Real estate agents are turning to artificial intelligence to boost sales

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CIOs at some real estate companies are adopting artificial intelligence tools, in part designed to help agents close deals faster, which can be helpful in modern hot housing market

While selling and buying homes remains an agent-driven business, IT executives say such tools can expand their efforts, especially in the marketplace. record prices as well as tight inventory

“AI can play a significant role in simplifying and automating processes that have traditionally involved humans,” said Rizvan Akhtar, CTO of the company’s business technology division.

Realogy

Holdings Corp., which owns brokerage brands including Coldwell Banker, Corcoran and Sotheby’s International Realty.

Artificial intelligence efforts in the real estate sector are benefiting from advances in cloud computing and data analytics, as well as algorithm improvements, according to technology leaders Realogy.

Compass Inc.

as well as

Zillow Group Inc.

According to Mr. Akhtar, Realogy uses over 25 artificial intelligence models, including models that can help agents predict their chances of converting a potential customer into a paying customer, as well as other models that can predict the optimal percentage between broker and agent. property.

The company is in the early stages of testing an artificial intelligence application that aims to predict when certain milestones in the home buying process will be reached, he said.

At real estate brokerage firm Compass, an artificial intelligence-powered tool that predicts whether people in an agent’s contact database will sell their homes within a year has resulted in more “listing winnings” for its agents, said Joseph Sirosh, the company’s CTO. In the second half of 2020, he said, the tool’s recommendations resulted in a 94% higher “win rate” than properties that were not identified as likely to sell. The technology was released last summer.

Joseph Sirosh, CTO at Compass.


Photo:

Compass

Agents speak directly to people identified by the tool as the most likely sellers. Traditionally, agents knock on doors, rely on word of mouth, and call to meet with potential clients, Sirosh said. “Agents save time when they are much more targeted,” he said. The model takes dozens of variables into account to make a prediction, including how often homes are sold in the region, what the last sale price was and how much the home has gained over time, he said.

Realogy offers agents a similar tool.

Mr Sirosh said the coronavirus pandemic has led to an active use of artificial intelligence tools among agents. In the midst of the pandemic, “agents couldn’t work without technology, which meant that everything related to technology, such as artificial intelligence for efficiency, became incredibly useful,” he said.

Online real estate company Zillow recently announced that its Zestimate tool, which estimates the market value of a home, is based on a neural network that learns on its own and accounts for hundreds of millions of data points. According to Stan Humphries, the company’s chief analyst, data ranges from home size and unique features to location and how the property differs from the surrounding homes.

Zillow recently announced an update to its Zestimate tool.


Photo:

Zillow Group

A neural network is a branch of artificial intelligence that aims to mimic the way the human brain learns.

However, AI-based models cannot accommodate human intuition or empathy. Buying and selling a home is “a very emotional and very risky transaction,” according to Mr. Humphries. “People will always want another person, an expert, to help them in this process.”

AI can gradually add value to agents, but real estate will always be a largely people-centered industry, said Mike DelPret, a local real estate technology scientist at the University of Colorado at Boulder. Real estate companies sometimes advertise their technology and artificial intelligence prowess to attract agents, DelPrete said. But the extent to which agents will actually adopt AI and other software tools is unclear, he added.

“More and more people are talking about artificial intelligence in real estate as a hallmark … but in practice it looks more like a marketing slogan,” said Mr DelPrete.

Write to Sara Castellanos in sara.castellanos@wsj.com

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