How AI can be used to streamline work in residential real estate transactions

Professionals across many industries are using AI technology to reshape what they are capable of, and real estate is no exception. 

Residential real estate professionals like realtors, attorneys, and more  are already starting to integrate AI into their everyday work to streamline tasks and improve the quality of their workflow.  

There are a vast amount of applications for AI in real estate, with uses ranging from generating copy a’ la Chat GPT, to analyzing legal documents and producing staged photos. 

Let’s take a look at some examples of how AI can fit into the residential real estate arena.

What is AI?

Let’s first quickly define “AI,” a term that gets thrown around in a lot of variety of contexts.

Artificial Intelligence (AI) is technology that enables computers and machines to perform tasks that usually require human intelligence, like understanding language, recognizing images, or making decisions. It "learns" from data to improve its accuracy over time, making predictions or providing insights based on patterns it detects.

There are different types and subsets of AI that perform different tasks, but we’ll just briefly highlight a few here. 

• Traditional AI uses predefined algorithms and rules to perform specific tasks or solve problems. Traditional AI is used in environments with clear, structured problems but lacks flexibility in less defined scenarios.
• Generative AI creates new content, like text, images, music, or even code, based on the patterns it has learned from existing data. Generative AI can also summarize information and answer questions. Unlike Traditional AI, Generative AI can easily adapt and learn from new data and situations. 

How can AI be used in the residential real estate industry?

There are many applications for AI in real estate — marketing, customer service, predictive analytics, document review, the list goes on. In many cases, AI can be helpful with quickly completing grunt work that would normally take a human longer to accomplish. 

1. AI Virtual staging photos 

Producing staging photos for home listings can be an costly and inefficient process for realtors. This typically involves hiring a home stager and hiring a professional photographer. Some companies use traditional “virtual staging” photos in which hired photo editors can edit furniture into photos, which can also become costly.

Now, there are products like AI HomeDesign and Adobe’s Stager that offer AI Virtual Staging, allowing realty companies to produce fully staged photos after uploading photos of vacant spaces. And unlike with traditional staging, these photos can also be changed and customized based on a buyer’s preference. 

Examples: AI HomeDesign, Stager

2. Client Relationship Management and Virtual Assistants   ‍

AI-powered virtual assistants are able to help realtors and other professionals with scheduling, engaging and communicating with clients, and information management. 

AI-powered virtual assistants can engage potential clients through websites, answering common questions, gathering essential information, and qualifying leads based on criteria like budget, location, and property type. 

AI virtual assistants are also able to give clients answers to frequently asked questions any time of day, and follow up with potential clients or help with retention by reaching out to clients post-transaction. 

Examples: Lofty, Follow Up Boss

3. Contract Analysis and Review

AI tools can assist with reviewing contracts and legal documents, quickly identifying key clauses, potential red flags, or missing elements. 

Using natural language processing (NLP), AI systems can scan contracts for crucial information, such as payment terms, contingency clauses, and deadlines, flagging any unusual or conflicting terms. This allows realtors and attorneys to ensure that contracts meet regulatory standards and protect their clients' interests without the extensive time typically required for manual review.

Examples: Kira Systems, Luminance

4. Neighborhood Insights and Lifestyle Matching 

By analyzing data on neighborhood amenities, schools, commute times, and lifestyle factors, AI can helps match clients with neighborhoods that best suit their needs. This level of personalization helps agents provide a more tailored buying experience, as they can present clients with options that align with their lifestyle preferences.

Examples: Local Logic, Place Intelligence

5. Accurate Property Valuations

AI can enhance property valuations by analyzing extensive data sets to provide more accurate and current property value estimates. 

AI-driven valuation software considers factors like recent sales, neighborhood trends, property features, and economic indicators, allowing real estate professionals to offer clients up-to-date, data-backed valuations. 

Unlike traditional methods, AI algorithms can identify subtle patterns and shifts in local markets, giving a more dynamic picture of property values and helping agents, appraisers, and investors make informed decisions.

Examples: House Canary, Clear Capital

Conclusion 

AI in residential real estate sales can streamline tasks, provide better data for decisions, and personalize the experience for buyers and sellers. 

Each business has to decide if using AI for them is best for them, as there are always risks and cons with reliance on technology. 

But nonetheless, given how rapidly this technology is trickling into everyday life, it’s good for real estate professionals to start thinking about how to leverage AI.