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Automation and emerging technologies such as Artificial Intelligence (AI) continue to play an increasing role in our daily lives. It’s no secret that technology has been replacing jobs previously performed by humans, especially in industries such as manufacturing. According to a report by McKinsey Global Institute, as many as 73 Million US jobs could be replaced by technology by the year 2030.
A 2013 study from Oxford University estimated that 50% of all jobs globally could be replaced by automation in the following two decades. Those numbers are astonishing. And, even those jobs not replaced by technology, could change dramatically over the next few years. Could the same thing happen to the real estate industry as we currently know it? If you read on, you see that the answer is “not likely.”
Purchasing a house is not like buying a candy bar or bag of chips from a vending machine. Housing fulfills a long-term essential human need. Aside from the obvious differences between the bag of chips and a house, there is far more emotional involvement with a home purchase. We view our homes as an extension of ourselves. Beyond our homes, we have an instinctual need to be part of a community. This gives us a sense of belonging to something greater than ourselves.
The home selection process triggers a potential landslide of emotions. The home purchasing process involves a multitude of steps that are carried out by many different people. And, at the center of the process, is the real estate professional whose job it is to carefully orchestrate every aspect. Respectfully stated, anyone who thinks that the services provided by real estate professionals will soon be automated either does not fully appreciate the layers of service or has unrealistic expectations about the current state of Artificial Intelligence.
The good news is that real estate agents are more relevant today than they have ever been. According to the National Association of REALTORS®, “87% of buyers purchased their home through a real estate salesperson or broker. This share has steadily increased from 69% in 2001.” Further good news is the fact the real estate agent job outlook shows a positive trend for at least the next decade. And, humans will always strive to fulfill their housing needs.
The real estate industry has already benefited from technology advancements. And, these changes have been 100% positive and career-enhancing. Veteran real estate agents have lived through these changes and can attest to how helpful they have been. Homebuyers no longer need a real estate agent to introduce them to dozens of homes. This is now easily accomplished via various Internet-based resources such as REALTOR.com. Virtual showings can take place at any time of the day or night. And, most importantly, nearly everything is remotely available through our handheld digital devices.
So, does a person who wants to become a licensed agent need to worry about getting replaced by a “robot?” I would not lose a wink of sleep worrying about it. On the contrary, newly-licensed agents can look forward to new technologies that help them deliver better services, more detailed information and analytics, and to do so more remotely. Ask any veteran agent what is was like listing and selling real estate without the use of cell phones, laptop computers and tablets, GPS and Google Maps, and Gig-speed Internet. Ask them if there’s anything to fear about technology advancements and they will likely say, “Bring it on!”
When assessing which jobs are more amenable to automation, it’s important to remember that real estate is a service-based industry. As we discussed in other articles in the NCI Blog, these services include: Advice, Advocacy, and Negotiation. Regarding advice, it can only be dispensed by a real estate professional, who is licensed in Michigan, and who is intimately knowledgeable on the subject matter.
The agent must also be able to respond to the specific client and customer questions in real time. Real estate advice cannot be given to a seller or a buyer by a chat bot. Similarly, advocacy is based on the skills of an agent who nurtures his or her client relationships, acts as their spokesperson, and champions the clients desires and needs. Automated advice and advocacy? I think not!
Lastly, negotiation is a skill-based service that can only be properly delivered by a human. This is due to the fact that negotiation requires preparation and planning based on the client's unique set of circumstances. The bargaining and problem solving aspects of a negotiator require creativity, reasoning, responsiveness, emotions such as empathy, and dynamic flexibility.
According to many engineering experts, the level of Artificial Intelligence required to match this level of human performance is many decades away. If you’re seriously worried about the competition, recall how many times you had to correct the mistakes made by the digital virtual assistant on your cell phone or dedicated home speaker. I don’t think your digital assistant is any match for the intuitive reasoning power and learning capabilities of your mind.
Success in the real estate business, like all aspects of life, is all about adapting and evolving. Seasoned real estate agents who have been licensed since the early 1990s have prospered through historic changes. They made it through homeowners whose mortgage interest rates spiked at nearly 19%. They adapted to wholesale changes in agency practices. They also found ways to build their businesses through the Financial Crises and Great Recession of 2008, and more recently, the Pandemic.
Through it all, the real estate industry and the agents who were the driving force, remained resilient and mustered the courage and resolve to adapt. As mentioned earlier in this article, automation of information aggregating and dissemination has been going on for several years. And, these changes have all worked to the benefit of professional agents and their clients alike.
Change is good. Without change, things stagnate, wither, and become obsolete. If there’s anything to fear about the future of the real estate industry, it’s not AI. Rather, it's the individual agent who refuses to embrace the positive changes going on everywhere. Here are some tips for anyone who is worried that real estate agents will “go the way of the dinosaur.”
1. Stay ahead of the curve: Take your real estate salesperson license training course from NCI Associates, Ltd. Proper education and preparation are keys to staying ahead of the curve.
2. Adjust your mindset: The likelihood of you obtaining your real estate license and generating a solid income level is a thousand times greater than C-3PO from Star Wars replacing you.
3. Create a comfort zone: Remind yourself that the world is always in motion. In fact, the fastest way to move backwards is to stand still. Acknowledging this helps maintain a level of comfort where one is no longer encumbered by concerns over change.
4. Rely on a coping mechanism: We all have periodic concerns. It’s a normal part of life. When they arise, the best coping mechanism is to focus instead on the daily structure and routine of your business. All successful real estate agents maintain consistent profitability through structure. Following a simple business plan, with scheduled periods of prospecting and lead generation, leads to profitable results. Nothing puts a smile on an agent’s face like a well-deserved commission check.
4. Savor your success: The best way to address business worries is by being successful. Highly successful people do not invest time fearing the least likely business outcomes. They do not indulge the fears of others. And, even in the face of worries, they are willing to push past them.
Whether you are just beginning your real estate journey, or have been an agent for many years, one of the most important things you can do for your career is to continuously improve your skills and knowledge. NCI Associates offers the best pre-licensing and continuing education courses in the state of Michigan. Our courses are regularly updated with the most recent information to prepare agents for the current and future real estate markets.
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However, fulfilling the promise of a successful real estate future requires the right choices at the right times. The most important decision to make right now? Where you’ll begin — or continue — your real estate training. NCI Associates, Ltd. remains your intelligent choice for Michigan Real Estate Classes.
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