel definitive.
I use AI in my financial planning practice. I’m not here to tell you to avoid it. But the ones that caught my attention this year are worth naming.
you already know your limits
You are constantly explaining Zestimate to your clients. Estimates based on available data. I don’t know about the renovation. That doesn’t take into account things like highway noise, the condition of the roof, or the buyer falling in love with the kitchen. It’s the starting point, not the price.
AI-driven financial advice works similarly. Generate answers based on the information you have access to. I wouldn’t know that unless you tell me that your income fluctuated from $280,000 one year to $90,000 the next. If you forget to mention medical expenses, business losses, or insurance you already have, we will respond without it. This is the answer for the median value.
The median case is probably not you.
something really useful
AI is good at explaining how things work. I know what a 1031 exchange is and how the timeline works. I can explain the difference between a SEP-IRA and a Solo 401(k) at a 7th grade level. If you want to know how self-employment tax is calculated, we can explain and calculate it for you exactly. One of my favorite questions is a list of questions to ask before consulting with a professional.
If you’ve ever stared at a financial concept until your eyes glazed over, AI can explain it to you in plain language. That’s the real value. This way you won’t feel lost when entering a professional conversation and will be prepared to ask the right questions.
All it can’t do is look at your actual situation: your income patterns, your business expenses, what you’ve done so far, what’s going to happen this year, etc., and tell you specifically what’s true for you.
Issues for real estate professionals
Standard financial advice derived from AI assumes a stable salary, employer match, and a 20-year runway to retirement at age 65. That profile does not represent most people in the real estate industry.
Your income is irregular, sometimes very irregular. Business and personal expenses get mixed up. Your tax situation is more complex than that of a W-2 employee. Your risk tolerance in any given year is determined by what you actually have in the pipeline.
The AI won’t know about it unless you tell it. And even if you tell it, it tends to answer according to your version that fits a well-known template.
There is also this. AI is under no obligation to tell you anything you don’t want to hear. The trustee does so. AI is optimized to produce complete and satisfying answers. A good professional is optimized to create accurate plans. Even if being accurate means “that plan doesn’t work,” “I’m missing something,” or “I said I could afford this, but the numbers say otherwise.”
It’s a pattern I’ve seen before. For me, it was a book by a popular financial guru. When I was younger, I used to highlight it, refer to it, and treat it like a financial bible. That advice was certainly correct. It was written for someone else’s life, and I just applied it to my own life without really understanding the difference.
The fact that it was in the book gave me a sense of authority. His thoroughness gave a personal impression.
AI can achieve similar effects faster.
what to do with it
Use it for orientation. Use this word to learn your vocabulary before speaking to someone who can actually apply it to your situation. Bring your AI output into that conversation if you want. If you’re a good professional, you won’t be intimidated by that. They explain what’s right, what’s wrong, and what the AI doesn’t know about you.
Ask them:
Do I have to act in my best interest? How will I be paid? Have you ever worked with commission-based self-employed professionals? What do you think I’m missing?
Zestimate didn’t mess up the ratings. That changed what the evaluation needed to do (i.e., it added something that the algorithm couldn’t add). Your financial advisor should be doing the same. If not, that’s still information.
