Real estate agent and reality TV star Ryan Serhant.
Newspix
Real estate has historically been slow to modernize, but AI is changing that. The integration of artificial intelligence is changing the way buyers and sellers interact with agents, fundamentally changing the competitive dynamics in the industry.
As AI reshapes a real estate agent's day-to-day operations by automating tasks – from creating property listings to conducting neighborhood analysis – the agent's focus will shift to day-to-day activities.
Ryan Serhant, CEO of Serhant and reality TV star of “Owning Manhattan,” says AI is already less about access to information and more about the broker building deeper relationships. He predicts a shift in thinking is coming as agents embrace AI while being forced to find new ways to differentiate themselves in an increasingly competitive market. “If we all use AI and have the same level of expertise, who wins? It’s the game of attention,” Serhant said last week at the CNBC Evolve AI Opportunity Summit in New York City.
Buying a home is the single largest investment most Americans make in their lives, making real estate a business where greater success can be achieved through a more personal touch from the agent. Serhant says that the big advantage he sees in using AI is that the real estate agent has more time to personally take care of his customers.
“The product in sales is no longer just the capability,” Serhant said. “It’s attention to skills.”
His own company, Serhant, has developed a sales force automation service called Simple to handle day-to-day customer relationship management tasks that typically take up over 60% of agents' time.
AI tools are used to optimize lead generation, automate marketing campaigns, and provide predictive analytics to identify opportunities. However, this does not replace the crucial role of the agent in delivering excellence. Serhant says AI won't virtualize relationships, but for real estate agents who embrace the AI revolution — which he says is a necessary step — it will strengthen their relationships.
When access to real-time market data and sales insights is less burdensome, small boutique firm brokers may be able to compete on a more equal footing with larger real estate firms. “There is a trust factor in sales. … It’s not about who is the biggest, but who has the most power,” Serhant said.
Serhant said this will also benefit home buyers and sellers as there will be a greater choice of suitable agents with improved personalized services and a greater focus on the customer.
The real estate industry is still in the early stages of adopting AI and understanding among real estate professionals is still low, but the interest is there. According to JLL Technologies' 2023 Global Real Estate Technology Survey, generative AI was ranked among the three technologies expected to have the greatest impact on real estate in the next three years. However, the survey also found that real estate professionals have very little understanding of AI compared to other technologies.
According to Serhant, agents who understand how AI can empower their businesses will have great opportunities to gain significant market share in the next 20 years.
No technological innovation is without risks and wire fraud remains a major challenge for the real estate industry, exacerbated by AI. The FBI reported a sharp year-over-year increase in cybercrime losses from wire fraud in 2023, driven largely by real estate transactions. Improved artificial intelligence technology makes it easier for real estate fraudsters.
Fraud can't be ignored, Serhant said, but he believes real estate will adapt to the risks associated with new technologies in the same way the business has in the past, such as with digital offerings. “With every advancement in technology, stricter rules are being introduced that can help stop these counterfeits,” he said.