How AI Is Being Used in Real Estate: Use Cases and Best Practices

AI in Real Estate is used for a variety of tasks, including AI underwriting, document management and abstraction, advanced search, smart property matching, customer service, property valuation, market analysis, lead generation, etc. AI-powered proptech solutions can help real estate agents and brokers save time and money and make more informed decisions. AI adoption by big real estate companies like Redfin, Zillow, JLL, and CRBE has been returning vivid outcomes which we will also talk about in this article.

AI Virtual Assistants

The first thing that springs to your mind when you hear the question “How is AI being used in real estate?” must be “chatbots.” They are on every website, mobile app, and even your social media. AI chatbots have become omnipresent with the wide adoption of Natural Language Processing technology.

AI Chatbots for Real Estate Marketplaces and Platforms

Major marketplaces have integrated AI chatbots directly into their websites to provide 24/7 customer assistance. These virtual agents can answer basic questions from potential buyers or renters around the clock. Some chatbots are even programmed to schedule viewings automatically based on a user’s inputs.

For example, AskRedfin is a chatbot that serves Redfin users as a conversational assistant to get information on local home listings, neighborhoods, and market trends without having to wait for an agent to respond. Redfin has found that 93% of Ask Redfin users return to the Redfin app within a week and use it near-daily during that period. It shows how AI chatbots can boost platform engagement when they are not positioned as human replacements but as convenient digital guides.

AI Leasing Assistants

AI leasing assistants have taken digital leasing to another level. For example, advanced solutions like the one presented by Lethub can have natural conversations, screen applicants, verify identities and income, as well as eSign leases – completely digitizing the leasing process from start to finish.

Lethub AI Leasing Assistant Capabilities

Property Management AI Chatbots

Property management is another area where AI is being used in real estate for 24/7 support, process optimization, and dealing with resident inquiries and service requests. Multifamily AI chatbots are especially popular because residents find them more convenient than phone calls or emails, and the chatbot data helps property managers save time and improve customer service over time.

For example, Appfolio, a company that specializes in property management, has developed its own chatbot called Lisa which acts as an AI leasing assistant when necessary. AI-driven chatbots can manage up to 80% of tenant inquiries without human intervention.

Brokerage Productivity AI Chatbots

JLL GPT for CRE is a complex approach to how to use AI in real estate, particularly for the commercial sector. This large language model (LLM) is trained specifically on high-quality CRE-related data. Initially available to JLL’s 103,000 employees, it enhances their ability to deliver faster, smarter insights through converting static dashboards into dynamic chatbot-style interactions. This technology is already bringing tangible results for JLL in terms of space utilization, enabling more efficient and effective management of real estate assets.

AI for Document Management

Real estate is one of the most paper-heavy industries and handling all the necessary documents consumes a lion’s share of time. So, how to use AI in real estate to optimize the document workflow?

Lease Abstraction

Creating lease abstracts with AI is much faster than rereading an over-50-page commercial lease agreement only to fill in a basic table with some content. AI can analyze lengthy lease agreements and make comprehensive summaries that are called abstracts, so future tenants clearly understand all terms and conditions.

For example, CRBE, a global leader in commercial real estate services and investments, has adopted an AI tool for lease abstraction, reportedly saving up to 25% of a broker’s time on lease management tasks.

Intelligent Document Processing is the way out of the sticker shock. The Ascendix team has developed an IDP framework that can cover all needs of real estate professionals when it comes to dealing with paperwork, from categorizing the documents, bulk actions, and data extraction to creating comprehensive summaries and AI data entry.

Document Abstraction | AscendixTech

IDP tool based on our framework can handle different types of documents, from lease agreements, contracts, and appraisal reports to invoices and mortgage documents. It supports different formats like PDFs, RTF, XLS, spreadsheets, and others. Also, you can automate data entry to your existing system since the tailored tool will be perfectly compatible with it.

AI for Appraisals

AI property valuation systems make precise estimations based on an enormous amount of data, including property conditions, location, neighborhood, environmental factors, crime rate, etc.

Property Valuation for Marketplaces

One example of how to use AI in real estate is AI property valuation. When Zillow first introduced Zestimate in 2006 it was a groundbreaking innovation. It remains the most advanced model with a 2% error rate, but now everyone can get a property valuation tool powered by the latest AI technologies.

Zestimate, Zillow’s AI Property Valuation Software | Image Credits: Zillow

Property Valuation for Mortgage Brokerage

Not only marketplaces and real estate agents can benefit from it, but any firms and professionals that deal with apprising regularly. For example, Quicken Loans relies on its QL Property Hub to estimate the property value during the underwriting process and reported significant lease processing time reduction.

AI for Underwriting

Underwriting is the most time-consuming and meticulous process in mortgage lending, so automating this process at least partially is another groundbreaking approach to how to use AI in real estate.

For example, in the spring of 2024, Rocket Mortgage, a global leader in this industry, announced the rollout of its AI-powered platform Rocket Logic. This system automates the analysis of 70% of documents (over 5,000 hours for underwriters saved) and 90% of financial details extraction (additional 4,000 hours). Such a significant optimization has allowed Rocket Mortgage to keep its leadership in the industry by closing deals 2.5 times quicker than competitors.

Rocket Mortgage Interface

The combination of AI underwriting and intelligent document processing is another effective way to use AI in real estate. There are already many off-the-shelf tools and software on the market, but you can always build your own custom AI solution with the help of an experienced service provider.

How Generative AI Is Being Used in Real Estate?

Generative AI enables the creation of text, videos, images, and even marketing materials based on already available examples.

Generative AI for Property Marketplaces

In the summer of 2024, Coldwell Banker added generative AI to the Listing Concierge platform to automate the generation of listing descriptions, image captions, and property attributes. Agents who use Listing Concierge close on average with a 2.4 percent higher commission rate, Coldwell Banker Realty noted.

