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To AI or Not to AI: What are the risks and rewards?

May 17 2023

techhelp ai risks rewardsThe real estate industry is poised to adopt rapid technological advancements quickly, and artificial intelligence (AI) is at the forefront of these innovations. For real estate agents, the question is no longer whether to use AI but how to use it effectively and responsibly.

But what are the risks and rewards of incorporating AI into your real estate business practices, communications, and marketing activities?

Here are some examples and insights to help you make informed decisions about AI.

The Rewards

Increase Efficiency

AI is being integrated into all-in-one real estate marketing platforms to help automate many tasks, such as data analysis, lead generation, and communication with current and potential clients. Responding quickly to online leads is one of the biggest challenges real estate agents face. Studies have shown long average response times to internet inquiries. AI can help solve this, as intelligent responses to initial requests can be automated with AI. This will save you significant time and effort, allowing you to do what you do best: interact directly with your clients.

Example: AI-powered chatbots can handle initial customer inquiries and schedule appointments, freeing agents to concentrate on building relationships and closing deals.

Enhancing the Customer Experience

AI can help personalize marketing content and streamline your sales process. AI analyzes a customer's preferences, past interactions, and online behavior and can instantly provide tailored recommendations and messaging, ensuring potential clients feel understood and valued. Companies like Delta Media are doing this for brokers and their agents right now.

Example: An AI-driven platform could analyze what content your clients are clicking on in your newsletter and automatically send them more stories that are most likely to appeal to them.

More Accurate Predictions

Many real estate tech firms are using AI to process large volumes of data to make highly accurate predictions about who will likely list their home for sale within the next few months. This information can give agents valuable insights to inform their business and marketing strategies and precisely know when to reach out to a client before deciding what agent they will be working with next.

Example: AI algorithms are being used by real estate lead generation firms using historical data, online behavior, and other market information to help agents identify whom they need to be contacting now.

Competitive Advantage

Embracing AI for real estate can set you apart from competitors who may be slower to adopt this technology. By leveraging AI tools, you can offer your clients cutting-edge services and stay ahead of industry trends.

Example: An agent who uses AI-powered virtual staging, such as Matterport, can provide prospective buyers with a more immersive and realistic experience of a property, helping their listings to stand out in a crowded market.

The Risks

Data Security and Privacy

As AI relies heavily on data, it's crucial to ensure that the information collected and processed is secure and compliant with privacy regulations. Failing to protect your clients' data can result in legal and reputational risks. In addition, more tools and plugins for advanced AI tools like ChatGPT 4 are increasing how agents can use AI directly.

Example: An agent who uses AI tools to scrape social media data without permission might face legal consequences for violating privacy laws.

Algorithmic Bias

AI algorithms can unintentionally perpetuate biases if trained on biased data or if the developers inadvertently incorporate their own biases. This can lead to unfair treatment of certain groups, hinder your ability to provide equal services to all clients, and put you and your brokerage at risk of violating Fair Housing Laws.

Example: An AI tool that recommends properties, but an agent does not realize that the properties being recommended are taking into account race, gender, or other protected characteristics that could expose you and your brokerage to discrimination lawsuits.

Overreliance on AI

While AI can offer valuable insights and predictions, it's important not to rely solely on it for all communications. Your intuition, expertise, and personality influence what you say and how you say it. Moreover, relying only on AI for the content you provide your clients can be hazardous, as AI is imperfect.

Example: An agent uses AI to write all their content without careful research and editing. Now that primary AI tools such as GPTChat 4, Bard, and others are connecting to the internet, agents who do not carefully review the content AI provides increases their risk of making mistakes. After all, no one edits the internet.

AI makes mistakes

AI tools make mistakes, and sometimes creates false information. Media reports show dozens of real-world examples where AI made significant errors in its output. In one case, AI plagiarized a news story. When the infraction was identified, and AI was asked about it, AI admitted the mistake and apologized. Because we are early into the advanced AI cycle, it is fraught with risks from providing inaccurate information to agents.

Example: A real estate agent uses AI to write property descriptions for their listings. However, the agent is unaware that certain words in his narrative – while permitted by Fair Housing Laws – are not allowed by his local MLS. AI does not know this, so the agent and his brokerage will have violated MLS rules.

In the deadline-driven world of real estate, AI has the potential to help streamline the way agents market properties and serve their clients. However, like any technology, it comes with its risks and rewards.

While our tech analysts at Tech Helpline are not AI experts, they are your "go-to" source for all your everyday tech-related troubleshooting issues and questions. They are always available through your Tech Helpline mobile app, email, or a phone call and are ready to help!

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