The landscape of home buying in the United States is undergoing significant transformation, USA Today reports.
Recent changes in industry regulations regarding how real estate agents are compensated have prompted a reevaluation among housing experts and technology companies. Many homebuyers, already burdened by soaring prices and closing costs, are now faced with the decision of whether—and how much—to pay for an agent’s services.
With the median home price standing at $416,700, a 2-3% commission can exceed $10,000. In a world where consumers are accustomed to leveraging technology for various tasks, entrepreneurs are seizing the opportunity to automate the home-buying process, although some consumer advocates urge caution.
Flyhomes, a Seattle-based real estate tech company, claims to offer “the world’s first AI-powered home search” tool. Since its launch in June, the home search function is designed to function like a local real estate agent, capable of addressing about 80% of common inquiries. Chief Strategy Officer Adam Hopson explains that the tool has access to vast amounts of data, allowing it to provide information on aspects that a human agent would typically need to research, such as property permits and proximity to power lines. Additionally, AI is available to assist house hunters during off-hours, such as late nights and weekends.
Modern Realty, an “AI Realtor for Home Buyers” co-founded by Raffi Isanians, believes that while the search aspect is important, the most valuable contributions from agents lie in pricing strategy and negotiations. By automating routine tasks, Modern Realty aims to enable agents to focus on these critical areas.
In Austin, a new company named Eden offers agent services on an as-needed basis, charging buyers only for the specific services they utilize. For instance, agents prepare buyers’ offers at no charge, while assistance with negotiations and closing costs incurs a fee. Eden co-founder Luke Mizell envisions a future where AI will automate every aspect of the buyer agent role, enabling seamless communication and assistance through platforms like Siri and ChatGPT.
Despite the rapid advancement of technology, some experts emphasize that the current use of AI in real estate is more about augmented intelligence than complete automation. Brooke Anderson-Tompkins, founder and CEO of bridgeAIvisory, notes that while AI has the potential to revolutionize industries, the present reality involves collaboration between humans and machines. In high-stakes transactions like home buying, the expertise of knowledgeable agents can be invaluable when challenges arise.
Sharon Cornelissen, director of housing at the Consumer Federation of America, suggests that buyers looking to navigate the process without a real estate agent might consider working with trained housing counselors or attending first-time homebuyer classes. She also warns consumers about the potential for “hallucinations”—misleading or incorrect information generated by AI tools—stressing the importance of accurate information in such a major financial decision.
Given the sensitive nature of the personal and financial information involved in buying a home, it is crucial for consumers to understand how their data will be used. Questions about data privacy are paramount, particularly as millennials and younger generations become more accustomed to sharing personal information online.