AI Document Generation for Real Estate Professionals

Document generation is one more time-saving way to use AI in real estate. Contracts, lease agreements, invoices, and any type of document are created within minutes thanks to templates and AI assistance.

AI for Advanced Search

NLP Search for Property Marketplaces

Modern marketplaces use Natural Language Processing for more precise search results. NLP analyses listing descriptions to identify additional key property characteristics that have not been mentioned in the profile. Then, NLP search understands the human flow of thoughts and identifies keywords in the query, applies possible filters automatically, goes through its own database of labels based on analyzed descriptions, and finally returns more precise matches.

For example, Realtor.com uses the DistilBERT NLP machine-learning model and has reported the increased precision of search results by about 40%, so their users are directed to listings that meet all of their requirements with up to 98.5% precision – one of the highest coefficients on the market. Also, Realtor.com has increased user engagement by adding AI search by picture. You use AI Dream Home to generate the home of your dreams and Realtor.com finds a real-life property.

AI Search for Brokerage Efficiency

Another way AI is being used in real estate is effective property search for brokers. The databases are boundless fields of needles where brokers look for the perfect needle for their clients. Ascendix Search can help real estate professionals in both looking for a necessary contact in the huge CRM according to the set of specific criteria and seeking properties by radius and ZIP code with further visualization on the map.

Advanced searches for properties/contacts/availabilities in Ascendix Search

AI for Smart Property Matching

AI recommendation systems use Machine Learning algorithms to analyze your needs, preferences, and budget, then suggest properties that are a perfect match for you. It’s not the same thing as AI property search. Recommendation engines run in the background. Like your social media feed – you don’t search for something in particular, but the algorithm knows what to suggest based on your previous activity.

For example, the Trulia AI property recommendation system is another groundbreaking approach to how to use AI in real estate. Trulia AI relies not only on filters and listing descriptions but also uses computer vision to recognize the property features in the pictures. After a few interactions with your initial search results, the algorithms will recognize the hidden pattern and return more personalized results.

How it works: you’ve engaged with listings that feature French windows, so Trulia AI identifies it as your unconscious preference and suggests other options with French windows. Trulia AI knows what you want even if you don’t.

Trulia AI Recommendation System

AI Adoption Concerns

Artificial Intelligence is not a new concept anymore but still causes major concerns regarding its transparency, security, efficiency, and ethics. At least, governments are trying to regulate those aspects with policies, standards, and recommendations.

There are two solutions to all the issues regarding AI. The first is not to adopt AI at all and give a competitive advantage to other companies. The second is to hire a reliable consultant and service provider who will help you overcome all those challenges and undergo a smooth digital transformation.

Data privacy (57%) and trust and transparency (43%) are top concerns of business owners who are hesitant to adopt AI and only explore its capabilities for now. Ascendix uses 5 different types of security measures to protect your data. For example, Virtual Private Cloud (VPC) technology isolates your data and processing environment from external networks, eliminating the possibility of unauthorized access. With the 256-bit AES method, one of the strongest block ciphers available, your data is unreadable without decryption keys even if the authorized access happened. AscendixTech adheres to FIPS 140-2 compliance standards, a benchmark for encryption security mandated by the U.S. federal government.

A quarter of companies that participated in IBM research have reported data complexity as the main obstacle to AI adoption. Ascendix has strong data engineering expertise, so your data will be not only fully protected but also cleaned, organized, and enriched. This way, your AI model will operate on high-quality data and return high-quality results.

Another challenge for at least one out of five organizations is the lack of employees with the right skills and 16% cannot find new hires to address that gap. Fortunately, Ascendix can help you with change management by training and educating your staff. We regularly create and improve our educational materials to spread awareness about AI.

How to Implement AI in Real Estate?

• Identify your objectives.

Determine what you want to achieve with AI. Is it improving customer service, facilitating property valuations, or more efficient document processing? If there is a challenge, there is a solution. You just don’t know about it yet. Start with a quick consultation regarding AI where our expert will asses your AI-readiness, answer all your questions, and navigate you through the maze of different AI solutions.

• Develop a Data Strategy.

AI thrives on data. Data engineering ensures that your AI model is trained on specific high-quality data after thorough cleansing and enrichment.

• Build AI Solution.

Custom AI solutions are always better than generic ones: they meet your needs, you don’t overpay for unnecessary functionality, no security concerns, perfectly compatible with your existing system, and you can always improve it as you want.

• Train AI Models.

Use historical data and prepared databases to train AI models, ensuring they can make accurate predictions and decisions.

• Integrate AI Solution.

AI integration involves seamlessly connecting the AI system with your existing business processes, data systems, and applications. Think of it like building a bridge between the world of AI and your day-to-day operations.

• Test and Deploy.

Before full-scale deployment, test your AI solutions to ensure they meet your objectives and function as expected.

• Monitor and Optimize.

AI is not a set-it-and-forget-it solution. Continuously monitor its performance and make necessary adjustments to optimize results.

How Ascendix Can Help?

Ascendix team can build and integrate all the above-mentioned AI solutions for real estate, from AI chatbots to AI property recommendation systems. We provide a full-cycle development from initial tech audit to post-integration maintenance and support.

With over 20 years of experience in proptech, we know the industry inside-out and will help you avoid the pitfalls. We’ve already helped industry leaders like JLL, Savills, and Hanna Commercial with digital improvements. Our portfolio of over 300 clients worldwide showcases our diverse expertise and adaptability. Also, with five offices around the world, Ascendix guarantees to meet the peculiarities of both US and European markets.

Contact AscendixTech for a free AI consulting call so that our AI expert can understand your unique needs and goals and then develop a customized AI strategy to help you achieve them.