The rise of PropTech and Robots in Real Estate. Can they replace human connection?
By Barry Money, Chief Executive Officer, The Real Estate Institute of South Australia
The rise of the machines in real estate is obvious in Australia. According to the PropTech Association Australia, there are over 600 PropTech businesses in Australia alone, and the industry is rapidly growing, with an explosion of start-ups in the last three years, thanks in part to COVID-19.
The Property Council of Australia highlights the use of robotic process automation (RPA) to automate manual, repetitive and rules- based processes. This has radically transformed many back-office functions in Australia’s real estate and property management industries.
By late 2016, US$1.8 billion had been invested in real estate tech start-ups in the United States, and this has not slowed since.
But what about robots completely replacing real estate agents? Fortunately, that appears to be extremely unlikely. In fact, it could be the inverse.
Human connection in real estate is irreplicable. Purchasing, selling, and renting real estate is an emotional experience. For most people, it is the largest financial transaction they will ever make. Most people want to be able to look a human in the eye and decide whether they trust them to assist them in making such a big decision.
A great agent is more than just someone who is well-organized, pays attention to detail, and responds quickly to clients. He or she is also excellent at establishing and maintaining a strong and authentic human connection, providing an exceptional customer experience, and possessing knowledge of their specific market.
When attendees at the INMAN Connect 2018 session on automation and robots in San Francisco were asked if they would let a robot negotiate the sale of their home, the importance of such human connection became clear. The answer was a resounding "no." When asked if they would allow a robot to prepare all of the background material, check the data, manage the paperwork, and coordinate the grunt work so that the agent could focus on the buyers and sellers, supporting the relationships, and ensuring that the negotiations went smoothly, the response was "absolutely."
In this day and age, agents have the opportunity to reap the benefits of both worlds. To use technology to improve the services they can offer while continuing to do what they do best: build relationships.
In fact, they are now required to do so. Agents who do not embrace modern technological changes while providing authenticity and human connection will be replaced. Not necessarily by robots, but by other agents who use technology to their advantage to increase efficiency while maintaining their values and credibility.
By incorporating technology and AI into their workplaces, agents can delegate some of the more routine tasks, such as responding to initial inquiries, scheduling viewings, and even developing promotional materials and social media marketing. The application of technology in this manner greatly benefits agents. It enables them to save time and even broaden their reach. A virtual property tour, for example, is a huge convenience for prospective buyers with busy schedules, or – as we all know here in SA – those interstate and overseas investors.
However, the assistance of robots should not, and is unlikely to, go so far as to supplant all of an agent's roles and responsibilities. REISA agrees with Robert Reffkin, CEO of New York-based real estate brokerage Compass, that "agents are critical to transactions and will always be." An agent can hand over the list of client questions to their bionic colleagues, but a human must step in when a deal is ready to be made.
Even as AI advances, the role of a human agent remains critical. The New York Times profiled "Luke," an AI-powered chatbot from the start-up RealFriend that searches dozens of real estate databases to generate personalised recommendations. The bot even makes specific recommendations for amenities. Luke, on the other hand, is unable to complete a real estate transaction. The transaction must still be handled by an in-person real estate agent. And, while Luke's ability to find apartment listings and make recommendations exceeds that of any human, he is not without limitations. He still can't tell you if there's a bad odour in the kitchen or if the apartment doesn't look like it does in the photos.
No matter how hard we try, video chatting, virtual tours, automated responses, and even the most sophisticated artificial intelligence cannot replace an in-person relationship with a real estate agent. So, rest assured that real estate agents who adapt to use technology to their advantage while providing exceptional customer service and transparency will coexist and even thrive with the rise of the machines.