AI-powered software has become a true breakthrough in the fast-evolving real estate landscape. From business process optimization based on data-driven solutions to cost reduction and increasing service quality, AI broke new ground for realtors and brokers.
JLL research predicts that generative AI in the real estate industry will significantly contribute to the growth of the market by $98.1 billion by 2026 at a CAGR of 32%. It is not surprising that many companies implement this game-changer in their daily work routine. Redfin, Compass, Opendoor, and other leading digital platforms for residential real estate have already benefited from AI usage.
But why is AI software a powerful tool for dealing with many real estate challenges? What are the actual advantages of AI’s potential? And how can AI be used in real estate most effectively? Let’s break down all of these questions step by step without holding back a single detail.
5 Enduring challenges in real estate
Traditional real estate systems have a big gap in comparison with AI-powered ones due to the huge share of manual work.
Whether it’s buying, selling, or managing property, agents constantly encounter the following problems:
- Data overload: Excessive amounts of information can lead to frequent errors and incorrect decisions, slowing down work processes.
- Time management: The constantly growing and dynamic real estate market makes time management a big challenge due to a huge volume of tasks, unforeseen changes, and shifting deadlines.
- Low conversion rate: The average conversion rate in real estate ranges between 0.4% and 1.2%, which means that only 4 to 12 leads out of 1000 convert to actual clients.
- Personalization: Due to the large number of clients, agents may lack personalization in providing their services, which leads to a deterioration in user experience and a decrease in ROI.
- Market volatility: Constant changes in economic indicators, political events, and unexpected news require quick reactions and flexible decisions.
But in the current scenario, AI algorithms in the real estate industry can deliver effective solutions to each of the above problems, offering undeniable benefits for improving the work of realtors and brokers.
3 Benefits of AI in real estate
AI continues to increase its influence on the real estate industry, shaping a new work format for thousands of agents. Routine tasks and daily challenges are being changed by the following:
- Improved data processing: AI for real estate agents provides the ability to automate workflow, eliminate unnecessary paperwork, and minimize errors.
- Better customer service: Delivering fast responses and personalized experiences is no longer a problem. AI has 24/7 customer support using a powerful natural language processing tool.
- Cost reduction: AI can report real-time insights, having a positive impact on informed decision-making and increasing returns on investments.
Thanks to AI in real estate, businesses can stop missing new opportunities due to errors, time wastage, and inefficient use of resources. Let’s dig into the real-life Artificial Intelligence use cases in real estate to understand how advanced technologies cope with everyday tasks.
10 Best AI use cases in real estate
The main task of AI in real estate is automation and the facilitation of repetitive work. In just a few clicks, agents can get quick assistance from AI tools to complete administrative tasks and improve their common responsibilities.
Convenient conversion of physical documents into a digital format, record keeping, form filling, data verification, and other automated operations significantly ease the work routine. But this is not the limit of AI use cases in real estate.
Let’s dive into other solutions of powerful AI algorithms and explore them in more detail one by one.
1. Instant property search & recommendation
One of the most impactful AI applications in real estate is the swift retrieval of available properties and their detailed information. And the prime example of this AI use case is Multiple Listing Services, or MLS, which turned navigation on the real estate market into a smooth and simple experience.
Thanks to AI’s ability to learn, solve problems, and recognize patterns, such databases are able to suggest appropriate recommendations based on the preferences of prospects.
Users can also conduct more personalized searches, taking into account essential property criteria:
- location,
- price range,
- square footage,
- energy efficiency, and
- building design.
As a result, AI in real estate has become the number one solution to mitigate the difficulties of house hunting and significantly improve user experience.
2. Fraud detection & security
In 2020, United States companies lost nearly $1.9 billion due to real estate and rental fraud. However, this figure can be reduced by implementing AI algorithms in the real estate industry.
Capabilities of machine intelligence allow brokers to analyze transaction patterns and identify possible irregularities, creating safe conditions for property transactions. At the same time, this tool provides reliable data security. In today’s real estate environment, AI serves as an improvement for encryption techniques, monitoring data flows, and data masking, which helps protect confidential information.
Furthermore, such technologies have given rise to more comprehensive tenant screening. Artificial Intelligence in real estate eases the assessment of tenants by evaluating their data, such as rental background, credit history, employment, and income.
Enhanced identity verification, document authentication, and blockchain technology also complement other solutions aimed to reduce possible fraudulent activities.
3. Accurate property valuation
Performing a property valuation can be very labor-intensive and resource-consuming since it includes a myriad of factors that can change in real time. Advanced AI technologies allow realtors to get up-to-date and detailed information to profile a property listing involving
- location,
- crime rates,
- amenities,
- market trends, and
- transport hub.
Additionally, AI in real estate provides a detailed report on property features, like its quality of construction, size, furnishings, security, parking, smart home features, and other vital aspects. This allows investment-centric property companies not only to set up competitive rental or sales pricing based on data-driven decisions but also to spend more time searching for new ideas and strategies for business development.
