It seems the benefits of AI in real estate are largely categorized as time and cost savings. With AI, real estate professionals can elevate their game by focusing on their clients and brands, freed up from writing ad copy or managing operations. However, AI tools can, and should, do much more for real estate professionals. The latest AI tools are clever. And they know better. The best AI tools understand context, which affects their meaningfulness and usefulness. Perhaps the biggest leap forward in recent years is for the first time, technology can understand the nuances of human language. In real estate understanding context and nuance is critical, both given heightened regulatory control and the increasing need to demonstrate tangible value to clients.
Knowing right from wrong
May 2, 2024, HUD made clear what FHA compliance means for AI, marking the advent of a new phase of AI responsibilityāit must now āknow right from wrong.ā The use of AI for promotional purposes (like advertising and other promotional copy) and for targeting consumers are now officially under scrutiny, and infractions are on the users of the tools not the providers of the tools. Unsupervised AI content generation opens the door for significant liabilityāpenalties top a hundred thousand dollars after the 3rd offense.
The good newsāthere are āvertical AIā applications āpreparedā for this regulatory context, to prevent disaster and filter for safe, fair, non-discriminatory language. How bad is the need? Purlin recently ran its AI-driven compliance models on the entire active listing set of a major firm and revealed almost 1/3 of its public remarks had a potential fair housing violation.
The scary part of this equation is that text may seem innocuous even to an experienced agent, let alone an AI without any training in the nuances of real estate regulation. Promoting a āwalk-in closet,ā for instance, could be flagged as discriminatory against people with walking disabilities.
Knowing what clients are asking for (even before they do)
Not only can AI protect you from penalties, but in its full capacity for contextual cleverness it can create new value for clientsāultimately by knowing and providing what they really need. Real estate is still a relationship business based on trust, which begins with genuine, thoughtful conversations. A contextually trained AI can be a very effective starter, cultivator and sustainer of conversations clients care about and that build those relationships (and are more likely to convert them into transactions). Real estate AI without contextual awareness can stunt conversations entirely.
For example, ask ChatGPT about Olympia and you get a comprehensive report on the history and etymology of Olympia going back to ancient Greece. With a real estate context-savvy AI, a home-buying client doing natural language listing searches who asks about Olympia will get detailed information about on-market listings at the new Olympia condo development on the Upper East Side, with links to the listing agent. The clever AI response is not encyclopedic irrelevance, but answers and recommendations that are grounded in realityāmeaning actionable, real-time, localized and connected to the real-world.
The most advanced real estate AI can understand and shape the context to engage users on a higher level with personalization. For the client, this can mean finding in-market homes using only an image of a home design element or view that they like. It means an AI that makes suggestions to the agent and buyer for high-probability matches modified by evolving buyer-shopping behaviors. It means an AI that knows whatās going on specifically with a clientās transaction and the surrounding market in real time.
For the agent, AI personalization means allowing them to give their AI a personality and tone that befits their brand and humanizes interactions with clients. It means allowing them to customize their AI knowledge base to include a firmās promotion materials, proprietary listing data, pocket listings, market insights and transactional details. A clever AI will know when and how to use this information in combination with general knowledge āfrom the internet.ā It makes an agentsā real estate AI a unique and powerful vertical GPT for luring clients and recruiting agents.
Why is it realistic to think that real estate AI conversations could turn into transactions? We ran extensive analytics on over 60,000 AI conversations had on a major real estate firmās website. Sixty percent ultimately included real estate listing inquiries.
Applying cleverness in context
According to NAR, most real estate agents still do not use or see the impact of AI on their businesses today, but they will put it at the top of the list two years from now. AI is coming fast, and the market will be flooded with lookalike AI tools. Truly clever, contextually aware, real estate savvy applications will do the most to keep your business safe, fair and compliant. They will also work the hardest to create new value for clients beyond time and cost-saving by improving the real estate experience.
Purlin spent four years training tech in the nuances of real estate and FHA regulations to create the first safe, fair and contextually honest AI. Our tools mitigate the threat litigation and FHA penalties, automate non-discriminatory target development and ad creation, search listings and guide conversations safely with Natural Language AI, while fostering collaboration and client-agent interactions and recommendations.
If interested in learning more about Purlin or our technology, visit www.purlin.ai.
As of March, 2023, FHA penalty for first violation was $23,011, second, $57,527, and third, $115,054
