Our once physical world has gone digital. As we adapt to the increased presence and reliance on digital devices and systems, industries race to keep up with changing behaviours whilst vying to be the first to offer new technology-driven experiences to their consumers.
Business has well and truly moved online. Brick-and-mortar stores as we’ve always known them become less and less common by the day, only to be replaced by an increased focus on ecommerce offerings.
We’ve reached a point where the last remaining industries are clinging on in the war against digital, and one industry that has outlasted most others in an attempt to stay physical is the real estate industry.
Real estate agents still proudly exist on almost every high street. But for how much longer? At a time when children are growing up as digital natives, do human real estate agents face a genuine threat of extinction? Or are their roles just changing?
Let’s explore both sides of the argument.
Advantages of physical real estate agents
Personalised advice
The world of real estate can be a minefield. Whether you’re a first-time buyer, a millionaire property investor, or somewhere in between, an agent can often be your starting point when dealing with real estate.
A good agent prides themselves on understanding the market and being on top of the latest laws and legislation. As a client, this is all passed on to you. For instance, you might be interested in refinancing your second mortgage loan – a real estate agent would be able to advise on how to do this and if there are better options.
While online agents can connect you with properties and even save you money, don’t expect to receive the same level of personalised service.
Network
Often when you have access to a real estate agent, you also have access to their impressive network of contacts. You might be a first-time buyer in need of mortgage advice in London, or you might be a business looking for facilities management in Hull, you’d be surprised at just how many contacts an agent will have in the property market.
As machine learning continues to disrupt the world industry by industry, a great network is one thing AI can’t compete with.
Local knowledge
Speaking of things AI can’t compete with, local knowledge is another selling point of estate agents. If agents are to be replaced by digital or virtual agents, they’ll still be able to offer a degree of local knowledge. But physical agents will be on top of the latest news and rumours that their digital counterparts can’t compete with.
New businesses, schools and transport links opening up can have a big impact on real estate prices, and as one of their clients, you might get this news before the rest of the town. This can be particularly useful when it comes to buying or selling at the right time and price.
Negotiation skills
Agents also possess great negotiation skills and clients can benefit from this when working with them. If you’re enlisting the help of an agent to sell your property, it is their job to make sure you get the right amount of money for your property.
In a world where humans are being replaced by computers, could you trust a virtual agent to have your best interests at heart?
Could technology replace real estate agents?
Virtual tours
A large part of an agent’s day is spent presenting properties to interested buyers. Leading potential buyers through a home, highlighting the best points of the property and answering any questions a potential buyer may have is a crucial part of the buying process.
This is one part of an agent’s role that could be under threat from technology. As virtual reality technology becomes more widely adopted, we commonly transport ourselves into virtual recreations of real-life locations via virtual reality technology.
With that in mind, how long before we can transport ourselves into a property to be shown around by a virtual agent able to answer our questions in real time?
Decentralised property market
AI isn’t the only emerging technology currently disrupting the world. Web3 and blockchain technology are also becoming increasingly disruptive to businesses, and many industries that operate with the help of ‘middlemen’ are believed to be most under threat from decentralised technologies.
That’s because decentralised alternatives are tackling issues around ownership and providing new solutions around the transfer of ownership from one party to the next. In a nutshell, this is a large part of the agent’s job – to facilitate the transfer of property from the buyer to the seller.
Blockchain-shaped real estate platforms could offer a way to sell real estate without the need for an intermediary. Instead, using distributed ledgers and NFTs to track, verify and automate the sale of properties.
As such, this puts traditional real estate platforms under threat along with ticketing platforms, art marketplaces and any other industry dealing with a transfer of ownership.
AI advice
As already discussed, agents are great when it comes to local or personalised advice. But there’s a limit to how much data humans can process. A limit that doesn’t apply to technology such as ChatGPT.
Generative AI can process vast amounts of historical data in an instance, it can also identify trends based on past data far quicker and more accurately than most humans.
When comparing physical agents to virtual agents, something humans can’t compete with is AI’s ability to use this data to predict the future. When applying the implications to the real estate industry, could the future involve virtual agents who can make predictions about future house prices, market conditions, mortgage rates and location-specific claims?
Conclusion
Real estate agents, like most other roles, are under threat from the emergence of new technologies. In the short term and immediate future, agents definitely still have a place in our world, especially with older consumers who have yet to adopt new solutions.
However, in the mid to long term, homeowners will grow up with this new technology. Using web3 solutions and AI will be second nature, and the benefits of both are expected to grow exponentially. With that comes an increased threat to real estate agents and those working in the real estate sector.
This doesn’t mean every real estate agent will find themselves without a job. Industries have always changed and will continue to do so. On the other hand, workers have always had to adapt and they’ll also continue to do so.
For consumers, they’ll likely reap the rewards of new technology, more efficient solutions and cheaper prices.