Challenges with AI in Real Estate

Artificial Intelligence (AI) has become an incredible force in many industries, specifically in real estate. Its integration into our profession promises enhanced efficiency, improved client interaction, and streamlined processes. However, as with any technological advancement, challenges arise that must be reviewed. Having attended numerous workshops and conferences on AI in real estate throughout 2024, I’ve gained valuable insights into its capabilities and limitations. Below, I’ll explore key areas where AI is making an impact—and where it still falls short.

AI in Virtual Tours and Floor Plans

One exciting application of AI is in creating virtual tours and floor plans. Products like Cubicasa have introduced AI-driven tools that allow brokers to generate floor plans from simple walkthrough videos in under five minutes. While the technology is undoubtedly impressive and has drawn more attention to my listings, accuracy remains a significant issue. For instance, in a recent experience, a seller pointed out inaccuracies in an AI-generated floor plan, highlighting that key room dimensions were incorrect. Quoted directly from his email..."Probably do not want to use this for any marketing because I already see inaccurate calculations, the 2 front bedrooms are wider than 8'2" and 8'10". Please use the floor plans that I sent you from the past appraisal, not these, and don't share with anyone these AI-Generated plans." I respected his wishes stating that the technology and the user of the data may still need some work.

This feedback underscored an essential fact: while AI can enhance efficiency, its limitations can affect credibility, especially when dealing with analytical clients. In this case, I reverted to a traditional floor plan from a prior appraisal, ensuring accuracy and client satisfaction.

AI in Customer Relationship Management (CRM)

Customer Relationship Management tools have long used AI to improve communication between brokers and clients. The evolution from basic automation to more advanced AI systems has been remarkable. A noteworthy example is the introduction of AI 2.0, which incorporates empathetic responses during interactions. Unlike its predecessor, AI 2.0 can adjust its tone and phrasing based on the emotional context of the conversation. At a recent conference, I witnessed an AI tool demonstrate its ability to express condolences before transitioning back to a professional dialogue—a striking improvement over earlier versions. Despite these advancements, brokers still need to skillfully integrate AI with personal expertise to build genuine connections and avoid over-reliance on automation.

AI for Compliance in MLS

Multiple Listing Services (MLS) have also embraced AI to ensure compliance with regulations. For example, AI tools are now used to flag violations and assess fines for non-compliance, such as improperly displaying offers of compensation. In regions like Spokane, this has been critical in navigating new regulations following the National Association of Realtors (NAR) settlement. In Seattle, the (NWMLS) uses AI to find fair housing violations written into marketing remarks. On a recent AI check, the words "family" and "master" popped up and the broker had to connect with the NWMLS to correct these words to make it compliant with fair housing words. While these systems offer efficiency, they also introduce challenges. AI’s rigid adherence to rules can sometimes miss the nuances of specific cases, requiring brokers to remain vigilant and proactive in understanding compliance standards.

Social Media and Marketing Challenges

AI has revolutionized social media marketing for brokers, making it easier to scale efforts and maintain a consistent online presence. However, over-reliance on AI can lead to generic or impersonal posts that fail to resonate with audiences. Authenticity remains the most important, and clients often look for human-sounding content like stories and reels over overly polished AI-generated posts. Also, AI struggles to capture hyper-local nuances and colloquial expressions, which are vital in real estate marketing. While AI tools can draft persuasive content, brokers must refine and personalize it to reflect their unique voice and local expertise.

Conclusion

The adoption of AI in real estate offers immense potential but also demands careful navigation. From virtual tours to CRM tools, AI enhances efficiency and expands capabilities, yet it requires brokers to remain mindful of its limitations. Accuracy, empathy, and authenticity are areas where human expertise remains indispensable. As AI continues to evolve, balancing its benefits with a personalized, client-focused approach will be key to leveraging its full potential in the real estate industry. By acknowledging both the opportunities and challenges of AI, brokers can ensure it serves as a valuable complement to their expertise rather than a substitute.