Ashley Reidy Quinn had a good thing going.
Her client of over a decade had a steady flow of business for her. They maintained anywhere from four to five investment properties in Manhattan at any given time, renting them out for as much as $50,000 a month.
Early last year, something changed.
On what for years had been standard procedure around drawing up leases for these units, Reidy Quinn was now receiving strange change requests or completely rewritten documents that often didn’t abide by New York law.
What’s more, her client famously “doesn’t like to read anything,” Reidy Quinn said. Had they hired a new, argumentative lawyer? Or handed the work off to a precocious summer associate?
The answer was less human.
“I can see the way it’s been copied or written — I know right away that this is a response from ChatGPT,” she said.
Now, the Coldwell Banker Warburg agent is spending hours going back and forth with this client on why a lease that might make sense in Tennessee doesn’t align with the rules set by the Real Estate Board of New York.
“It’s now real estate, plus AI, plus managing a new set of expectations with the client,” she said.
As artificial intelligence has seeped into daily life, people around the world are turning to it for answers on what to make for dinner, where to visit on a trip, whether a relationship is doomed or if the price is too high on a home for sale.
Until recently, when AI got into a deal, it resembled something like an overly involved parent in the dealmaking process, prodding the buyer to underbid or asking bizarre questions about mundane checklist items like inspections and title fees. Agents, for the most part, have managed to fend those off to still, as they say, “always be closing.”
Now, beneath the frustration with their clients’ new, hands-on attitude, a more existential fear is taking root, that artificial intelligence could be the disruptive force that finally encroaches on the agent’s central role in homebuying, in part because the bots are so confident they can.
“A lot of people are trying to write [AI] off because, ‘Oh, it doesn’t work, or it’s hallucinating,” John Walkup, co-founder of real estate analytics firm UrbanDigs, said. “I think we’re still really, really early stages, which makes it both terrifying and exciting at the same time.”
Even if the nuisance never becomes the worst case scenario, the technology already has the competence to increase their workloads, lower their commissions or even kill their deals.
Agents > Tech
Agents are accustomed to doomsday prophesies.
Two decades ago, Steven Levitt and Stephen Dubner, authors of the pop science book “Freakonomics,” began decrying the fate of the industry. The “very profession is about to join the endangered-species list” as a result of the internet, they wrote in the New York Times Magazine.
“It is hard to imagine that the market will allow Realtors to maintain their hefty commissions,” they wrote, pointing to declines in income for travel agents and stock brokers made obsolete by online travel booking and stock trading.
Redfin had arrived in 2004, functioning as a discount brokerage for consumers, with Zillow joining in 2006, becoming the go-to destination for home browsing.
It turned out none of the newcomers moved the needle on commissions, which have hovered between 5 and 6 percent for decades, and both companies pivoted from trying to replace agents to finding ways to work with them (Redfin moved away from its low-fee agent model, while Zillow introduced tools for agents to promote listings or receive leads).
“He and his wife were so excited to send it to me and say, ‘Look, you’re wrong — your comps are wrong.’”
Ten years later, Opendoor became the hot new disruptor on the block with its iBuying model, which promised to make homebuying and selling as easy as browsing for clothes online — no agent required.
Zillow and Redfin, lessons clearly not learned, jumped on the train and spun up their own iBuying efforts, only to shutter them just several years — and billions of dollars — later. Opendoor saw its stock nearly delisted from the Nasdaq, and has only recovered following a meme stock surge last summer and a renewed effort to partner directly with agents.
“There’s this long history in the industry of companies eventually pivoting back to the way the industry works with agents at the center,” said industry analyst Mike DelPrete. “Any disruptor company, they eventually either go out of business or pivot back to the way the industry kind of works.”
Artificial intelligence is the new new thing. Unlike proptech, its reach goes beyond the confines of real estate to threaten the balance of the world’s broader labor market (see page 32).
Companies like Meta and Block have pegged recent mass layoffs, however dubiously, to AI. In an April survey conducted by Ipsos, one quarter of Americans said they used generative AI often, up 40 percent from six months prior.
As of the end of last year, half of Americans who bought or sold a home said they used AI as part of the transaction, according to a survey from 1000watt, a real estate marketing firm. Brian Boero, 1000watt CEO, said those numbers should probably be “bumped up 20 [percentage points]” given the rapid adoption of the technology each month.
That was (not so) easy
Reidy Quinn has a comeback to clients wondering if they can reduce her commission because of all the work they think they’re doing. “Actually, you’re just giving me more work,” she tells them.
Like doctors who have to talk down patients with chatbot-diagnosed illnesses, real estate agents now have to spend extra time talking down their clients — or answering their “15-question email” about minutiae like title and inspection costs, according to eXp Realty’s Jonathan Alfonso.
Alfonso now preemptively prompts ChatGPT to be ready for what a client brings in.
“[Now] I can mentally prepare myself for the 15 questions you’re going to bring up on ChatGPT on the phone, and then you’re still going to send me a ChatGPT email, and then I gotta respond to the ChatGPT, which I’m probably just putting into ChatGPT because I don’t want to have to write the email,” he said. “And now we’re going on this fucking merry-go-round when half the time you’re bringing up a bunch of issues that really, like, are non-issues.”
Beyond the busywork, several agents spoke about needing to guide their clients away from AI-suggested lowball offers or aspirational asking prices.
Compass’ Miltiadis Kastanis, an agent in South Florida, recently worked with a buyer who came across a home asking $13 million that they were ready to make an offer on. Kastanis pushed for a starting bid of $11 million. His client, though, came back with a different comparative analysis, and wanted to come in much lower, at $10 million.