4. Efficient lead generation
Earlier realtors and brokers had to cover a huge number of marketing channels. But now it is not necessary to spend substantial amounts of money to get effective results. Using AI in real estate, agents can conduct a detailed analysis to find out the preferences and behavior of website visitors.
All thanks to the introduction of Machine Intelligence that can collect data from website pages and digital advertising campaigns. According to laws and regulations in the United States for data privacy and protection, AI can collect the following data:
- Contact information: By getting a user’s name, phone number, and email, agents can respond to the needs of hot leads faster and provide follow-up letters about properties the prospects are interested in.
- User preferences: AI saves search criteria, which allows brokers to personalize offers while optimizing the user experience.
- Session history: Information about a user’s clicks, views of certain pages, and the time spent on a website page gives new insights about the most suitable and in-demand properties.
AI algorithms not only help select the most relevant offers for prospects but also outperform competitors in searching for qualified leads who have a real intention of purchasing the property.
Looking for creating AI real estate solutions?
We at Eastern Peak know how to make AI technology work for real estate businesses of any size and are ready to share our ideas, skills, and experience to help you out.
5. Construction project planning
First and foremost, AI real estate solutions provide real-time access to project information, allowing construction teams to collaborate more effectively. In addition, such algorithms can predict potential delays and propose adjustments.
Moreover, AI can bring significant improvements in automating many construction tasks, when it comes to
- project document management,
- supply chain,
- scheduling,
- measurement,
- resource allocation,
- budget tracking, and
- cost estimation.
All this greatly saves contractors time and money, increasing the accuracy of project data. Not to mention risk management, where AI assesses various risk factors while tracking regulatory changes to avoid potential difficulties on the project.
6. Predictive analytics for investment & market analysis
One of the most crucial and, at the same time, challenging tasks of any realtor is forecasting; and the use of AI in real estate is the best solution for identifying hidden patterns and factors that affect the industry. It can predict market behavior by analyzing trends, investor interests, housing prices, property specifics, and so on.
Moreover, AI can go beyond microeconomic factors and also take into account aspects at the national or even global level. Some examples of this can be economic indicators, infrastructure development, environmental factors, regulatory changes, etc.
Therefore, real estate businesses can receive timely insights about in-demand locations or properties to make informed investment decisions and adapt marketing strategies to the needs of potential clients.
7. Virtual property tours
After the start of the COVID-19 pandemic, real estate companies were forced to look for a new way to help their clients examine properties remotely. And that was the time to implement another part of AI in real estate.
Virtual tours with 3D views have decreased physical visits and saved time for both realtors and prospects. A detailed panorama view with the ability to zoom in on essential elements still remains in trend. AI features for realtors simplify the rental or sales of properties both located abroad and under construction.
8. Intelligent property management
AI in the real estate industry has made property management much easier for agents who control several rental properties and multifamily residences. For example, AI algorithms can automate document flow and improve the tracking of essential data such as
- lease agreements,
- rental applications, and
- maintenance reports.
Machine learning systems also play an important role in scanning documents for legal compliance, missed information, inaccurate dates, and other details. AI technologies even perform accounting duties and keep records on rent collection and other transactions, promptly sending notices about rent arrears.
9. Chatbots & virtual assistants for round-the-clock support
Multi-language 24/7 support with AI technology integration can interact with users regardless of time zone and language. Advanced chatbots also have a built-in NLP capability that helps them interpret user intent and respond accordingly. In addition to providing all the necessary information, the algorithms additionally create more convenient personalized communication.
Furthermore, AI technology is used in real estate for follow-up communication, automating appointment scheduling, push notifications, sending additional materials, conducting surveys, feedback forms, and so on.
Read also: Chatbot Apps: The Future of Customer Service
10. Smart homes
Given the current dynamics, a cozy, stylish home with all amenities has become the rule rather than the exception. People are in a race for a unique experience, and automated home systems with the integration of AI and IoT technologies can easily provide it.
Such innovations are presented as voice-activated assistants that significantly improve the convenience and security of the building. One of their primary tasks is learning user behaviors through regular commands in order to automate decision-making regarding HVAC and other systems, taking into account user preferences.
It is expected that the global smart home market size will grow at a compound annual growth rate of 10.67%, resulting in a projected market volume of $231.6bn by 2028. In light of this, realtors will sell and rent more properties equipped with AI smart home systems.
Read also: Smart Home: A Complete Guide for a Connected House
AI in real estate – The future is now
Terrifying predictions of possibly replacing humans with AI are giving way to a promising outlook on collaboration between technology and human abilities. Significant savings in time and resources, new opportunities and innovations, cost reduction, and increased return on investment are just the beginning.
The time is coming when cutting-edge AI technology in real estate will become an everyday reality for most companies. MIT Sloan Management Review reports that 9 out of 10 organizations think AI will help them gain a competitive advantage, but only 35% of them use its benefits. The only thing that matters now is “first in, first win,” indicating the importance of acting promptly for success.
Are you seeking to reach the full potential of your real estate business? Start your digital transformation with Eastern Peak — book a free consultation now to find out how we can cover all software development needs for your real estate company.
Read also: