When my grandfather emigrated from Poland, like so many immigrants of his day, he arrived with very little. Eventually, he managed to make a comfortable life for himself and his family, but he continued to see the New World through the lens of the Old.
Every so often, he would reprise that point of view with one of his favourite expressions. When he came upon a neighbour polishing a fancy new car in their driveway, he would say, “Is the car for you, or are you for the car?”
It was his way of warning his friends not to become so enamoured with an object that they fail to see when they’ve become a servant to it. Lately, I’ve been thinking about my grandfather and his signature expression as the real estate industry, and every other industry, tries to get its arms around artificial intelligence.
Learning Without a Net
Let me be clear: I fully believe that an enthusiastic embrace of AI, from the C-suite to the reception desk, is necessary today. But I also believe we’re in a moment in time where we know AI will change our business; we just don’t know exactly how.
One reason for this is that AI is different from any other technology that has descended upon the real estate industry, in that we’re figuring it out at the same time as the rest of the world. Typically, when it comes to technology, real estate is years behind. So, while it’s exciting to know that we are now moving at the pace of business (and sometimes even setting that pace), it also means we no longer have the luxury of learning from others’ successes and failures.
Today, AI tools are being created for everything in our industry: to communicate with clients, set up showings, assist in negotiations, write contracts, manage escrow, and so on. Brokerages and agents are also spending a lot of time experimenting with what works for them and what doesn’t. Ultimately, I believe that to succeed in leveraging AI, brokers and agents must approach the task with these three guiding principles in mind.
Principle 1: Audit Before You Automate
First, we must focus on our own processes and operations to understand what should be optimised and how. We must look at all facets of our business: client-facing, agent-facing and back office. AI may enhance some functions, replace others and have no impact or a negative impact on others still. But if we don’t know where we excel and where we need improvement, then we won’t know where to invest in AI or how it will pay off for us.
Principle 2: Do The Maths
Second, we must work to understand our business challenges computationally. Last summer, Columbia professor Josh Panknin, director of real estate artificial intelligence research and innovation, gave a presentation in which he said the computer can solve just about any problem if you can structure the problem computationally and input the necessary data.
We see this at play in the move-propensity software that agents are deploying to see which of their past clients are likely to move soon. The problem (past client hires new agent because their former agent didn’t reach out at the right moment) is computationally solvable. Likelihood of moving equals some factor of time in current residence; age; change in job status; income; change in family composition; online search activity; social media activity; etc.
Brokers and agents who think about challenges computationally will have greater success identifying and implementing AI solutions.
Principle 3: Automate the Routine, Elevate the Relationship
Finally, we must reinvest the time and money we save with successful AI deployment to further enhance our value and grow our business. Jim Olson, the CEO of American technology firm Lantern, recently told a gathering of real estate advisors that AI utilisation itself is not the differentiation that agents must seek.
Olson said agents who don’t master AI to perform basic administrative and marketing functions, such as managing their calendars and producing collateral, will soon fall behind. The agents who surge ahead not only will master AI tools; they will also leverage the reclaimed resources to focus on the differentiating factors that humans excel at far more than machines: understanding nuance, managing emotions and nurturing relationships, to name a few.
In the very near future, AI will be working for these agents. The other agents will be working for AI.
About the Author: Gavin Swartzman is the new president of Christie’s International Real Estate, the global luxury brand and network comprising more than 100 independently owned brokerage firms more than 50 countries and territories around the world.