Artificial intelligence is set to disrupt industries of all sorts, and threaten a lot of jobs, but don’t expect your traditional real estate agent to be replaced any time soon by a homebuying bot.
Bridget Frey, chief technology officer at Redfin, spoke on a Seattle Startup Week panel about AI and real estate and said that real estate agents, and the institutional knowledge they bring, should always play an integral role in the homebuying experience. Redfin, she said, learned early on that algorithms and programs that left humans out weren’t popular within the real estate community.
“We need our algorithms to work hand in hand with all those folks,” Frey said. “We’ve found that our algorithms work better when we leave a place for a human to be in the loop, and I think that’s where the direction needs to go.”
Redfin’s mission is to transform the homebuying process using technology to eliminate troublesome points. Frey, who has been with the company for six years and founded the company’s analytics division and headed up its early big data and machine learning projects, painted AI as a tool for agents. It helps automate some of the more mundane parts of their days, allowing them to focus more on working with their clients.
“What we’ve seen is as we’ve automated pieces, our agents can actually spend more time providing personal service,” Frey said. “That is the direction that our whole economy is going toward, this service economy.”
However, as technology automates parts of agents’ job and makes them more efficient, it seems inevitable that there will be fewer agents. According to the U.S. Bureau of Labor Statistics, there were 192,690 real estate agents and brokers throughout the U.S. in 2016, with thousands more working in other real estate sectors such as property management and appraisals. Redfin itself has more than 1,000 agents across the U.S. The possibility of some of those jobs going away is a scary one for the real estate industry, but an AI-assisted agent can be more efficient and a greater asset for the customer, the panelists said.
“You take something that is done by humans for a long time, and then you find out that AI can really automate a lot of that process for you, and then one agent can become as productive as 100 were before,” said Devyn Cairns, co-founder and chief technology officer of CityBldr, a Seattle startup that uses AI and data to figure out how to maximize property values.
As AI becomes even more prevalent and continues to play an even bigger role in the homebuying process, the duties of agents will likely change, the panelists said. Homebuying is an inherently emotional experience for many people, something that AI can’t yet capture. Whether a deal makes sense sometimes is overwhelmed by the buyers’ feelings.
Frey, the Redfin CTO, said real estate agents will have to shift from focusing on the whats — what homes are available, and what should a buyer do to best rival bidders — to the why. Why should someone buy a specific home?
“We have to invite the algorithm into the living room to sit on the couch with the agent and the customer and be part of the conversation,” Frey said.