According to Fortune Business Insight, the worldwide Artificial Intelligence market is expected to grow from $47B in 2021 to $360B in 2028. With this, it should come as no surprise how enterprises increasingly adapt to AI at a rapid rate.
In fact, findings from the 2021 survey by McKinsey & Company revealed that AI adoption is steadily increasing, with 56 percent of all respondents reporting AI adoption in at least one function in their organizations.
Artificial intelligence appears to have infiltrated every business by 2021, and real estate is no exception. AI has the potential to change the way we live and work, and now how we buy houses.
Let’s look at how effective AI can be for the future of home buying.
What is artificial intelligence (AI)?
AI is “the science and engineering of making intelligent machines, especially intelligent computer programs,” according to John McCarthy, the father of AI and the man who coined the term. These intelligent machines use computing power to discover patterns in data and are then able to perform tasks that humans would normally do.
McCarthy is regarded as a pioneer in the discipline, with Claude Shannon, Marvin Minsky, and Nathaniel Rochester. He also created the LISP programming language, in addition to AI. It’s one of the first programming languages that’s being used today.
On the other hand, software journalist Kaya Ismail defines an algorithm as a “collection of instructions,” or a method for processing data. AI takes this a step further, consisting of a collection of algorithms that can adapt and rewrite itself in reaction to the data entered, thereby demonstrating “intelligence.”
How AI is used and applied in real estate
AI is gradually changing the future of home buying and it’s poised to play a significantly more active role, beyond a site that merely lists listed properties. It is possible that AI and machine learning will have an impact on every part of the homebuying process.
AI is transforming how people search for homes
AI-based search technology can assist users in making the best decisions. Real estate marketplaces have AI property recommendation engines to assist in home buying. The AI assesses a person’s preferences and recommends the best home based on the user information.
For example, Trulia, an online real estate marketplace, leverages AI-powered personalization to enhance the search experience. The system analyzes the user’s tastes, uses computer vision to extract information from the user’s images, and gives recommendations.
AI helps to qualify leads.
Many individuals go to real estate websites just to look around, but real estate AI software can learn to recognize serious buyers’ browsing habits and propose that the agent approach them first.
Zillow, a prominent online real estate marketplace, has an AI-powered CRM that analyzes a variety of data sources to separate hot leads with genuine plans to buy from curious buyers. The system can also figure out what kind of property the person wants.
Aside from this, AI technology can quickly get the buyer’s budget, must-haves, and whether or not they’re pre-approved for a loan which are all vital for an agent.
Al assists real estate transactions and banking.
Many banks and loan providers utilize artificial intelligence to recommend mortgage products or compute interest rates. These lenders and banks can estimate credit risk based on predictive technology.
A sophisticated AI-powered analysis increases the likelihood of detecting fraud in the preliminary stages of the application process. According to the Mortgage Fraud Report, one in every 164 mortgage applications contains fraud signs. Through AI, these discrepancies can be prevented with a more accurate “creditworthiness” of the client.
AI technology and machine learning impact both our daily professional and personal lives even in home buying. As AI becomes smarter and more sophisticated, we can expect homebuying to be a smooth transaction with improved home search experience, more qualified leads, and a more secured mortgage process.