AI ‘a bigger danger’ to real estate than lawsuits
A new survey finds that most brokerages and agents are using artificial intelligence tools, especially ChatGPT. But they need to watch out for the risks.
Key points:
- A survey from Delta Media shows 75% of leading brokerages and 80% of agents use AI tools.
- Real estate pros who don’t embrace it will be “left out,” says Delta’s CEO, but he warns that the industry is “unprepared for the realities of AI.”
- AI has “inherent bias” and can run afoul of regulations like RESPA.
The commissions lawsuits may have everyone's attention, but the real disruptor for the real estate industry is the rapid adoption of artificial intelligence tools, says Michael Minard, CEO and owner of Delta Media Group.
"When the industry is focused on dual agency and worrying about the DOJ, I don't think that's the danger," Minard told Real Estate News. "I think AI is a bigger danger."
To be clear, Delta isn't trying to put the AI genie back in the bottle. "We've been playing in the AI space in real estate since 2018," Minard said. Today, he says adopting AI is "table stakes" in real estate.
'If you're not part of, it you're going to be left out'
Delta Media Group, which provides real estate marketing and technology services to more than 80 LeadingRE affiliates and over 50 top-ranked brokerages nationwide, released its 2024 Real Estate Leadership survey this week showing that 75% of leading brokerages use AI tech and almost 80% reported that their agents have adopted AI tools.
The most popular use case is writing property descriptions (82%), followed by blog posts, emails and letters (67%); social media content (60%); website content (44%); and personal bios (43%), according to the survey.
Minard said while overall adoption is high, he's surprised it's not 100%.
"If I were a Realtor, if I were a team leader or owned a brokerage, I'd be embracing it and I would be leveraging it," he said. "Because I know the industry is going down this path and you're either going to be part of it or not part of it, and if you're not part of it, you're going to be left out."
But legitimate concerns about liabilities and risks can't be ignored.
"There is inherent bias in AI," he said. "We're trusting that the biases of the AI aren't bad and that they don't have ulterior motives, but we don't know that."
"I think the industry as a whole is so unprepared for the realities of AI within the industry itself," Minard said. "I don't think they understand what embracing AI means at this point."
Implications for the future of the industry
Notably, the most popular AI tool for those tasks isn't one crafted for the real estate industry. "Well over 90% were simply using ChatGPT," Minard said.
That puts brokerages at risk because general AI platforms aren't designed to follow real estate regulations. "RESPA questions aren't being discussed," he said. "We're doing some things in our platform to try to put guardrails around it as best we can."
AI will also consolidate the industry, he predicts, as the agents who use it most effectively will be able to win a larger share of deals. "We're seeing very few conversations around 'What does the real estate industry look like in 2030?' We're sitting here with 1.5 million Realtors today. Is that going to be 800,000? 200,000?"
According to the survey, only 23% of brokerage leaders say AI is used for front-office or admin support this year. But Minard said that could grow.
"What people don't realize is how mature the AI is," he said. "We're debating how far we can take it. The voice engines are so good. … We can deliver technology today where a customer can call and think they are talking to a Realtor. Would this upset normal people? How disruptive would that be? How violated would people feel?"
These are all questions, says Minard, that industry professionals should be asking.
"AI is going to be very disruptive and we're not having that conversation to understand what that looks like."