“He and his wife were so excited to send it to me and say, ‘Look, you’re wrong — your comps are wrong,’” Kastanis said.
The devil in his client’s ear was, of course, ChatGPT.
“I can mentally prepare myself for the 15 questions you’re going to bring up on ChatGPT on the phone, and then you’re still going to send me a ChatGPT email, and then I gotta respond to the ChatGPT, which I’m probably just putting into ChatGPT because I don’t want to have to write the email.”
Kastanis asked to review the prompts themselves — his clients had asked ChatGPT to pull closings in the Miami MLS in the same neighborhood with guidelines around characteristics like house size — and saw they were missing three key off-market transactions that hadn’t been entered into the MLS.
Kastanis also called the agents who did those deals to understand the concessions involved in the sale, and asked his client to re-run his analysis through ChatGPT with the additional offline information. “He came back and was like, ‘Okay, yeah, maybe you’re right,’” Kastanis said.
They ended up offering $11 million, well above the $10 million suggested by ChatGPT, and negotiated to a final price of $12 million. “If we just went with the buyer’s AI recommendation, we might not have even gotten a response,” Kastanis said.
Even the city’s premier data wonks have found themselves needing to provide a human touch to clients relying on AI.
Walkup of UrbanDigs recently worked with an unrepresented buyer to help him on his offer for an Upper West Side co-op. The buyer, a “seasoned tech guy,” according to Walkup, had been building his own models and feeding it thousands of data points to come up with a number.
“What the AI saw was, ‘Okay, this unit has four bedrooms, three baths — here’s another one with four bedrooms, three baths that’s only half a mile away, and it sold for $2 million,’” Walkup said. “So, why would you pay any more than $2 million?”
“It reminds me of the early days of GPS, and people were staring at their GPS and driving into lakes,” Walkup said.
Confidence bot
Not every agent has been able to keep buyers and sellers out of the water.
Coldwell Banker Warburg’s William Yau had a listing for a co-op in Forest Hills, Queens for a co-op asking $270,000. The home received several offers, the lowest one coming in as an all-cash offer of $259,000 from a direct buyer, which struck Yau as odd.
When the bidding went to best and highest, the buyer raised her price by just $3,000. Yau asked her how she was valuing the apartment and told her the seller would even be willing to take a slightly lower offer from somebody paying all-cash.
“She goes, ‘Oh, I just typed it into ChatGPT,’” he said. ChatGPT told her that her offer was on the high end. When Yau probed, he realized she hadn’t included information about the amenities in the building or the unit’s washer-dryer hookup.
Still, she wouldn’t budge, quoting stats at Yau about the price of median one-bedrooms in the area. She was also reluctant to provide a standard financial disclosure form, and had a number of unusual requests, like an inspection before there was even a contract signed.
“She just was so reliant on it,” he said. “I think she definitely tried to use it to sound intelligent.”
Brown Harris Stevens’ Cindy Gokay is working with two sellers in the same building looking to list their homes. They had pulled comparables from ChatGPT that suggested an asking price of $3.5 million. But Gokay said those comps included new development transactions, which are inflated by concessions and credits offered by the developers.
Gokay has been pushing for a price closer to $3.2 million, and she says the negotiation is still ongoing.
“If you were to say, ‘Okay, I’m looking to list my apartment at $3.2 [million], it will give you data to support that number,” she said of AI tools like ChatGPT. “It’s up to us to now educate the buyer.”
Somehow, buyers often get told a number that agents deem too low, and sellers a number too high.
In a $50 million deal Ryan Serhant shared on Instagram, both the buyer and seller nearly backed out after ChatGPT advised each that the price was both too high and too low, respectively. (Of course, in a Serhant happy ending, the deal was salvaged at the last minute.)
AI gives such a high degree of confidence to its users that the expected gap between a buyer’s pricing suggestion and a seller’s gets wider than normal, according to Romer Debbas partner Seth Feldman.
“The perception is that it’s so much better than what we just used to have through Google,” he said. “So if [people are] told something contrary to that, then they’re more dubious.”
‘You are never without a ready realtor there to help you’
The industry is still skeptical that AI annoyances deserve anything more than a groan.
The recent semi-viral story of Robert Levine, a homeseller on the outskirts of Miami who reportedly sold his home in March for more than $950,000 using only ChatGPT, is nothing more than selection bias, according to DelPrete, who is arguably one of the industry’s leading technologists.
“That’s For Sale by Owner; we’ve had For Sale by Owner in this country for decades,” he said. “You can use a software product, you can use AI, you can use your uncle, you can hire a lawyer. There’s nothing new there whatsoever.”
FSBO deals as a percent of the market hit an all-time low of 5 percent at the end of last year, down from as much as 20 percent in the 1980s, according to a National Association of Realtors report.
“There’s a reason people still use real estate agents, and it’s deeply psychological, and it has to do with loss aversion and risk, and all of these factors, which haven’t gone away with AI,” DelPrete added.
Reidy Quinn comes to the same conclusion. For all the hand-wringing, “I think they know that they still need me here,” she said of her clients, even if they now feel almost as professional as she is.
Yet at a time when the subreddit r/MyBoyfriendisAI has over 40,000 members alone, it’s more believable than ever that a homebuyer might replace a real estate agent with a bot.
“Millions of people are now having intimate quasi-emotional relationships with these chatbots,” Boero said. “To the extent that AI will be able to replicate or represent the emotional dimension of the real estate conversation, agents are vulnerable.”
For the moment, real-life brokers still have one advantage over the voices in the machine — their ubiquity.
“You are never without a ready realtor there to help you,” Boero said.