March 2018

Arm Wrestling with Artificial Intelligence
(3 Steps to being a Relevant Realtor in a Changing Market)

I was reading an article the other day that led with, “Millions of workers around the world are at risk of losing their jobs to robots or A.I. (Artificial Intelligence), but it’s Americans who should be particularly worried.”

At first, I didn’t pay much attention to the daunting statement because my area of expertise is Real Estate, not retail or production; and last I checked, my two metal hips haven’t added a single contribution to the closing of any deal. However, as I dove deeper into the read, the threat of A.I. and job security peaked my curiosity when the article informed me that, “thirty-eight percent of jobs in the U.S. are at high risk of being replaced by robots and artificial intelligence,” according to a new report by PwC.

I must confess, I have never thought of myself as a Rocket Scientist. That’s why I never imagined that a robot or A.I. could take my place of selling homes in my local market. That is until now. And here is why I’ve changed my opinion.

If you look at our industry through a traditional lens, our formula for success has been based on a three-fold foundation. 1) The development of personal relationships 2) The alignment with the right firm and a professional, branded image 3) The occasional mano-a-mano “farming” turf war to prove we are the most qualified agent in the area, due to the excessive saturation of realtors in the majority of zip codes.

So, how is it that A.I. could possibly infiltrate our human bubble?
The answer is it already has. Meet Zillow, Realestate.com, and Trulia: The Artificial Intelligent “Realtors” of the future.

Before you panic and move to an aluminum covered bunker, let me assure you that Real Estate A.I. replacement will not happen overnight. Life-like robots and in-home cameras that replace live showings are not yet here. But let’s not be like my good friend and uber successful buddy *Steve (named changed for the sake of long term friendship), who years ago told me not to waste my time with this thing called “The Internet”. He claimed it would never last. More than likely his comment was made out of fear. Fear of change. Fear of the unknown. Fear of having to learn to embrace something new into our often “routine” lives.

In 2018, the reality for most industries is that A.I. is the wave of the future. Most people today will consider buying a home without an agent but only a very small percentage of all closed transactions are completed without the services of a real estate agent.

Technology is advancing at stunning rates, and giants like Zillow and other on-line entities are continuing to develop systems and programs that put them in direct competition with the services we offer our clients. Add to it that clients are learning to shop not just for homes, but for everything in new ways, and all signs point to the fact that if we don’t pay attention to what is happening, we will soon be irrelevant Realtors. The question then becomes, how do we maintain being a Relevant Realtor in light of the emerging A.I. giants?

 

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Relevance (n): “Being connected to the current time. Of contemporary interest. Important to the matter at hand.”

“Realtors should be worried about their relevance. If they are no longer relevant, they may not keep their job. Someone without relevance might be called “irrelevant.”
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3 Steps to Remaining a Relevant Realtor

1. Remember that A.I. or Zillow cannot Define Value:
My father, who was both an attorney and one the smartest guys I’ve known, always told me “Son, a little bit of knowledge is very dangerous.” His point was that disseminating or depending on information can be dangerous, when we rely on “it” to be the expert opinion.

As a Relevant Realtor, you must remember that though Zillow is a giant company, it by no means is an entity that can define value. By its own admission, Zillow states that their ZEST-imates are right only 40% of the time. And by “right”, they mean properties selling within 5% of their ZEST-imate. This means that 60% of the time, their ZEST-imate is wrong. (Zillow 2015)

As well all know, properties and their respective valuations are not solely driven by data. Therefore, as a Relevant Realtor, you have an advantage that A.I. does not, which is articulating the subjective and objective value and assessment of properties.

Score Card: Human Realtor: 1. A.I.: 0

2. Remember that Alexa Cannot Hold your Clients Hand:
Buying or selling a home is never a nerve-less process. As we’ve all experienced, clients come in many packages with various personalities and visions for their ideal property. Some buyers want a home on the water. Some want a home in the woods. Some care more about the bottom line of the deal. Others want to know how the roses in the yard were planted. All however have one thing in common- they all are putting their earnings and dreams within the transaction we are helping navigate.

As a Relevant Realtor, no matter how advanced technology becomes, clients will always need a human hand to hold through the stressful process. Meaning, clients will always need our calming guidance and advice when the world of mortgage or inspections becomes overwhelming. They will always need our hawk eye of protection over all points of the deal. They will always need our patience and assurance if the deal goes into a stall. And they will especially need our caring and comfort if the deal falls out of escrow and they see their dreams crash with it.

The reality of our industry is that no matter how much technology advances, human buyers and sellers still need a human Realtor; as last I checked, asking Alexa for comfort before the close of the deal is no less soothing than shaking a Magic 8 Ball to see how your kids will end up in life. It still takes a hands-on Realtor, not A.I. robots and systems, to calm a buyer’s nerves.
Score Card: Human Realtor: 2. A.I.: 0

3. Remember that Siri is Not Always Available; and she has No Moral Code.
I recently bought myself a new car. I was in route to an important meeting and needed Siri to provide me with a quick piece of information. I pushed her button, stated my request, and in turn she flashed her iridescent “thinking” line, then disingenuously said, “I’m sorry. Something seems to be wrong. I cannot help you with that right now.” And with that, our conversation was over.

Ah, yet another Relevant Realtor advantage – The ability to be available to our clients. This means being available with your time, available with your information, available with industry facts, available with answers, and most importantly, available with something that Artificial Intelligence can never provide, which is an Integrity Code of Conduct that does in fact care about the needs of your client.

Final Score: Human Realtor: 3. A.I.: 0

As our industry heads towards a technology based future, I do highly recommend staying current on all the latest trends. However, to maintain your relevance as a professional realtor in your area, remember we are not in an arm wrestling match with A.I. Instead, online services are here to provide us with extended tools to simplify our lives and expand our awareness. Today, Relevant Realtors remember that at the end of the day, the winning move happens when we show up as the best human version of ourselves, and then do what we know how to do best, which is to service our clients, both professionally and personally with soul.

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